OPERATIONAL RISK
MANAGER CERTIFICATE
CANDIDATE GUIDEBOOK
The Industry Standard for Operational Risk Practitioners
EXECUTIVE SUMMARY
PRMIA’s Operational Risk Manager Certificate is designed
to deliver a deep, practical understanding of operational
risk management frameworks and measurement
methodologies in financial institutions. Successful
candidates will be better prepared to implement
meaningful risk assessment initiatives, produce useful risk
management information and understand basic modeling
techniques for operational risk measurement.
The Operational Risk exam consists of 60 questions. The
syllabus is based on the PRMIA Operational Risk Manager
Certificate Handbook, together with PRMIA Case Studies
which are freely available on the PRMIA website.
Registration for the exam is via the PRMIA website and
taking the exam is designed to suit the needs of the busy risk professional. Be sure to read this
entire document to view important information that will help you to be a successful candidate.
We hope that you will join us in promoting the PRM™ program as the standard for our industry
and that you will join in our efforts to ensure that it will continue to meet the needs of our
members and our industry.
CONTENTS
1
EXECUTIVE SUMMARY
2
PROGRAM DESIGN
2
PROGRAM DATES
AND LOCATIONS
3
FEES AND REGISTRATION
3
TAKING THE OPERATIONAL
RISK MANAGER EXAM
5
OPERATIONAL RISK
MANAGER SYLLABUS
6
PREPARING FOR THE
OPERATIONAL
RISK MANAGER EXAM
PROGRAM DESIGN
KEY LEARNING OBJECTIVES
DESIGN RATIONALE
The Operational Risk Manager Certificate program
was created at the instigation of PRMIA members
holding senior positions in the industry who felt
there was a gap in the market. It has been designed
by industry leaders, all PRMIA members.
The Operational Risk Manager Certificate is relevant
to all risk-related roles in financial services, in particular Operational Risk Staff, Financial Controllers,
Operations and Technology Managers, and
Compliance and Legal Officers. A grounding in operational risk management techniques is also becoming increasingly important for front line staff, both
from a process and conduct perspective in their
dealings with clients and market counterparts.
The key learning objectives of the Operational Risk
Manager Certificate are to:
■
Gain an appreciation for the role of risk management in the post crisis financial services industry
■
Gain an appreciation for the role of corporate governance in an organization and of the participants,
elements and relationships within risk management
governance
■
Gain an understanding of the different roles in risk
governance and the place of reporting and the use
of various elements of a risk framework
■
Gain an understanding of the theory and process of
risk management and the expected results from a
successful risk management process
■
List and discuss a set of developments in the governance of risk management, with an introduction to
the area of risk culture
■
Describe the elements of a risk management framework and choose the elements to implement in their
own workplace
■
Manage an operational risk assessment program
and apply it in their workplace
■
Understand how to capture, report and investigate
operational risk events, how to produce meaningful
Risk MI including Key Risk Indicator (KRI) data and
trend analysis, and how to implement operational
risk appetite
■
Be able to recognize how operational risk management can assist the overall business and add value
READING MATERIAL
■
PRMIA Operational Risk Manager
Certificate Handbook
■
PRMIA Case Studies
PROGRAM DATES AND LOCATIONS
For your convenience, the exam is offered on every business day of the week.*
■
You may request to schedule your exams at any time. There is no advantage to taking your exams
on any particular date. Questions within exams are drawn from a large database of questions and
are administered randomly, creating thousands of unique exam forms, all of comparable difficulty.
■
PRMIA uses the services of VUE, part of the Pearson Publishing family, to administer the ORM
exams. Pearson VUE is a professional testing firm that has nearly 5,000 testing centers in more
than 165 countries around the world.
■
Please note some important details about registration, cancellation, identification requirements
and space availability in the Registration section found on page 3 and 4.
*Registration and testing for the ORM exam will begin in early 2015.
2
FEES AND REGISTRATION
FEES
Fees, relevant to your membership status, are given at
http://www.prmia.org/orm-certificate/preparation
■
Payment by credit card is required for online
purchases. If you would like to make alternative
arrangements, please contact
certification@prmia.org.
