Prmia-PRM-Guidebook 2019 PDF

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Guide for the change in exam format...

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PROFESSIONAL

RISK MANAGER (PRM ) DESIGNATION TM

The Industry Standard for Professional Risk Practitioners

CANDIDATE GUIDEBOOK

PRM Candidate Guidebook — revised February 2019 © 2015-2019 Professional Risk Managers’ International Association (PRMIA). All rights reserved.

Contents How to Use this Candidate Guidebook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PRMIA Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 About the Professional Risk Manager (PRM™) Designation Program . . . 3 Program Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The 2019 PRM Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2019 Transition Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PRM Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Enrollment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Studying for the PRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Examination Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Experience Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Examination Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Exam Exemptions: Cross-over Qualifications . . . . . . . . . . . . . . . . . 10 Exam Exemptions: PRMIA Risk Accreditation Program Accredited University Programs . . . . . . . . . . . . . . . . . . . . . . . . . 12 Recertification Requirements: Maintaining Your PRM Designation . 12 PRM Syllabus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 PRM Exam Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2019 PRM Exam Test Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2019 PRM Exams — Test Length and Testing Time . . . . . . . . . . . . . . . 16 Exam Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Calculators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Exam Language . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 The Path to Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Is This the Right Certification for You? . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Refund Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Profile Details for PRMIA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Program Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Profile Details for Pearson VUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

The Path to Certification continued Preparing for the Exams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Professional Risk Managers’ Handbook . . . . . . . . . . . . . . . . . . . . . . 22 Digital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Online Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Risk Management in Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 PRMIA Chapter Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 PRM Self-Study Guide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Optional Supplemental Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Scheduling Exams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Canceling or Rescheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Checking in for Your Exam Appointment . . . . . . . . . . . . . . . . . . . . . . . 25 Exam Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Taking the Exams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Exam Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Retaking the Exams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Achieving “Holder” Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Maintaining PRM Designation Holder Status . . . . . . . . . . . . . . . . . . . .28 Recertification Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 PRM Self-Study Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Overview of This Self-Study Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Online Study Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Study Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Overview of the Exam Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Preparation Strategies and Study Time . . . . . . . . . . . . . . . . . . . . . . . . . . 32 PRM Designation Skills Self-Assessment Tool . . . . . . . . . . . . . . . . . . . . 32 Reading List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Study Plan Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 How to Read the PRM Syllabus Learning Objectives . . . . . . . . . . . . . .36 PRMIA Certification and Examination Policies and Procedures . . . . . . .38 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 PRM Syllabus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

How to Use this Candidate Guidebook

T

he purpose of this Professional Risk Manager (PRM™) Designation Candidate

Guidebook is to ensure future and current candidates have the information needed to pursue the PRM professional certification.

Future candidates (those individuals who have not yet applied for certification) may find important and detailed information regarding the PRM Designation to determine whether it is appropriate for their career path.

Be sure to read this entire document. It contains important information that will help you be a successful candidate. We hope you will join us in promoting the PRM program as the standard for the risk management industry. Invite

Current candidates (those who

your peers to learn more about the

have applied for and are taking the examinations) should refer to this Candidate Guidebook to aid their path to the PRM Designation.

PRM by sharing the link http://bit. ly/PRMIA_PRM in your social media profiles. Join the PRM Candidate Online Community and share your experiences with others on this certification path.

Current PRM Designation Holders should use this Candidate Guidebook to aid their maintenance of the PRM Designation.

Many of your questions can be answered by this PRM Candidate Guidebook. However, as a quick reference, some of the more commonly asked questions from exam candidates can be found on the online FAQs page.

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PRMIA CONTACT INFORMATION Inquiries related to PRMIA Membership or the PRM Designation program may be submitted using the options below.

