IRMT Syllabus

SYLLABUS

1.0  Introduction

This Handbook   has  been prepared  to  provide guidance  to  trainers  and candidates  preparing for the IRMT examinations  in the  Professional Examination   Scheme  leading to  the  Certified Risk Management Technician (CRMT), Certified Risk Management Professional (CRMP) or Certified Financial Services Risk Specialist (CFRS).  The handbook should be read in conjunction with the IRMT Examination and Training guidelines as amended from time to time.

The handbook shows the examination structure and subject relationship as one moves from the technician to the professional level. Details concerning candidacy registration, exemption requests, examination  entry and training requirements are provided to  enable a prospective  candidate  to    easily follow the requirements when applying  for candidacy  registration and/or requesting for exemption.

2.0   About IRMT

IRMT is a professional organization established under the Chapter 212 of laws of Tanzania with mandate to promote the common interest and advance theory and practice of risk management of persons carrying on risk management profession in the United Republic of Tanzania. Ancillary to this, to conduct review classes, forums, seminars, workshops and examinations in the profession of risk management.  In executing such responsibilities, IRMT conducts risk management examinations twice in a year during the month of December and June.

3.0   The Examination Scheme

IRMT administers a three tier examination   scheme in the following categories:

• Risk Management Technician examination scheme
• Risk Management Professional examination scheme
• Financial Services Risk Management Professional examination scheme

3.1 The Risk Management Technician Examination Scheme

Overview

The objectives of this course is to provide understanding of the history, concept and principles of Risk and Risk Management.

The coverage will include Understanding of Risk Management Framework, head map consideration of Risk in specific business operational areas such as procurement, supply chain and professional services. The Risk Management Technician Examination Scheme shall consist of 100 weighted multiple choice questions and written case study question with a total score of 500 points where the pass mark is 375 points. The Examination will usually take three hours.

Entry Requirements:

A person should have at least in possession a Diploma or Degree from any recognized Institute or University with no background in Business studies and Risk management.

The Risk Management Technician examination scheme consists of three levels covering the following modules:

Module I: Meaning, scope and purpose of Risk Management

1. Definition of Risk
2. Impact of Risks on Organization
3. Practical Aspects of risk management (lessons learned)
4. Origins of Risk Management
5. Principles, Standards and Objectives of Risk Management
6. Risk Management Regulatory Framework
7. Enterprise Risk Management

Module II: Risk Management Framework

1. Risk architecture, strategy and protocol
2. Establishing the Context
3. Risk Management Tools
4. Designing and use Risk Register
5. Public Sector Risk Management

Module III: Risk Governance

1. Corporate Governance
2. Corporate governance models
3. Governance evaluation
4. Role of the Board and Current Board Practices
5. The Last Line of Defense
6. Stakeholders expectations

3.2     The Risk Management Professional Examination Scheme

Overview

The risk management professional examination scheme intends to build and nurture necessary competence for Risk Management strategist. It provides knowledge and skills in the use and application of risk management tools and nurture the details of Risk management and internal control framework. It covers the knowledge and skills on utilization of Risk Management techniques for effective decision making and provides competence and proficiency necessary for identifying and solving complex Risk situations such as fraud, project, procurement and other corporation areas in a multi discipline business environment.

The examination scheme intends to cover the meaning, scope and purpose of Risk Management, Risk Management framework, risk governance, risk aware culture, risk assessment, risk response and insurance, operational risk management, risk assurance, risk analytics and future of risk management.

The Risk Management Professional Examination Scheme shall consist of 150 weighted multiple choice questions and two written case studies question with a total score of 500 points where the pass mark is 375 points. The Examination will usually take three hours.

Entry Requirements:

A person should at least meet one of the following entry requirement:

• Certified Risk Management Technician
• Any recognized professional qualification such as CPA ,ACCA, CISA, CFE or other equivalent PROFESSIONAL QUALIFICATIONS OR
• Any university degree but must attend and pass foundation in risk management prerequisite course conducted by IRMT authorized training center
• Any degree in risk management

The Risk Management Professional examination scheme consists of ten modules covering the following areas:

Module I: Meaning, scope and purpose of Risk Management

1. Definition of Risk
2. Impact of Risks on Organization
3. Practical Aspects of risk management (lessons learned)
4. Origins of Risk Management
5. Principles, Standards and Objectives of Risk Management
6. Risk Management Regulatory Framework
7. Enterprise Risk Management

Module II: Risk Management Framework

1. Risk architecture, strategy and protocol
2. Establishing the Context
3. Risk Management Tools
4. Designing and use Risk Register
5. Public Sector Risk Management

Module III: Risk Governance

1. Corporate Governance
2. Corporate governance models
3. Governance evaluation
4. Role of the Board and Current Board Practices
5. The Last Line of Defense
6. Stakeholders expectations

Module IV: Risk Aware Culture

1. Meaning of risk culture
2. Risk culture and risk strategy
3. Risk maturity models
4. Risk training and risk culture
5. Risk Management Information System
6. Risk information and communication
7. Risk Response

Module V: Risk Assessment

1. Importance of risk assessment
2. Approaches to risk assessment
3. Risk Classification systems
4. Risk likelihood and impact
5. Loss control
6. Defining the upside of risk
7. Business continuity

Module VI: Risk Response and Insurance

1. Enterprise Risk Management
2. Importance of risk appetite
3. Tolerate, treat, transfer and terminate
4. Risk Control techniques
5. Control of selected hazard risks
6. Insurance and risk transfer

