This unit apply to financial markets job roles including managers, specialists and personnel with risk management responsibilities.

ELEMENT

PERFORMANCE CRITERIA

1. Analyse financial market operation risk profiles

1.1. Types and characteristics of financial markets risks are determined

1.2. The organisation's exposure to identified financial markets risks is assessed using existing measures and relevant risk measurement techniques and tools

1.3. Identified risks are ranked against likelihood and organisational impact

2. Identify a risk mitigation strategy for risks

2.1. Risk mitigation options for each risk and treatments for risk mitigation are considered

2.2. Implementation time for each treatment and the costs and benefits arising from the treatment options are quantified and appropriate treatments selected

2.3. Treatment priorities and the adequacy of existing controls are reviewed and the need for additional or alternative controls established

3. Develop risk mitigation recommendations

3.1. Personnel and resources necessary to carry out actions undertaken are formulated

3.2. Viable recommendations are provided to management for each stage of treating organisational risks

3.3. Key indicators of progress and success are determined

3.4. A monitoring system for the effectiveness of risk treatments is developed

Required skills

well-developed communication skills to:

determine and confirm organisation risk management requirements, using questioning and active listening as required

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

well-developed research and analysis for accessing, interpreting and managing complex information

highly developed risk assessment and management skills

well-developed literacy skills for:

analysingrisk mitigation information to ensure appropriateness to the organisation

drafting risk mitigation reports

problem solving skills to identify any issues that have the potential to impact on risk mitigation strategies and to develop options to resolve these issues when they arise

planning and organisational skills

Required knowledge

Australian Standard 4360 Risk Management

financial markets products and services

methods of comparing suitability of risk treatment options for particular applications

relevant financial services legislative and industry code or practice requirements

risk analysis techniques and tools

the range of possible financial risk treatment options

types and characteristics of financial markets risk

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

effectively apply risk management principles and practices

analyse risks and determine appropriate mitigation strategies

develop sound recommendations on risk mitigation.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables

access to financial services organisational data

access to Australian Standard 4360 Risk Management.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills

setting and reviewing scenarios

evaluating samples of work

accessing and validating third party reports.

Guidance information for assessment

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Financial markets risks may include:

compliance risk

client credit risk

fraudulent activity risk

legal risk

liquidity risk

market risk

operational or security risk

reputation risk

settlement agency or bank risk

systemic risk

technology inadequacy or failure risk.

Existing measuresand relevant risk measurement techniques and tools may include:

audits and internal surveys

credit analysis

documentation and data security

default procedures

legal obligations review

personnel checking procedures

risk rating and updating processes

settlement procedures

technology review

transaction entry and capture processes.

Risk mitigation options are specific tools including:

diagnostic tools used to identify and measure risks

monitoring tools used to monitor risks

preventative tools used to mitigate risks

remedial tools used to address crystallised risks.

Treatments are specific solutions within risk mitigation options and may include:

administrative or policy change

education and training or personnel

hedging

improved security

insurance of risk

involvement of external agencies

reduction of risk by greater control.

Costs and benefits may include:

financial benefits and costs

non-financial benefits and costs.

Unit sector

Financial markets

This unit contains employability skills.