Skip to content

FRM Part II · FRM Exam Part II · Case Study: Investor Protection and Compliance Risks in Investment Activities

Following a compliance failure, a firm wants an early indicator that the remediation is working. Which metric is most useful?

The best indicator is the trend in repeat findings together with the share of corrective actions closed on time and independently validated. These show whether controls are really improving, unlike headcount, revenue or the fine size, which do not measure remediation effectiveness.

  1. ATrend in repeat findings and the proportion of corrective actions closed on time and validatedCorrect
  2. BTotal number of staff on the compliance team
  3. CQuarterly trading revenue
  4. DThe size of the fine paid

Explanation

Declining repeat findings and validated, timely closure of actions show that controls are actually improving. Headcount, revenue and fine size do not measure remediation effectiveness.

Did you get it right without looking?

One question tells you little. A timed set on Case Study: Investor Protection and Compliance Risks in Investment Activities shows your real accuracy, how long you take and where you lose marks.

Practise Case Study: Investor Protection and Compliance Risks in Investment ActivitiesFree diagnostic mock

More Case Study: Investor Protection and Compliance Risks in Investment Activities questions