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FRM Certification (Financial Risk Manager) - Exam, Course, Admission, Eligibility, Syllabus & Pattern

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FRM Certification (Financial Risk Manager) - Exam, Course, Admission, Eligibility, Syllabus & Pattern

Edited By Team Careers360 | Updated on Oct 06, 2023 10:55 AM IST

FRM Certification - The Financial Risk Manager or the FRM certification is one of the world’s leading certifications in risk management and is recognized in every major market. The FRM exam is conducted in a computer-based testing format. FRM Part I and Part II must be cleared in chronological order after which candidates must document the requisite work experience in financial risk management in order to be granted Financial Risk Manager status. As of now around 76,000 professionals from over 190 countries and territories have attained FRM certification. Among those who are interested in FRM certification are professionals working in global and regional banks, consulting firms, asset managers, regulators, and companies operating in the real economy.

The FRM certificate is provided by GARP or Global Association of Risk Professionals and is offered at over a 100 test cities across the world. The FRM certification is also considered one of the best finance certifications in terms of return-of-investment (ROI) and is known to lead to a considerable FRM salary and sought-after job positions. The FRM exams are two-fold with Part I and Part II exams which need to be successfully cleared in order for a candidate to be eligible for FRM certification.

FRM Certification: Overview

Item

Details

Name

Financial Risk Manager

Abbreviation

FRM

Governing body

Global Association of Risk Professionals (GARP)

Exam type

International certification

Test centre administration

GARP

Number of exams

2 (Part I, Part II)

Exam duration

4 hours (each)

Number of questions

Part I - 100 questions

Part II - 80 questions

Question type

Multiple-choice (MCQs)

Certification validity

2 years

FRM Certification: Eligibility

Although there are no specific FRM eligibility criteria which have been published by GARP regarding prospective FRM candidates, the certification requirements help delineate the basic eligibility criteria for FRM.

The FRM certification requirements include the two major aspects:

  • The candidate needs to clear FRM Exam Part I and Part II in chronological order and within the prescribed time limit.

  • The candidate needs to demonstrate and document at least 2-years of full time work experience in financial risk management.

Therefore, in order to fulfil the work experience requirement for certification, the candidate needs to meet the following eligibility requirements:

  • The candidate should have completed an undergraduate qualification in a domain related to finance or in any other domain with relevant work experience associated with financial risk management.

  • The candidate must have a working knowledge of the concepts associated with financial risk management.

FRM Certification Process

In order to obtain an Financial Risk Manager from GARP, there are a number of steps which prospective candidates need to follow to obtain the professional accreditation:

  • Candidates must enroll to GARP and register for the FRM Exam Part I through the ‘new candidate’ pathway by creating a registration ID and paying the FRM fees.

  • Upon successful payment of the FRM fees, the candidates will be able to access their GARP account and schedule their test.

  • Candidates can pick a suitable test centre from over 100 test cities around the world for the specific exam date of application.

  • Study material for FRM can also be accessed online through the candidate’s GARP account. This includes sample papers, official books, and study guides.

  • The FRM books require payment additional to the FRM fees and therefore contribute toward the overall FRM certification cost.

  • Candidates must first clear the FRM Exam Part I before they can opt for FRM Part II. In case the candidate opts for both the exams on the same day (in subsequent time slots), then the Part II scores will only be calculated if the candidate clears Part I.

  • Upon clearing FRM Part I, candidates have up to 4 years to give and successfully clear FRM Part II.

  • Candidates need to demonstrate and subsequently document at least 2 years of full-time work experience. This must be done within 5 years from the date of the candidate’s FRM Exam Part II.

  • The certification will be awarded to candidates after documentation of requisite work experience. Candidates can maintain the value of their FRM certificate through continuing professional development.

FRM Exam Dates

FRM exams are now held 3 times a year for candidates opting for Part 1, and twice a year for candidates opting for Part 2. The FRM exam dates are generally in May, July, November and December for each year. Registration begins around 4-5 months prior to the exam month. The dates for 2024 are announced. The FRM exam dates for 2023 and 2024 have been given below to give candidates an approximate idea.

FRM Exam Dates 2023

Key Deadlines


August 2023 (Part 1 & 2)

Nov 2023 (Part 1 & 2)

May 2024 (Part 1 & 2)

Registration opens

March 1, 2023

May 1, 2023

December 1, 2023

Scheduling opens

March 1, 2023

May 1, 2023

December 1, 2023

Early registration ends

April 30, 2023

July 31, 2023

January 31, 2024

Standard registration start

May 1, 2023

Aug 1, 2023

February 1, 2024

Standard registration ends

June 30, 2023

September 30, 2023

March 31, 2024

Last day to schedule/reschedule exam, or select/change exam sites

July 21, 2023

Oct 20, 2023

April 26, 2024

FRM 2023 exam windows

Part 1 & 2 - August 5, 2023

Part 1 - Nov 4-17, 2023

Part 2 - November 18-24, 2023

Part 1: May 11 to 17, 2024

Part 2: May 18 to 22, 2024


FRM Certification Cost

The overall Financial Risk Manager cost comprises FRM exam fees, enrollment fees, membership fees to GARP and expenditure incurred for FRM books and study material. The FRM fees in India and registration fees differ for first-time candidates and returning candidates. For new candidates, only FRM Part I is open for registration and the FRM fees comprise both the enrollment and the exam fee. On the other hand, returning candidates are exempt from paying the enrollment fee and only have to pay the FRM exam fee.