Inquiry Category

Online Contact Us Form

Category Email

Membership and renewal

General Questions

[email protected]

General questions about certification

General Questions

[email protected]

Specific questions about the PRM Designation program

PRM Certification Question

[email protected]

Specific questions about a PRMIA certificate program (Associate PRM, ORM, CCRM, MLARM)

PRM Certification Question

[email protected]

PRM Publications Support

[email protected]

Exam results

Exam Result Inquiries

[email protected]

Fees and refunds

Billing Question

[email protected]

PRMIA courses and training, including member webinars

Training Inquiries

[email protected]

Continued Risk Learning (recertification)

PRM Certification Question

[email protected]

PRM publications support (Handbooks, Standards, Case Studies, etc.)

Inquiries related to the certification process or requests for appeals of results may be submitted by completing the Contact Us form titled Exam Result Inquiries. Accommodation requests: Examinees who require specific test environment accommodations may contact [email protected] with details of the specific accommodations required for testing. Report a potential violation of the PRMIA Standards of Best Practice, Conduct, and Ethics via the PRMIA website. Do not hesitate to contact [email protected] or call +1-612-605-5370 or +44 020 7096 0827 for answers to any other questions.

© 2019 Professional Risk Managers’ International Association (PRMIA). All rights reserved. Revised 2015, 2016, 2017, 2018, 2019

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About the Professional Risk Manager (PRM™) Designation Program

T

he Professional Risk Manager (PRM) Designation is a globally

Today’s risk

recognized, graduate-level risk management credential.

professionals are expected to know and

The PRMIA PRM Designation

Built by a broad coalition of

is a series of evaluation exams,

industry leaders to reflect

designed for the development

the mission objectives of the

of professional risk managers

association and to establish

and awarded to individuals with

the leading form of education,

them. There is no better

proven knowledge and skills in

validation, and certification in

way for risk managers to

financial risk management.

the risk management profession,

show their commitment

the PRM includes candidates

than by proving they

and current holders from over

have the knowledge,

100 countries.

skills, and qualifications

Endorsed by leading university programs and industry firms, it is the global standard for risk management professionals.

understand industry best practices and be committed to using

to back their experience.

As of January 2019:

3,380 PRM Designation

Holders in

105 Countries 3

Who holds the PRM? PRM holders have

Holders of the Professional Risk Manager Designation have demonstrated their knowledge and skills related to:

shown their competence in risk management

n

risk management

tools, techniques, theories, and principles.

Risk management best practices and the finance theory underpinning

n

Financial instruments and their associated risks and uses

n

The roles, features, and processes within the various financial

It is intended for Financial Analysts,

markets

Risk Managers, Chief Risk Officers, and Chief Executive Officers. Current PRM certified professionals include

n

Mathematical foundations of risk measurement

n

Risk management frameworks and operational risk best practices

n

The classic credit risk lifecycle, products, and methodologies

n

Counterparty risk management (CVA, DVA, XVA) elements

n

The foundations of market risk

n

The foundations and complexities of asset liability management

n

The foundations of liquidity risk

n

Lessons learned from failed systems and practices and major risk

staff from large banks and corporations, universities, government agencies, and other nonfinancial organizations. Organizations

events

represented include Ernst & Young (EY), Credit Suisse, HSBC, ING, First Derivatives, Deloitte, KPMG, UBS, and National Bank of Canada. Access PRMIA Certifications Public Directory for a full list of PRM Designation holders certified since 2015 and visit the Certification Dashboard for a list by year.

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n

Best practices of governance, conduct, and ethics

Program Design

T

he Professional Risk Manager Designation program was developed under the

guidance of the PRMIA Education Committee and with input from current

and future Professional Risk Managers around the globe. Its subject matter is based on relevant, readily available sources of literature on the specific subjects within its syllabus, and has been validated in a 2017-18 job analysis study. Specifically, the program has been designed with four of the

PRMIA Mission objectives in mind:

1

To be a leader of industry opinion and a proponent for the risk management profession By setting the higher standard in risk certification, we create standards of practice and accountability that will define what Professional Risk Managers represent to their colleagues and employers.

