Section A - Creating and Managing a Hedge Fund Business » 1. Management and Controls » 3. Outsourcing

Provider: PWG

Practice:	Guidance:
Senior management should not outsource risk monitoring or management, and must maintain responsibility for the overall risk framework. [See also Section B2 (1)]	If a determination is made to use the services of an external provider only for risk measurement, outsourcing should not be a substitute for an adequate understanding of risk by senior management personnel. Responsibility for any outsourced parts of the process should continue to lie with the senior management or its designees, such as the Chief Risk Officer or designated Risk Committee.

Practice:

Guidance:

Senior management should not outsource risk monitoring or management, and must maintain responsibility for the overall risk framework.
[See also Section B2 (1)]

If a determination is made to use the services of an external provider only for risk measurement, outsourcing should not be a substitute for an adequate understanding of risk by senior management personnel.

Responsibility for any outsourced parts of the process should continue to lie with the senior management or its designees, such as the Chief Risk Officer or designated Risk Committee.