The FRM fees for registration for the May 2024 exam have been listed below for both new and returning candidates.


FRM Exam Fees (FRM Part I/Part II)

Registration type

Enrollment Fee

Early

Standard

FRM Level 1 Fees

USD $400

USD $600

USD $800

FRM Level 2 Fees

NA

USD $600

USD $800

Note - The Enrollment Fee is paid by candidates upon their initial registration. Returning students need not pay any exam registration fee.

Candidates can subsequently chose to maintain their GARP membership if they want to although it is not necessary to be a GARP member in order to sit for the FRM exams.

FRM Fees: GARP Membership Fee

Type of member

Annual membership fee

Individual member

USD $195

Certified FRM/ERP

USD $150

Candidates can pay the FRM certification cost through online methods, wire and check. Check payment of the FRM fees is only valid if the account concerned is with a bank in the US. For international candidates, only the online methods of payment are acceptable which include payment through MasterCard, Visa or Amex Check. For manual payments (not through online payment methods) a processing charge of USD $50 is applicable in addition to the FRM fees.

FRM Syllabus

The syllabus for the two FRM exams differs with FRM syllabus for Part I being associated with various tools which are used in assessing financial risk and Part II having topics associated with the implementation and application of these tools. The FRM syllabus has been released by GARP, the conducting body, and covers the various topics for both Part I and Part II. The official syllabus for each of the FRM exams has been provided in the tables below.

FRM Syllabus - FRM Exam Part I

Area of Study

Topics

Weightage

Foundations of Risk Management

(FRM)


  • Basic risk types

  • Measurement and management tools

  • Creating value with risk management

  • The role of risk management in corporate governance

  • Enterprise Risk Management (ERM)

  • Financial disasters and risk management failures

  • The Capital Asset Pricing Model (CAPM)

  • Risk-adjusted performance measurement

  • Multifactor models

  • Data aggregation and risk reporting

  • Ethics and the GARP code of conduct

20%

Quantitative Analysis

(QA)

  • Discrete and continuous probability distributions

  • Estimating the parameters of distributions

  • Population and sample statistics

  • Bayesian analysis

  • Statistical inference and hypothesis testing

  • Estimating correlation and volatility using EWMA and GARCH models

  • Volatility term structures

  • Correlations and copulas

  • Linear regression and single and multiple regressors

  • Time series analysis and forecasting

  • Simulation methods

20%

Financial Markets and Products

(FMP)

  • Structure and functions of financial institutions

  • Structure and mechanics of OTC and exchange markets

  • Structure, mechanics, and valuation of forwards, futures, swaps and options

  • Hedging with derivatives

  • Interest rates and measures of interest rate sensitivity

  • Foreign exchange risk

  • Corporate bonds

  • Mortgage-backed securities

30%

Valuation and Risk Models

(VRM)

  • Value-at-Risk (VaR)

  • Expected shortfall (ES)

  • Stress testing and scenario analysis

  • Option valuation

  • Fixed income valuation

  • Hedging

  • Country and sovereign risk models and management

  • External and internal credit ratings

  • Expected and unexpected losses

  • Operational risk

30%

FRM Syllabus - FRM Exam Part II

Area of Study

Topics

Weightage

Market Risk Measurement and Management (MR)

  • VaR and other risk measures

  • Parametric and non-parametric methods of estimation

  • VaR mapping

  • Backtesting VaR

  • ES and other coherent risk measures

  • Modelling dependence: correlations and copulas

  • Term structure models of interest rates

  • Volatility: smiles and term structures

25%

Credit Risk Measurement and Management

(CR)

  • Credit analysis

  • Default risk: quantitative methodologies

  • Expected and unexpected loss

  • Credit VaR

  • Counterparty risk

  • Credit derivatives

  • Structured finance and securitization

25%

Operational and Integrated Risk Management

(OR)

  • Principles for sound operational risk management

  • ERM and enterprise-wide risk governance

  • IT infrastructure and data quality

  • Internal and external operational loss data

  • Methods of determining operational risk capital for regulatory purposes

  • Model risk and model validation

  • Extreme value theory (EVT)

  • Risk-adjusted return on capital (RAROC)

