Regulatory Alerts2025-12-01
Model Risk Management by Asset Managers
The Dutch Authority for the Financial Markets (AFM) issued this report to support asset managers in strengthening their model risk management practices amid increasing reliance on complex data models and AI. The document outlines eight good practices covering governance structures, model definitions, risk appetite, inventory management, validation, lifecycle processes, third-party models, and internal expertise. These recommendations aim to help institutions identify, assess, control, monitor, and report model risks to ensure sound business conduct and mitigate potential financial or operational damage.
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