Risk & Compliance
Risk & Compliance Group is responsible for identifying all aspects of risks to which the Fund is exposed to. The list includes Market Risk, Operational Risk, Credit Risk, Reputational Risk, etc. In addition, the group is responsible for implementing VaR based risk budgeting framework, portfolio analytics and performance reporting. The group is also responsible for implementing ethics and compliance policies relevant to the Fund.
Major responsibilities include:
- Provide strategic direction for Risk Management
- Avoidance of over exposure to single issues, geographies and sectors.
- Risk Budgeting
- Performance Reporting
The Compliance Section of the Investment Management Division (IMD) has a fiduciary responsibility to help protect the interests of the participants and beneficiaries in the UNJSPF and thereby improve their financial security.
This is done by ensuring that there are adequate compliance policies and procedures in place to prevent misconduct in its investment management functions.
The essential elements of IMD’s compliance program include:
- Quarterly compliance meetings with the Representative of the Secretary General for Investments of the UNJSPF (the RSG) including a “dotted line” reporting relationship to the RSG.
- Automated compliance programs that help ensure comprehensive, documented observance of IMD investment rules and staff policies.
- Sustained interaction and reviews with the UN Office of Internal Oversight Services, the UN Board of Auditors, and the UNJSPF Audit Committee.
- Coordination with the UNSJPF Secretariat on its Enterprise-wide Risk Management Working Group.
All of the above are intended to confirm that IMD is carrying out its duties prudently and is acting solely in the interests of the plan participants and beneficiaries
Within this framework, it is important that IMD have a program that includes policies, practice and training to ensure that the IMD Staff understand and comply ethical and compliance programmes.
Since 2010 IMD Compliance has instituted several key policies that confirm IMD’s commitment to the highest standards of ethics, good governance, competence and integrity:
- The Personal Securities policy provides guidance for personal investment activity that might have the potential to create actual or apparent conflicts of interest between IMD Staff and the investment management of the Fund.
- The Gift and Hospitality Policy speaks to avoiding situations where personal interests could conflict with, or appear to conflict with, the interests of IMD or the Fund. In view of the higher standard required for officials carrying out functions in sensitive areas, IMD has adopted a zero tolerance rule for the receipt of gifts from any entity having or seeking to have a business relationship with IMD.
- The Mandatory Leave Policy requires that IMD Staff with fiduciary duties take an annual leave which is at least ten (10) consecutive work days in duration. The reason for this control is that certain types of fraud can sometimes come to light when the person responsible is not around to conceal it.
- The Communication Practices and Document Retention Policy addresses proper communication practices including social networking and the retention of official documentation so as to ensure the security and integrity of the Fund.
Going forward, IMD Compliance will continue to develop and apply strong systems of controls so as to look after the best interests of the UNJSPF together with the United Nations and the 23 Agencies, Funds and Programmes that share in the UNJSPF.