Compliance

RiskMetrics helps you to meet the regulatory standards in your jurisdiction

Canada

RiskMetrics is compliant in Canada.

The Canadian financial regulatory system is dispersed amongst the national level, provincial level and several self-regulatory organizations (SRO's).

Suitability and risk profiling is primarily overseen by IIROC, the MFDA, FP Canada and the provincial interpretations of NI 31-103.

IIROC and the MFDA requires firms to demonstrate an understanding of "client's risk willingness, financial ability, time horizon and investment objectives". Also, NI 31-103 requires firm to know which investments are suitable for their client's when making recommendations through the analysis of risk tolerance.

United States

RiskMetrics is compliant in the USA.

Risk assessment and investment suitability is regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC).

FINRA requires that advisors "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer and assess risk tolerance to make recommendations suitable.

FINRA requires advisors to keep accurate records from completed questionnaires and they define risk tolerance as a client's "ability and willingness to lose some or all of the original investment in exchange for greater returns".

United Kingdom

RiskMetrics is compliant in the UK.

The regulatory environment in the UK with regards to investment suitability and risk profiling is overseen by the Financial Conduct Authority (FCA) and MiFID law. The UK has some of the strictest guidelines in the world.

According to the FCA's harmonized Conduct Of Business Sourcebook (COBS) 9.2.1R, firms are required to gather information on their clients' "risk profile". Additionally, Article 25 of MiFID requires that an investor's risk tolerance and ability to bear losses are assessed so that the firm can recommend investments that are suitable.

Australia

RiskMetrics is compliant in Australia.

In Australia, the regulatory environment is controlled by the Australian Securities and Investment Commission (ASIC) and the Financial Service Ombudsman.

Advisors in Australia have a duty to protect the best interest of their clients by "ensuring the financial products they recommend are suitable having regard to each client's objectives, financial situation, and needs. An important part of an FSPs assessment of a client's objectives, financial situation, and needs is the knowledge of the client's tolerance to risk. Financial Service Professionals must educate their clients about risk and reward".

Additionally, ASIC specifies that "the scope of the advice includes all the issues that must be considered for the advice to meet the client's objectives, financial situation and needs which includes the client's tolerance for risk."

Other

RiskMetrics strives to comply with regulators from other jurisdictions including the European Union, New Zealand, Singapore, Hong Kong etc. We are confident that we can help you to meet your compliance obligations.

For more information on a specific country, or jurisdiction, please contact us.

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