2

To drive the integration of practice and theory, and certify the credentials of those in our profession Neither theory nor practice will successfully develop to their potential without a strong interaction among professionals in each area. The Professional Risk Manager program contains subject matter drawn from risk management theory, finance theory, the math underpinning risk measurement, and applied practices of our profession. We directly assess knowledge of finance and basic math. Such knowledge is essential for risk managers, as it forms the foundation of risk measurement and management. We assess practical knowledge about markets: trading practices, intermediaries, settlement, and other conventions in specific markets. These market choices will reflect the most global of markets as well as some more narrowly defined markets, with the latter giving us the opportunity to expose people to markets in which they may not normally be active. Finally, we assess broad understanding of important risk management lessons. We have included a section based on the time-tested case study approach to learning. Narratives of historical incidents where critical risk management issues have arisen give us the opportunity to conduct a pathology of events from around the globe and to assess members’ understanding of the cases’ root causes.

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3

To be global in our focus, promoting crosscultural ethical standards, serving emerging as well as more developed markets The content of the PRM program is designed to be geographically neutral. Specific sections focusing on “markets” are designed so that a variety of markets and market lessons are studied. The PRMIA Standards of Best Practice, Conduct, and Ethics (Code of Conduct) represent the standards of behavior that Professional Risk Managers promise to their colleagues and employers. It has been written to cut across geographic and cultural boundaries. All Professional Risk Managers will be required to study the Code for the program and adhere to it to stay in good standing as a certified PRM. The PRMIA Governance Principles delineate seven key principles to best practices of corporate governance, all gleaned from governance documents developed by leading public and private entities from around the world.

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4

To be transparent, nonprofit, independent, member-focused, and member-driven PRMIA is a non-profit professional association under the full control of its members. It does not have for-profit subsidiaries that may financially benefit individuals. The PRMIA Bylaws provide strong protection for member rights and the assets of the membership. We are “of the risk professional, by the risk professional, and for the risk professional.”

PRM Designation has “ The a cutting-edge curriculum that provides for the most effective path to Professional Risk Manager success.

”

— J O H N PA U L B R O U S S A R D, P H D, P R M E D U C AT I O N C O M M I T T E E C H A I R

THE 2019 PRM PROGRAM The Professional Risk Manager Designation program underwent an update in 2017 through the completion of a job analysis study. PRMIA conducted the job analysis study process to ensure the content and structure of the certification program reflects the nature of the role that is being examined during the certification process. The results from the study were reviewed during an October 2017 Test Specification workshop, where the panel members analyzed the data and developed recommendations for the PRMIA Education Committee and Board. In December 2017, the PRMIA Education Committee approved the Test Specification Committee’s recommendations, and in January 2018, the PRMIA Board of Directors approved the transition plan for implementing the 2019 program. As a result of the findings in the study, some changes to the program were identified. Changes include the addition of eight new sub-topics to the syllabus and a change in how the PRMIA case studies are assessed.

2019 TRANSITION PERIOD The transition period from the 2015 PRM program to the 2019 PRM program will end by June 2020. During this transition period, current PRM candidates will receive a detailed transition plan to guide their efforts to complete their PRM during this period, or transition into the 2019 program. Beginning July 1, 2019, new applicants to the PRM program can decide if they want to enroll in the updated 2019 PRM program or the 2015 PRM program. New applicants who choose to enroll in the 2015 PRM program are required to complete all required exams before June 2020. New applicants who enroll in the 2015 program and are unable to complete the required exams before this deadline are transitioned into the 2019 program beginning in July 2020. For complete details on the 2019 transition period and how it impacts the certification path, visit the Transition website, which provides the results of the job analysis study and information for current and prospective candidates as they navigate the certification path.

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PRM Requirements The PRM Designation program consists of three core requirement areas:

What does having PRM after my name do for me? Along with the accomplishment of passing the exam comes the ability to set yourself apart in the industry.

1. Experience Requirements 2. Examination Requirements 3. Recertification Requirements The purpose and scope of each are described in detail in the following sections. The experience and examination requirements must be met within the original three-year enrollment period. Individuals who achieve the PRM Designation mu...