The Operational Risk paper provides an ideal introduction to the world of operational risk and ensures that candidates have an understanding of operational risk as it relates to the needs of operations and administration staff.

Intended for

This examination is appropriate for staff who have been working in the industry for a period of up to 18 months.

In addition, the SCA Licensing Regime requires the following Job Functions to pass this qualification or the Risk in Financial Services paper:

  • Trading Manager
  • Operations Manager
  • Internal Controller
  • Financial Analyst

Exam Structure

  • Operational Risk is an hour exam with 50 multiple choice questions.
  • The pass mark for the examination is 70%

Course Content

  • Element 1 - Risk Basics

    • Risk in the Financial Services Industry
  • Element 2 - Other Major Risks

    • The Nature of Credit Risk
    • Measuring Credit Risk
    • Credit Risk Management and Reporting
    • The Nature of Market Risk
    • Measuring Market Risk
    • Value-at-Risk (VaR)
    • Market Risk Management and Reporting
    • Market Risk Regulatory Requirements
    • The Nature of Liquidity Risk
    • Measuring Liquidity Risk
    • Liquidity Risk Management and Reporting
    • Liquidity Risk Regulatory Requirements
  • Element 3 - The Nature of Operational Risk

    • Definition of Operational Risk and Operational Risk Categories
    • Culture
    • The Risk Management Process
    • The Policy for Managing Operational Risk
    • Risk Identification / Classification
    • Risk Assessment and Measurement
    • Risk Mitigation
    • Risk Monitoring, Reporting and Governance
  • Element 4 - The Causes, Consequence and Impact of Operational Risk Events

    • Operational Risk – The Causes
    • Operational Risk – The Consequences
    • Operational Risk – The Impact
    • Near Miss Identification and Reporting
  • Element 5 - Operational Risks Arising in the Trade Cycle

    • Set-up
    • Execution
    • Pre-settlement phase
    • Settlement phase
    • Post-settlement phase
  • Element 6 - The Support and Control Functions

    • The Compliance Function
    • The Financial Reporting Function
    • The HR Function
    • The Internal Audit Function
    • The IT Function
    • The Legal Function
    • The Marketing Function
    • The Project Management and Change Management Function
  • Element 7 - Enterprise Risk Management (ERM)

    • The Nature of Enterprise Risk Management (ERM)
  • Element 8 - Operational Risk in the Regulatory Environment

    • Achieving Common Standards and Protection
    • Regulatory Capital Requirements
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