AmazonScience/document-haystack

1alternatives products, open ended funds and closed end funds require a different type of 2liquidity risk management. 3Measurement of the liquidity risk compares possible liquidity needs with asset liquidity and is 4summarised in a liquidity profile, which aggregates available liquidity by time buckets, 5considering the time it takes to liquidate assets. In addition, risk management function 6defines further internal limits where appropriate.7Liquidity risk primarily affects open end funds and is addressed by respective provisions 8within the funds. The liquidity limit utilization is monitored on a regular basis. The 9implemented liquidity stress tests follow the approach that, under several predetermined 10liquidity stress test scenarios, the liquidity factors that drive the liquidity of funds are subject 11to severe stress levels which could reasonably be expected to occur. Appropriate thresholds 12are defined and limit utilization is reported to management, as appropriate. Indications for 13high probability of a limit breach trigger immediate escalation and mitigation actions. 14Counterparty Risk 15Counterparty risk relates to the potential losses arising when a counterparty cannot (or does 16not) fulfil its obligation in a transaction. In the context of the Group, counterparties are 17typically third parties with direct market access (broker) or derivative counterparties, 18securities lending counterparties or banks where cash deposits are placed.19Each counterparty must be approved by risk management before any trade can be entered. 20Counterparty risks are identified via market signals (e. g. credit spreads), factors such as 21ratings as well as by the regular review of counterparties. ESG aspects are also considered 22when reviewing a counterparty. Where appropriate, aggregated counterparty exposure limits 23are defined. Monitoring and escalation of limit excesses ensures adequate oversight. Over the 24counter derivatives are traded under an International Swaps and Derivatives Association or 25equivalent agreement such as a German Master Agreement mitigating counterparty risks. 26Derivatives exposure is collateralized according to European Market Infrastructure Regulation 27standards. 28Valuation Risk 29Valuation risk means the risk of possible mispricing of assets in investment portfolios, that 30may result from data feed issues, accounting errors, pricing agents or valuation advisor, lack 31of adequate controls over pricing deficiencies or missing prices, model or input errors, and 32other control processes failures. The Valuation Control Group is responsible for oversight, 33monitoring and management of risk mitigating activities aimed to ensure that the assets in 34investment portfolios are fairly valued in accordance with our fiduciary and regulatory 35obligation. 36The valuation process is implemented by dedicated business and infrastructure teams, as 37well as internal and external service providers. Valuation processes, procedures, and service 38relationships are documented and are designed to ensure compliance with our global 39standards and principles detailed in the valuation policies and relevant legal and regulatory 40requirements and client guidelines. The valuation risk management framework requires the 41implementation of consistent, robust, and reliable valuation and monitoring and control 42processes that define the organizational set-up, standardized procedures and appropriate 43controls. The risk management framework also provides direction for the committees, senior 44management and fund boards mandated to govern the asset valuation process.45        46To our Shareholders Summarised 47Management Report48Consolidated 49Financial Statements Compensation Report Corporate Govern-50ance Statement51Supplementary 52Information DWS 2023 Annual Report53 54Risk Report5557 Fiduciary Investment Risk