Risk Management Framework
Also written RMF · Risk Management Framework (RMF)
SEBI’s framework under which risk management is an independent and specialised function within every AMC, requiring dedicated risk officers for investment risk, compliance risk, operational risk and cyber security.
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
- Asset Management CompanyThe company that runs a mutual fund's schemes day to day — appointed by the sponsor or trustees with SEBI's approval, and paid a fee out of the scheme rather than a share of its profits.
- Compliance OfficerThe separately appointed officer of a merchant banker, listed company or intermediary who monitors compliance with securities law, handles investor grievances, and reports non-compliance to SEBI independently.
- CustodianThe SEBI-registered entity that holds a fund's securities in accounts of its own and settles its trades, so the assets sit somewhere other than with the manager who decides what to buy.
- DepositoryAn institution that holds investors' securities in electronic form and provides the services needed to transact in them — the securities equivalent of a bank holding money rather than cash.
- Depository participantThe SEBI-registered agent through whom an investor reaches a depository — NSDL and CDSL cannot open investor accounts themselves, so every demat account is opened and operated through a DP.
- Execution only platformA SEBI-recognised digital platform that carries out subscription, redemption and switch transactions in direct plans of mutual fund schemes only — registered with AMFI (Category 1) or as a stock broker (Category 2).
Where this is taught
Free preparation for NISM Series V-D← All terms