Risk Management and Internal Controls
Regulation 123
Risk Management and Internal Controls
IFSCA (Fund Management) Regulations, 2025No change in 2026Chapter VIII · General Obligations and Responsibilities
Chapter VIII · General Obligations and Responsibilities
Regulation 123 – Risk Management and Internal Controls
High importance about 3 min
Ongoing obligations & governance: Conduct, reporting, risk, custody, change in control and the day-to-day compliance load.
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In plain English
A FME must have a sound risk-management system covering all risks and adequate internal procedures and controls (including for outsourced activities) to protect client/investor interests and assets.
In plain English
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The rule, in its own words
Read the exact text of Regulation 123
123. (1) A FME shall have a sound risk management system for comprehensively managing all risks.
(2) A FME shall have adequate internal procedures and controls, given the types of business in which it engages, including any activities which have been outsourced, with the aim of protecting the interests of clients/investors and their assets and ensuring proper management of risk.
Statutory text — Principal Regulations, 2025 (as amended to 30 January 2026), consolidated where amended. The notified Gazette text prevails. Tap a highlighted word for how it functions.
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What this means in practice
Compliance actions
- Applies to
- All FME categories
- Frequency
- Ongoing
- Evidence
- Risk-management framework and internal-control documentation
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Where it connects
Read alongside
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Check yourself
Quiz Centre
Test yourself on Regulation 123
2 questions in the unified bank test this regulation. Each explains every option and cites the provision.
An FME's internal controls must also cover outsourced activities.
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Your notes
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Ongoing obligations & governance