Risk Management and Compliance
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Risk Management and Compliance

Risk management is a complex area. It requires constant re-examination and enhancement of approach. As a manager of managers, UTAM’s risk management has been somewhat constrained and our philosophy has centered on diversification and ensuring effective investment strategy execution and external manager selection, supplemented by diligence in the monitoring of performance and compliance. UTAM also regularly reviews the liquidity profile of the portfolios, counterparty exposure and basic stress testing. Additionally, all employees are subject to a Code of Ethics that governs conduct in respect of potential conflicts of interest including personal investing.

External Oversight

  • UTAM’s Board of Directors (“Board”): please refer to “Governance” section of the website for additional details.
     
  • External Auditor: Ernst & Young, LLP is responsible for auditing and opining on UTAM’s financial statements.
     
  • Ontario Securities Commission (“OSC”): UTAM is registered as “Portfolio Manager” with the OSC, the official regulatory body for securities and capital markets participants in Ontario. As such, UTAM is subject to the rules, regulations and compliance requirements for continual OSC registration (for further information, please visit http://www.osc.gov.on.ca).

Internal Oversight

  • Management Committee: as Senior Management of the Corporation, this group meets every 2 weeks to discuss all aspects of the firm’s investment and operational activities.
     
  • Management Investment Committee: this Committee meets every 2 weeks, and comprises the Senior Management and all investment professionals. Investment decisions, whether asset allocation or external investment manager hiring related, are formally approved by this Committee.  In addition, the Committee regularly reviews portfolio cash flow forecasts, scenario modelling, etc.
     
  • Internal Audit: this function is outsourced to Deloitte & Touche LLP who conducts reviews of UTAM's business processes and the associated risk and control framework.  Their findings are reported to the UTAM Board.

Compliance Oversight

The responsibility of this function is to ensure appropriate policies and procedures are in place to effect management oversight from an operational and regulatory compliance perspective.

The two key oversight areas are:

  • Investment Compliance: governs UTAM’s investment-related activities. This includes monitoring of asset mix at the total portfolio level (i.e. Pension, LTCAP and EFIP), which is an integral part of Investment Committee oversight, as well as external managers’ compliance with investment guidelines at the individual fund level.
     
  • Code of Ethics: this sets out clear guidelines for employees in respect of personal investing and conflict of interest. Personal investment transactions are subject to prior submission of ‘trade intent’ and monitored against employees’ brokerage statements.

This page was last updated Mar 28, 2017