TaxTMI 
TaxTMI 
Stress Testing of Liquid Fund and Money Market Mutual Fund Schemes
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....as been prescribed by SEBI vide circular dated September 30, 2002. As a part of risk management framework, Mutual Funds (MFs) carry out stress testing of their portfolio, particularly for debt schemes. In order to standardize this practice across industry, AMFI came out with Best Practice Guidelines dated September 12, 2014 on stress testing of Liquid Funds and Money Market Mutual Fund Schemes (MM....
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....y by the AMC: i. Interest rate risk ii. Credit risk iii. Liquidity & Redemption risk d. While conducting stress test, it will be required to evaluate impact of the various risk parameters on the scheme and its Net Asset Value (NAV). The parameters used and the methodology adopted for conducting stress test on such type of scheme, should be detailed in the stress testing policy, which is re....
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....g framework in the day-to-day risk management processes iv. Adequacy of the corrective actions and the efficacy of the systems for their activation g. Further, Trustees shall be required to report compliance with this circular and steps taken to deal with adverse situations faced, if any, in the Half Yearly Trustee Report submitted to SEBI. This circular shall be applicable with immediate eff....