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Risk and Control Environment
Phoenix has constructed a risk management and control environment that has three key elements:
A Risk Matrix that defines the risks facing the business and the controls in place to mitigate the consequences of those risks.
Phoenix has adopted a risk based approach to its operations. All risks are owned collectively by the Directors of PASL who use the Risk Matrix to:
- identify and detail the key risks to the firm;
- consider the adequacy and effectiveness of its risk management policies and procedures; and
- consider the steps necessary to resolve any deficiencies identified in the policies and procedures.
The Board of Directors of PASL review its strategy at least annually. Stuart Mathieson is the nominated Risk Manager. The four categories of risk that are considered are:
- Strategic;
- Financial;
- Operational; and
- Regulatory.
A reporting structure that ensures that the Directors of Phoenix consider business risk on a regular basis
A reporting structure has been put in place around the Risk Matrix that has operational heads of department providing the Group Compliance Director with quarterly risk matrix reports on their business area. These reports identify, prioritise and categorise any potential risks facing their business area. This is supplemented with each operational head of department reporting individual incidents to the Group Compliance Director.
The Group Compliance Director reports directly to the Board of Directors of PASL, providing a monthly report that is tabled at the monthly Board Meetings.
A compliance and risk monitoring programme
Compliance for UK regulated activity- PFS UK
The regulated service for supporting UK domiciled funds was launched in 2008 and a review of PFS UK’s policies and procedures was carried out by FM Consult, a specialist compliance firm, in January 2010.
PFS UK has a compliance and regulatory regime that is based upon the following:
- Phoenix’s Group Compliance Director is Robert Elliott, who reports every month to the Board of the holding company, PASL.
- FM Consult tests the regular monitoring programme undertaken by PASL and its subsidiaries and reports to the Group Compliance Director.
PFS UK carries out all of its regulatory duties in line with the FSA guidelines and as specified in the ACD agreement with its clients. Specifically, this means that it is responsible for ensuring that a fund for which it is the ACD is operating within the confines of the prospectus and the Collective Investment Schemes (COLL) Sourcebook rules. It ensures that it has adequate risk management processes in place to monitor and measure the fund's investment positions and their contribution to the overall risk profile of the fund. These processes measure the fund against the prospectus and the investment restrictions set out therein and consider whether the fund is operating in accordance with the prospectus.
