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Aditya Birla Sun Life AMC Limited

Aditya Birla Sun Life AMC Limited

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    Aditya Birla Sun Life AMC Limited

    Hari Babu. B Chief Risk Officer

    Functional Heads

    Mr. Hari Babu heads the Risk Management practice at Aditya Birla Sun Life AMC Limited. He has an overall experience of around 23 years.

    Prior to joining ABSLAMC, he has worked with UTI Mutual Fund. He has over two decades of experience in Risk Management, Portfolio Research and Analysis, among others.

    Roles & Responsibilities with respect to Risk Management Roles & Responsibilities with respect to Risk Management

    SN

    Particulars

    1

    Ensure all risk related policies are defined, reviewed, and updated periodically and placed at the relevant risk management committee for approval.

    2

    Responsible for implementation, governance (incl. reputation and conduct risk associated for the respective function) and review of Risk Management Framework (“RMF”) across Asset Management Company (“AMC”) and Mutual Fund Schemes.

    3

    Responsible for overall risk management related activities of the AMC and Mutual Fund Schemes

    4

    Establishing an organization wide risk conscious culture.

    5

    Formulate and implement structured reporting process for risk monitoring at least on a quarterly basis to the board of AMC, trustees and RMCs, covering all risks including risk metrics, escalation of material risk related incidents, timely and corrective actions taken, if any.

    6

    Monitor and ensure adherence and compliance to RMF across AMC and Mutual Fund Operations.

    7

    Review specific responsibility of management, including CEO, CIO, CXOs, and Fund Managers.

    8

    Formulate and recommend changes to roles and responsibilities including KRAs relating to risk management activities and place these at the RMCs for approval.

    9

    Periodically review the Delegation of Power

    10

    Review and suggest changes to the risk appetite and risk metrics for AMC and scheme

    11

    Ensure formulation and implementation of adequate mechanism for – 

    o Generating early warning signals;

    o Conducting stress testing for investment, credit and liquidity risks basis approved parameters;

    o Define the tolerance limits for each of the risk parameters;

    o Measurement and review of AMC and scheme specific risks including RCSA 

    o Assessment and review of credit risk policies

     

    o Assess liquidity risk at a scheme level

    o Alerts pertaining to asset liability mismatch

      

    o Fraud Risk Management Framework

    o Adequate framework to detect and prevent security market violation, frauds and malpractices by the AMC and reporting framework on the same to the ERMC and board Trustee on half yearly basis.

    12

    Review and report the following to the ERMC and Board Risk Committee of AMC and Trustee –

     

    o Risk reports and dashboards capturing deviations to risk thresholds, risk appetite across AMC and Scheme

     

    o Result of stress testing based on defined parameters for investment, credit and liquidity risks, etc.

    o Internal and external fraud incidents reported 

    o Near miss and loss incidents identified and reported by the respective departments

    o Monitor liquidity risk including asset liability mismatch at a scheme and portfolio level vis-à-vis internally approved and defined liquidity model on a monthly basis

    o Major findings and corrective actions prepared by the CXOs

     

    o Monitor delays in implementation of corrective actions by CXOs

    13

    Independently assess reporting of risks to various committees and CEO.

    14

    Formulate a mechanism for reporting to CEO - Including outcomes for risk management function on monthly basis.

    15

    Report outcomes of the risk management function to the management atleast once a month.

    16

    Define process to assess the control against each of the identified risk capturing following elements:

    o Measurement tool for each risk ( RCSA, Stress Testing etc)

    o Monitoring and reporting frequency

     

    o Reporting of breaches

    17

    Identify, assess and estimate emerging risks and their possible impact on AMC and mutual fund schemes

    18

    Report existing and emerging risks associated with the MF and AMC activities to the Risk Management Committee of the AMC and Trustee

    19

    Approve investment limit setup such as minimum number of stocks/securities, cash (net of derivatives), stocks/securities vis-a-vis benchmark and Beta range, regulatory limits

    20

    Perform periodic review and update the RMF defined by the AMC and place the same to the Risk Management Committee (“RMC”) for approval.

    21

    Define specific responsibilities regarding risk management of key personnel reporting to CRO

    22

    Inform to board of AMCs, trustee and risk committees regarding any major findings or corrective actions required and also update on closure or the status of various recommendations.

    23

    Perform adequate due diligence of outsourced vendors prior to onboarding

    24

    Ensure periodic assessment of outsourced vendors considering following elements:

    • o   Review of vendors' people, systems and processes

    • o   Documentation and communication of error tolerance and code of conduct and monitoring breaches

    • o   Monitor fraud vulnerabilities in the outsourced process