Risk Management - How does Vectis help ?

Do you or your client need assistance with risk management? Vectis provides policy, procedure and related services.

Funds (UCITS, AIF, SIF, SICAR) or Investment PFS: in matter of risk management, Vectis leverages your own services or directly assists your client. According the needs, we assist in

  1. Providing template documents of risk management policy, procedures and reporting
  2. Supporting their setup given the context of your client (governance, organization, business, laws, circulars)
  3. Advising in execution of risk management process

How does it work ?

During our 10 years of experience in the financial sector, Vectis helped a large number of companies. We mutualize our experience in a simply and efficient way by delivering a tailored risk management service in accordance with business needs and compliance with the applicable Law and CSSF Circulars. As an example, we offer below the table of content that we use as framework.

  • I – Risk Management Policy – Table of Contents
  1. Introduction
  2. Scope
  3. Policy Statement
  4. Laws and Regulations
  5. Governance & Organisation
  6. Internal Operations
  7. Processes, Procedures & Controls
  8. Risk Definitions and Risk Acceptance
    • Risk Scales and Risk Map
    • Risk Acceptance and Escalation principles
  9. Market Risk
  10. Credit Risk
  11. Counterparty Risk
  12. Liquidity Risk
  13. Operational Risk
  14. Communication
  15. Risk Reporting

We customize it by bringing our knowledge and know-how regarding the applicable law :

  • II Luxembourg Financial Sector : Applicable Laws and Regulations re. Risk Management

SIF – Specialised Investment Funds

The risk management requirements applicable to SIFs are outlined in the SIF Law of 13 February 2007. The SIF law was amended by the AIFM Law of 12 July 2013 on alternative investment fund managers. As a result, the SIF Law is now divided into two parts:

  1. general provisions applicable to all SIFs, and
  2. specific provisions applicable to SIFs which qualify as AIFs.

CSSF Regulation No 12-01 laying down detailed rules for the application of Article 42a of the SIF law relating to specialised investment funds concerning the requirements regarding risk management and conflicts of interest. SIFs are subject to the principle of risk-spreading.

Risk diversification requirements are defined by CSSF Circular n° 07/309.SICAR – Risk Capital Investment CompanyLaw of 15 June 2004 (SICAR Law) regarding investment companies in risk capital. SICARs that are managed by an AIFM or internally managed AIF subject to the AIFM Law are subject to AIFM risk management requirements.

Type Laws & Regulations Reglementation
PFS Investment companies Law of 5 April 1993 on the Financial Sector CSSF Circular 12/552
UCITS – management company or self-managed investment company “The fundamental risk management requirements are laid down in Law of 17 December 2010 on UCIs, the 2010 Law. CSSF Regulation 10-4 lays down more detailed requirements CSSF Circular 11/512 details the risk management requirements applicable to Luxembourg UCITS management companies and UCITS (including self-managed UCITS)
AIF – Alternative Investment Funds European Alternative Investment Fund Manager Directive (AIFMD) 2011/61/EU, adapted into Luxembourg law of 12 July 2013. CSSF Circular 11/512 details the risk management requirements applicable to Luxembourg UCITS management companies and UCITS (including self-managed UCITS)

Additional services in the field of risk management:

  • AML/TF risk : setup and partial execution of the fight against money laundering and financing of terrorism (policy, risk analysis, documents, softwares, trainings)
  • Operational risk : Definition and test of business continuity plans (BCP) and disaster recovery plan (DRP)
  • IT risk : organization, costs, service level agreements, security, data backup
  • Risk monitoring software and reporting tools : assistance for setup, implementation and project management

Why Vectis?

Since 10 years, Vectis is an advisory firm specialized in internal governance. Our activities include creation, management, company organization and internal audit – they are especially tailored for SMEs. Vectis was raised in 2005 and employs 12 people. Our staff is member of professional organizations such as ILA (Institut Luxembourgeois des Administrateurs), ALCO (Association des Compliance Officer) IIA (Internal Auditor Association), ALRiM (Luxembourg Association for Risk Management), APSF/S (Association des Professionnels du Secteur Financier de support)… Vectis focuses on the financial sector in Luxembourg and helps many companies on a regular basis through its services of governance, risk analysis, added-value compliance, internal audit and trainings.