Module VII: Operational Risk Management

1. Operational Risk – Definition and Scope
2. Basel II
3. Measurement of operational risks
4. Developments in operational risks
5. Project Risk Management
6. Supply Chain Risk Management
7. Fraud Risk Management
8. Ensuring compliance

Module VIII: Risk Assurance

1. Evaluation of the control environment
2. Risk assurance techniques
3. Role of internal audit function in risk management
4. Reputation and the business model

Module IX: Basic Risk Analytics (Financial Services Risk)

1. Risk Control Analytics
2. Risk Optimization Analytics
3. Approaches to Risk Measurement
4. Fundamentals of Time Series Analysis
5. Extreme Value Theory and Multivariate Models
6. Market Risks, Credit Risk and Portfolio Credit Risk Management
7. Operational Risk and Insurance Analytics
8. GRC Systems

Module X: The Future of Risk Management

1. Risk Management checklist
2. Information Technology Risk Management
3. The future of risk management
4. Risk Management automation
5. Financial Institutions Risk Management
6. Energy Firms Risk Management
7. Risk Based Decision Making
8. Risk Management Competency framework

 

3.3     Financial Services Risk Management Professional Examination Scheme

Overview

The financial services risk management professional examination scheme intends to build and nurture necessary competence for Risk Management strategist in the banking, insurance and financial sector. It provides knowledge and skills in the use and application of financial risk management tools and nurture the details of financial Risk management and internal control framework. It covers the knowledge and skills on utilization of Risk Management techniques for effective decision making and provides competence and proficiency necessary for identifying and solving complex financial Risk situations.

The examination scheme intends to cover the meaning, scope and purpose of Risk Management, Risk Management framework, risk governance, risk aware culture, risk assessment, risk response and insurance, operational risk management, risk assurance and future of risk management as generic component and narrows down to risk analytics with financial risk management as a key component.

The Risk Management Professional Examination Scheme shall consist of 150 weighted multiple choice questions and two written case studies question on financial services risk management with a total score of 500 points where the pass mark is 375 points. The Examination will usually take three hours.

Entry Requirements

A person should at least meet one of the following entry requirement:

• Certified Risk Management Technician
• Any recognized professional qualification such as CPA ,ACCA, CISA, CFE or other equivalent PROFESSIONAL QUALIFICATIONS OR
• Any university degree but must attend and pass foundation in risk management prerequisite course conducted by IRMT authorized training center
• Any degree in risk management

The Financial Services Risk Management examination scheme consists of the ten modules under Certified Risk Management Professional above and focus on the following module.

Module I: Foundation in Risk Management

1. Meaning, scope and purpose of risk management
2. Risk Management framework
3. Risk Governance
4. Risk Aware Culture

Module II: Introduction to Financial Risk Management

1. Introduction to Risk and Return
2. The efficiency frontier and Capital Asset Pricing Model
3. Arbitrage Pricing Theory
4. Risk Management for financial institutions
5. Credit Rating

Module II: Risk Management is Banks

1. Commercial Banking and capital Requirements
2. Deposit insurance
3. Investment banking and security trading
4. The risks facing banks

Module III: Risk Management in Insurance Companies and Pension Plans

1. Life Insurance
2. Annuity Contracts
3. Mortality Tables
4. Longevity and Mortality Risk
5. Property Casuality Insurance
6. Health Insurance
7. Moral Hazard and Adverse selection
8. The Risk facing Insurance Companies and Pension Plans

Module IV: Trading in Financial Markets

1. The markets
2. Long and short positions in Assets
3. Derivative Markets
4. Plain Vanilla Derivatives
5. Exotic Options and Structured Products
6. Risk Management challenges in Financial Markets
7. Mutual Funds and Hedge Funds

Module V: Interest Rate Risks, Value at Risk and Volatility

1. Management of net interest income
2. LIBOR and Swap Rates
3. Duration and Convexity
4. Interest Rate Deltas in Practice
5. Definition of VaR and Calculation
6. VaR and Capital
7. Coherent Risk Measures
8. Marginal VaR, Incremental VaR and Component VaR
9. Implied volatilities
10. Power Law
11. Exponentially Weighted Moving Average and Volatility Modeling

Module VI: Basel I, Basel II, Basel 2.5, Basel III, Solvent II and Dodd-Frank

1. Bank Regulations
2. Basel II, 2.5 and III
3. Credit Risk and Operational Risk
4. Solvency II
5. Dodd-Frank Act
6. Banking Legislation in other countries

Module VII: Market Risk

1. Historical simulation approach
2. Extreme Value theory
3. Correlation and Covariance Matrices
4. Linear Model and option
5. Monte Carlo simulation
6. Model Building vs. Historical Simulation

Module VIII: Credit Risk and Estimating Default Probabilities

1. Credit Ratings and Historical default probabilities
2. Recovery Rates and credit default swaps
3. Credit spreads
4. Comparison of Default probabilities estimates
5. Using equity prices to estimate default probabilities
6. Credit Risk in Derivatives
7. Credit Value at risk
8. Lesson learned from credit crisis 2007-2012

Module IX: Operational Risk in Financial Services

1. Operational Risk and determination of regulatory capital
2. Loss Severity and loss frequency
3. Proactive approaches
4. Insurance
5. Sarbanes Oxley

Module X: Liquidity Risk and model risk

1. Liquidity Trading Risk, funding risk and liquidity black holes
2. Model Risk and marking to market
3. Hedging and dangers of building the model
4. Detecting model problems
5. Managing trading room and risk limits