■
PRMIA Sustaining Members are given a
10% discount on the exam fee. You can
become a Sustaining Member online at
www.prmia.org/individual-membership
■
If you are interested in adopting the
Operational Risk Manager Certificate
as a corporate program, please contact
membership@prmia.org. Special pricing on
exam vouchers and preparatory materials
may be available to your company.
REGISTRATION
Registration for the Operational Risk Manager
exam will begin in early 2015. Registration
will be via the link found at
http://www.prmia.org/orm-certificate/preparation.
When you register, a voucher number will be
provided to you that you can use to schedule your
exam at the center, date and time of your choice.
90 DAY RULE
Please note that there is a strict PRMIA policy that exams may NOT
be retaken within 90 days of a prior sitting. Any candidate attempt
to transgress this policy by whatever means may result in penalties
against the candidate which could include forfeit of any PRMIA certifications, vouchers, and possible expulsion from PRMIA.
TAKING THE OPERATIONAL RISK MANAGER EXAM
EXAM FORMAT
The exams are computer-based. You will not receive any copies of
the questions. No paper may be brought into the testing center; however, you will be provided with an erasable board upon request.
Once admitted to the testing room, there will be a tutorial that introduces the functionality of the exam and a brief message from PRMIA.
After this has been viewed, you may begin your exam. You will be
asked multiple-choice questions with four possible responses. There
are no breaks allowed during the exam. The testing system allows
you to mark and review questions as long as time is remaining.
Please note that you are unlikely to finish
your exams with substantial extra time.
You are encouraged to use the tutorial in
an expedient manner, but sufficient time is
allocated for you to complete the tutorial
and the exam.
PERSONAL IDENTIFICATION
On the date of your appointment,
arrive at the testing center at least
15 minutes before the scheduled
start time. You must bring two
forms of identification with you.
The first must be a current government-issued ID with your
photograph and signature.
Examples of Acceptable Forms of Government Issued ID
■ Driver’s License
■ National Identity Card
■ Passport
■ Military ID
Examples of Acceptable Forms of Supplemental ID
■ Credit Card
■ Employee ID Card
Examples of Unacceptable Forms of ID
■ Library Card
■ Social Security Card
3
ARRIVE ON TIME
It is very important that you leave enough time
to arrive at the testing center early.
Candidates that arrive late to the test center
may not be permitted to test. The full charge
for the exam will be made if you are not
admitted for any reason. As these centers
offer exams for other organizations as well,
not everyone in the room will be taking the
same exam, so no assumptions should be
made about when other candidates enter
or leave the testing center.
CANCELLATIONS/CHANGES
In recognition of the busy and changing
schedules of risk managers, you may change
your exam appointment without charge
through the Pearson Vue system at
www.pearsonvue.com/prmia. Please note that
all change requests must be made at least
one business day before the testing date or
the entire exam fee will be forfeited.
Because of the flexibility in rescheduling,
exam fees are non-refundable.
EXAMINATION ADMINISTRATION
Each testing center has an administrator who can assist candidates
with any questions that they may have. In the event of any incident
(computer failure, inadequate supplies, excessive noise, or any other
circumstance) which the candidate believes is not compatible with
good examination conditions, this must be brought to the attention of
the examination proctor immediately upon the incident being noticed
— without continuing the exam. Failure to inform the proctor in this
manner will invalidate any subsequent candidate incident reporting
which cannot be substantiated by the test center.
Your exam results should be available within 15 business days of your
test date and will be delivered to you via the PRMIA website which
you can access by signing in to your PRMIA member page, go to
“Membership” then “PRM Society” and finally “My PRM Profile”.
EXAM SECURITY
The Operational Risk Manager
exam is conducted under
secure conditions. Any attempt
by candidates to copy questions, by any means including
unorganized memorizing, and
to distribute these questions to
other individuals, will be treated as unethical behavior and
may result in penalties against
the candidate which could
include forfeit of any PRMIA
certifications, vouchers, and
possible expulsion from
PRMIA. Indictment to copy,
and usage of copied questions
may also result in the same
penalties.
CALCULATORS
An online scientific calculator, Texas
Instrument TI308XS, is part of the test
delivery system. No other materials may be
brought into the exam room with you. It is
suggested that candidates purchase the
hand-held version (TI-30XS) to fully familiarize themselves with the calculator.