  • Economic capital frameworks and capital planning

  • Liquidity risk measurement and management

  • Failure mechanics of dealer banks

  • Stress testing banks

  • Third-party outsourcing risk

  • Risks related to money laundering and financing of terrorism

  • Regulation and the Basel Accords

25%

Risk Management and Investment Management

(IM)


  • Factor theory

  • Portfolio construction

  • Portfolio risk measures

  • Risk budgeting

  • Risk monitoring and performance measurement

  • Portfolio-based performance analysis

  • Hedge funds

15%

Current Issues in Financial Markets

(CI)

  • Credit loss provisioning, IFRS 9/CECL

  • Machine learning and ‘big data’

  • Central clearing and risk transformation

  • The failure of covered interest rate parity

  • FinTech credit

  • Corporate culture

10%

FRM Exam Pattern

Both of the FRM exam parts are 4 hours in duration and feature questions which are multiple-choice in nature. Part I deals with various tools which are used to assess financial risk. This includes fundamental risk management, quantitative analysis, valuation and risk models and financial markets and products. FRM Exam Part II is associated with the application of the tools delineated in Part I. This includes current market issues, investment management, along with credit, market and integrated and operational risk management.

The FRM exam pattern for both of the parts has been provided below.

FRM Exam Pattern

Exam part

Number of questions

Type of questions

Duration

Part I

100

Multiple-choice questions (MCQs)

4 hours

Part II

80

FRM Study Material

In order to prepare for FRM efficiently, prospective candidates can access the various study material which has been provided by GARP. This includes a number of different sources and formats such as:

  • FRM 2024 study material: Each year, GARP releases a new set of study material for FRM. This study material is available for download to applications after completing the FRM registration process.

  • FRM practice exams: GARP provides prospective FRM candidates with practice tests for both Part I and Part II.

  • FRM Books: There are two sets of FRM books which cover the topics delineated in the FRM syllabus. These sets are divided into separate sets for both the parts of the FRM exam and are available for candidates for online purchase. Additionally, the FRM books are also available in ebook format.

FRM Books: Details

Book set

Volumes included

Number of pages

Price

FRM Books: FRM Part I

  • Foundations of risk management

  • Quantitative analysis

  • Financial markets and products

  • Valuation and risk models

1,143



USD $300

FRM Ebooks: FRM Part I

USD $250

FRM Books: FRM Part II

  • Market risk measurement and management

  • Credit risk measurement and management

  • Operational and integrated risk management

  • Risk management and investment management

1,405

USD $300

FRM Ebooks: FRM Part II

USD $250

All the sets of FRM books are four volume sets with each volume focusing on a specific area of study. Additional shipment charges apply for all the FRM books purchased and for FRM ebooks, candidates are provided access to digital material for up to 3 years from date of purchase. These books are to be paid for separately in addition to the FRM exam fees for students who require comprehensive preparation material which covers the entire syllabus.

FRM Exam Day Requirements

There are a number of things that FRM aspirants are required to carry on the date of the exam. This includes:

  • A printed FRM admission ticket. This can be downloaded and printed from the candidate’s GARP registration ID.

  • A current and valid government-issued photo ID such as passport or driver’s license.

  • A GARP approved calculator with cleared memory. Candidates with an unapproved calculator will not be eligible for the test grading process. The acceptable calculator models are:


    • Hewlett Packard 12C/12C Platinum

    • Hewlett Packard 10B II/II+

    • Hewlett Packard 20B

    • Texas Instruments BA II Plus/Plus Professional

Candidates are also permitted to bring certain other articles in their pocket or in a clear plastic bag, including:

  • Wallet or money

  • Extra calculator, calculator case

  • Extra batteries

  • Eyeglasses

  • Earplugs

  • Medicine

  • Tissues

  • Other essential medical items

FRM Result

The candidate will be notified of their exam result via email approximately six weeks after the date of the FRM exam. The exam result will contain only a ‘pass’ or ‘fail’ status along with their quartile ranking which compares the specific candidate’s score to that of his or her peers’. The FRM result comprises no numerical score for review.

FRM Part I Historical Pass Rate (2016-2023) - UPDATED

Year

May

November

2016

45 %

45 %

2017

42 %

42 %

2018

41 %

50 %

2019

42 %

46 %

2020

44 % (October)

45 %

2021

47%

45%

2022

51%

51% (August)

2023

47%

-

FRM Part II Historical Pass Rate (2016-2023) - UPDATED

Year

May

November

2016

50 %

54 %

2017

54 %

52 %

2018

53 %

56 %

2019

60 %

59 %

2020

62 % (October)

59 %

2021

59%

63%

2022

57%

57% (August)

2023

51%

-

FRM Certification Maintenance

The FRM certificate is initially valid for a period of 2 years. In order to maintain the value of the certification, candidates are advised to participate in continuing professional development (CPD). FRM certificate holders are required to earn and document at least 40 credits of CPD every two years in order to maintain their FRM certification status and certificate value.

