New York, January 26, 2005 - The Global Association of Risk Professional's FRM® Committee has adopted the first material change to the FRM curriculum since the FRM Program's inception in 1997. As part of its ongoing commitment to keep the FRM Program current and respond to a changing marketplace, it is adding a section to the exam entitled "Risk Management In Investment Management".
The new section, which will represent ten percent of the exam, will include risk management theories and concepts as they relate to “traditional” risk management for mutual funds and pension plans. This section will cover concepts such as benchmarking, risk budgeting, tracking error and return metrics.
Hedge fund risk management is also becoming increasingly important. The Committee has recognized that fact by including readings related to risk-return metrics specific to hedge funds, asset illiquidity, valuation and risk measurement, the use of leverage and derivatives, measuring exposures and addressing correlations among and between hedge funds and other assets.
“Assets under management in hedge funds are growing dramatically. Hedge funds now manage funds in excess of $1 trillion. Risk managers are playing an increasingly important role in hedge funds and they are encountering issues that are more complex and challenging than ever before,” said Dr. René Stulz, Chairman of the FRM Committee. “The FRM curriculum now helps to ensure that individuals involved in risk management in traditional asset management as well as hedge funds master the key issues they face in their positions.”
“This change to the FRM Program has been the subject of study by the FRM Committee for a number of months”, said Richard Apostolik, GARP’s President. “The work that went into this new section is a model that can be held up to risk professionals around the world as an example of GARP’s commitment to ensuring that its benchmark FRM program remains timely and at the forefront of anticipating and addressing issues that are important to the financial risk management profession.”
GARP’s FRM program has grown dramatically since 1997. In 2004 over 5,700 individuals from over 2,000 organizations around the world registered to take the FRM exam, an increase of 31% over 2003. This growth reaffirmed the FRM certification’s benchmark status for a professional financial risk manager. Over 185 companies had 5 or more employees registered for the 2004 FRM exam, a 76% increase over 2003.