The Professional Risk Managers' International Association (PRMIA) is a non-profit, member-driven
professional organization
A professional association (also called a professional body, professional organization, or professional society) is a group that usually seeks to advocacy, further a particular profession, the interests of individuals and organisations engaged in ...
that focuses on the development and education of the
risk management
Risk management is the identification, evaluation, and prioritization of risks, followed by the minimization, monitoring, and control of the impact or probability of those risks occurring. Risks can come from various sources (i.e, Threat (sec ...
profession. Its membership provides a network of risk professionals working to set standards for the global risk profession. PRMIA offers the Professional Risk Manager designation and several other certificate programs for
professional certification
Professional certification, trade certification, or professional designation, often called simply ''certification'' or ''qualification'', is a designation earned by a person to assure qualification to perform a job or task. Not all certifications ...
purposes.
Professional Risk Manager
The Professional Risk Manager (PRM) designation is a
professional certification
Professional certification, trade certification, or professional designation, often called simply ''certification'' or ''qualification'', is a designation earned by a person to assure qualification to perform a job or task. Not all certifications ...
offered by PRMIA.
The designation was first awarded in 2004. The PRM is an "independent validation" of skills within the
financial risk management
Financial risk management is the practice of protecting Value (economics), economic value in a business, firm by managing exposure to financial risk - principally credit risk and market risk, with more specific variants as listed aside - as well ...
profession, and
professional ethics
Professional ethics encompass the personal and corporate standards of behavior expected of professionals.
The word professionalism originally applied to vows of a religious order. By no later than the year 1675, the term had seen secular appli ...
. The PRM and the
FRM offered by the
Global Association of Risk Professionals are often compared as being the two definitive risk management designations in the industry.
PRM Candidates are required to pass two exams in sequence; both 4 hours in duration:
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(a) Finance theory, financial instruments, and financial markets;
(b) Mathematical foundations of risk measurement (
calculus
Calculus is the mathematics, mathematical study of continuous change, in the same way that geometry is the study of shape, and algebra is the study of generalizations of arithmetic operations.
Originally called infinitesimal calculus or "the ...
, matrix- and linear algebra
Linear algebra is the branch of mathematics concerning linear equations such as
:a_1x_1+\cdots +a_nx_n=b,
linear maps such as
:(x_1, \ldots, x_n) \mapsto a_1x_1+\cdots +a_nx_n,
and their representations in vector spaces and through matrix (mathemat ...
, probability
Probability is a branch of mathematics and statistics concerning events and numerical descriptions of how likely they are to occur. The probability of an event is a number between 0 and 1; the larger the probability, the more likely an e ...
, statistics
Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...
, and numerical methods
Numerical analysis is the study of algorithms that use numerical approximation (as opposed to symbolic manipulations) for the problems of mathematical analysis (as distinguished from discrete mathematics). It is the study of numerical methods t ...
)
-
(a) Risk management practices (risk management frameworks apital allocation, regulatory capital, economic capital">regulatory_capital.html" ;"title="apital allocation, regulatory capital">apital allocation, regulatory capital, economic capital, capital adequacy], operational risk, credit risk, counterparty credit risk,
market risk
Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility.
There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the m ...
, liquidity risk
Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price.
Types
Market liquidity – An asset cannot be ...
, funds transfer pricing, FTP, Asset liability management, ALM);
(b) Case studies;
(c) ''PRMIA standards of best practice, conduct and ethics''
The exams are computer-based and the questions are all multiple choice; the passing grade is 60%. The exams must be completed over a period of up to two years; they are offered during four specific testing windows per year.
Historic individual exam pass rates, under the pre-2019 structure, were 54% for Exam II (mathematics), 59% for Exams I and III (finance, and risk management), and 78% for Exam IV (standards and case studies);
[FAQs](_blank)
/ref> with an overall completion-rate of just over 65%.
The PRM program recognizes other professional designations and gives partial credit to "cross-over" candidates, as well as to graduates of select university programs.
Minimum experience requirements are: four years without a bachelor's degree
A bachelor's degree (from Medieval Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate degree awarded by colleges and universities upon completion of a course of study lasting three to six years ...
; two years for those with bachelor's degrees; no requirements for holders of a relevant graduate degree
Postgraduate education, graduate education, or graduate school consists of academic or professional degrees, certificates, diplomas, or other qualifications usually pursued by post-secondary students who have earned an undergraduate (bachelor ...
(i.e. MBA
A Master of Business Administration (MBA) is a professional degree focused on business administration. The core courses in an MBA program cover various areas of business administration; elective courses may allow further study in a particular a ...
, MSF, MQF etc.) or of an accepted professional designation ( CFA, CAIA, CQF, etc.). To maintain the designation, holders are required to complete 20 " Continuing Risk Learning" credits each year, to renew their "Sustaining Membership", and to uphold the professional and ethical standards as defined by the ''PRMIA Standards of Best Practice, Conduct and Ethics''.
Other programs
Since 2022, PRMIA offers the ORM Designation, focusing on the "skills and capabilities" of the Operational Risk Manager role. The designation requires 2 exams, 8 hours in total, 1 year of direct operational risk experience, and a combination of 4 year's other work experience or completed degrees. As for the PRM, Designates must submit 20 CRL credits each year.
PRMIA offers various stand-alone certificate programs designed to give a focused and foundational understanding of various areas of risk management. As for the PRM, the passing score for these is 60%. The computerized tests are offered on all business days. To maintain certification one is required to uphold PRMIA’s professional and ethical standards.
*The "Associate PRM" covers the core risk management concepts in a less mathematical fashion than the PRM, "allowing non-specialists to interpret risk management information and reports".Home , Professional Risk Managers' International Association - PRMIA
/ref> A single 3 hour exam is required; the recommended text is ''The Essentials of Risk Management'' ().
*The "Operational Risk Manager Certificate" prepares managers to "implement risk assessment initiatives, produce risk management information and understand basic modeling techniques"; this is an entry-level certificate, as distinct from the Designation above. The exam is 2 hours duration. Preparation is the practitioner-authored ''Operational Risk Manager Certificate Handbook''. ''ORM Online Training'' is also available.
*The "Credit and Counterparty Risk Manager" Certificate focuses on a practical understanding of credit risk analysis frameworks within financial institutions. The program is designed to be relevant to credit risk staff, as well as to financial controllers, and compliance and legal officers. The exam is 2 hours duration. Preparation is the ''Credit and Counterparty Risk Manager Handbook''.
*The "Market, Liquidity and Asset Liability Management Risk Manager Certificate" covers the areas of market risk
Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility.
There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the m ...
, liquidity risk
Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price.
Types
Market liquidity – An asset cannot be ...
, and asset liability management
Asset and liability management (often abbreviated ALM) is the term covering tools and techniques used by a bank or other corporate to minimise exposure to market risk and liquidity risk through holding the optimum combination of assets and liabili ...
, and similarly focuses on application in financial institutions. The exam is 2 hours duration. Preparation is the ''Market, Liquidity and Asset Liability Management Risk Manager Handbook''.
See also
References
External links
*
PRMIA Standards of Best Practice, Conduct and Ethics
{{Authority control
Risk management in business
International professional associations
Organizations established in 2002
Non-profit organizations based in Minnesota
Northfield, Minnesota
Business and finance professional associations