4
OPERATIONAL RISK MANAGER SYLLABUS
A. Introduction
Participants will gain an appreciation of the role of risk
management in the post crisis financial services industry.
1. Regulatory Context since 2008
C. The Risk Management Framework
Participants will be able to describe the
elements of a risk management framework and choose the elements to
implement in their own workplace.
2. Embedding Risk Best Practices
B. Risk Governance
1. Risk Capacity
Participants will gain an appreciation of the role
of risk management in the post crisis financial
services industry.
a. Risk Capacity
b. Resources and Risk Capacity
c. Stress Testing and Simulation
1. Governance
d. Setting the Risk Capacity
a. Origins of Corporate Governance
b. Risk Governance and Strategic Planning
2. Risk Appetite
a. Risk Appetite
c. Risk Governance Principles
b. The Risk Appetite in
an Organization
2. People / Roles and Responsibilities
c. An Example Risk
Appetite Statement
a. The Board
b. CRO
c. Wider Reporting
3. Risk Policies
d. Systems and Documentation
a. Introduction to Policies
3. Process
b. Structure of a Risk Policy
a. Theory
c. Risk Policies in an Organization
b. Risk Management Process
d. Policy Coverage
c. Results
4. Risk Pricing
4. Risk Governance Developments
a. Risk Pricing Introduction
b. Interaction with Internal and
External Partners
c. Capital Costs
SYLLABUS SUMMARY
Section
A Introduction
Percentage
of the Exam
3%
5. Risk Culture
a. Risk Culture
b. Leadership and Risk Culture
c. The Role of the Risk Management
Function in Risk Culture
B Risk Governance
6
10%
C Risk Management Framework
12
20%
D Risk Assessment
12
20%
d. The Place of Other Staff
in Risk Culture
E Risk Information
12
20%
e. Evaluating Risk Culture
F Risk Modeling
8
14%
G Insurance Mitigation
2
3%
H Case Studies
6
10%
60
100%
Total
5
Number of Questions
in the Exam
2
D. Risk Assessment
F. Risk Modeling
Participants will be able to manage an
operational risk assessment program
and apply it in their workplace.
Participants will be able to recognize how operational risk
management can assist the overall business and add value.
1. Risk Assessment
1. Capital & Risk Pricing
E. Risk Information
a. Risk Assessment Overview
b. Risk Assessment Lifecycle
2. Risk Scenarios (‘Top Down’)
Participants will be able to describe
operational risk events, Key Risk
Indicators (KRIs) and Reporting
and create a KRI framework.
c. Example Scenario (DR)
b. Frequency and Severity
c. Combining Approaches
d. Capital Allocation
a. Top Down Identification
b. Workshops
a. Basel II and Operational
Risk Capital
1. Introduction
a. Risk Appetite and Risk Profile
b. Expected Loss
3. Process Models (‘Bottom Up’)
a. Control Identification (Linking
Top-Down and Bottom-Up)
b. Process Reviews
c. Control Framework and
Assessment
4. Operational Risk Issues
a. Identify Issues and Design
Actions Plan
b. Issue Management
c. Unexpected Loss
2. Loss Investigations
G. Insurance Mitigation
a. Operational Risk Incidents
& Investigation
a. Insurance Mitigation
Introduction
b. Collecting Loss Data
b. Risk Taxonomy and Mapping
c. Quantifying Losses
d. Boundary Issues
c. Qualification Criteria of
Insurance Mitigation
e. External Loss Data
d. Calculation of Capital Relief
3. Key Risk Indicators (KRIs)
c. Residual Risk
a. Introduction to KRIs
d. Management Validation
b. Selecting Appropriate KRIs
c. Interdependent KRIs
5. Additional Risk Assessment Topics
a. Risk Assessment of New
and Expanded Products
b. Risk Assessment and
Third Party Services
e. Implementing a KRI
Framework
4. Risk Reporting & Toolsets
a. Data Model
b. Workflows
c. Reporting
PREPARING FOR THE OPERATIONAL RISK MANAGER EXAM
PRMIA Operational Risk Manager Certificate Handbook
PRMIA Case Studies
Available at no charge on the PRMIA website
Operational Risk Manager Course Powered by NextThought
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in the web 2.0: to be social, interactive and engaging, by making use of the latest technology available. PRMIA has partnered
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