media release (15-020MR)

ASIC enquires into risk management by responsible entities


ASIC is making enquiries of a number of responsible entities of registered managed investment schemes regarding their risk management practices.

The enquiries are a proactive response to the increased market volatility in global and domestic markets aims to examine the adequacy of risk management and disclosure practices in the current environment. Effective management of these issues leads to less risk being borne by investors.

‘All responsible entities must have a sound and tested risk management strategy in place.’ ASIC Commissioner Greg Tanzer said.

‘Failing to manage such risks can have serious implications, including adversely affecting the liquidity of funds.’

ASIC is currently undertaking enquiries with a range of responsible entities of registered managed investment schemes, focussing particularly on fixed income funds, exchange-traded funds and other funds that may experience liquidity issues during periods of market volatility. Responsible entities will be reminded of their obligations and asked to provide ASIC with information regarding the adequacy of the arrangements addressing risk.

‘ASIC wants to ensure the responsible entities are adequately positioned to manage these risks. We do not currently have specific concerns about the entities involved but will use this process to raise any red flags and address them as appropriate,’ Mr Tanzer said.


All Australian financial services licensees are required to have adequate risk management systems. In 2013 ASIC published Consultation Paper 204 Risk management systems of responsible entities (CP 204), which proposed guidance-based on the current practices of responsible entities. ASIC’s final policy position is under consideration. However, responsible entities should continue to ensure that adequate risk management systems are in place to comply with their obligations.

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