FRM Salary

The compensation for FRM certificate holders in India is comparable to the salaries offered to other top finance certificate and charter holders like CFA, CA and CMA. The FRM salary is generally in the range of 6 to 24 lacs per annum. Job roles that offer the top FRM salary include positions like risk manager, business analyst and associate VP market risk, amongst others.

Advantages of the FRM Designation

Here are some of the advantages of FRM designation:

  • Having an FRM designation opens doors of candidates to a wide range of career options in the field of finance.

  • FRM certification has a wide recognition across the globe and industries.

  • Candidates having a FRM designation do have a competitive advantage in the finance industry.

  • An FRM certification opens candidates to global networking opportunities.

Frequently Asked Question (FAQs)

1. How much does FRM cost?

FRM  fee for new candidates is $1000 for early registration and $1200 for standard registration. 

2. Is FRM tougher than MBA?

Passing a FRM certification is comparatively tougher than obtaining a MBA degree.

3. Is FRM harder than CFA?

FRM is comparatively more difficulty than CFA.

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The word “choreography" actually comes from Greek words that mean “dance writing." Individuals who opt for a career as a choreographer create and direct original dances, in addition to developing interpretations of existing dances. A Choreographer dances and utilises his or her creativity in other aspects of dance performance. For example, he or she may work with the music director to select music or collaborate with other famous choreographers to enhance such performance elements as lighting, costume and set design.

2 Jobs Available
Social Media Manager

A career as social media manager involves implementing the company’s or brand’s marketing plan across all social media channels. Social media managers help in building or improving a brand’s or a company’s website traffic, build brand awareness, create and implement marketing and brand strategy. Social media managers are key to important social communication as well.

2 Jobs Available
Photographer

Photography is considered both a science and an art, an artistic means of expression in which the camera replaces the pen. In a career as a photographer, an individual is hired to capture the moments of public and private events, such as press conferences or weddings, or may also work inside a studio, where people go to get their picture clicked. Photography is divided into many streams each generating numerous career opportunities in photography. With the boom in advertising, media, and the fashion industry, photography has emerged as a lucrative and thrilling career option for many Indian youths.

2 Jobs Available
Producer

An individual who is pursuing a career as a producer is responsible for managing the business aspects of production. They are involved in each aspect of production from its inception to deception. Famous movie producers review the script, recommend changes and visualise the story. 

They are responsible for overseeing the finance involved in the project and distributing the film for broadcasting on various platforms. A career as a producer is quite fulfilling as well as exhaustive in terms of playing different roles in order for a production to be successful. Famous movie producers are responsible for hiring creative and technical personnel on contract basis.

2 Jobs Available
Copy Writer

In a career as a copywriter, one has to consult with the client and understand the brief well. A career as a copywriter has a lot to offer to deserving candidates. Several new mediums of advertising are opening therefore making it a lucrative career choice. Students can pursue various copywriter courses such as Journalism, Advertising, Marketing Management. Here, we have discussed how to become a freelance copywriter, copywriter career path, how to become a copywriter in India, and copywriting career outlook. 

5 Jobs Available
Vlogger

In a career as a vlogger, one generally works for himself or herself. However, once an individual has gained viewership there are several brands and companies that approach them for paid collaboration. It is one of those fields where an individual can earn well while following his or her passion. 

Ever since internet costs got reduced the viewership for these types of content has increased on a large scale. Therefore, a career as a vlogger has a lot to offer. If you want to know more about the Vlogger eligibility, roles and responsibilities then continue reading the article. 

3 Jobs Available
Publisher

For publishing books, newspapers, magazines and digital material, editorial and commercial strategies are set by publishers. Individuals in publishing career paths make choices about the markets their businesses will reach and the type of content that their audience will be served. Individuals in book publisher careers collaborate with editorial staff, designers, authors, and freelance contributors who develop and manage the creation of content.

3 Jobs Available
Journalist

Careers in journalism are filled with excitement as well as responsibilities. One cannot afford to miss out on the details. As it is the small details that provide insights into a story. Depending on those insights a journalist goes about writing a news article. A journalism career can be stressful at times but if you are someone who is passionate about it then it is the right choice for you. If you want to know more about the media field and journalist career then continue reading this article.

3 Jobs Available
Editor

Individuals in the editor career path is an unsung hero of the news industry who polishes the language of the news stories provided by stringers, reporters, copywriters and content writers and also news agencies. Individuals who opt for a career as an editor make it more persuasive, concise and clear for readers. In this article, we will discuss the details of the editor's career path such as how to become an editor in India, editor salary in India and editor skills and qualities.

3 Jobs Available
Reporter

Individuals who opt for a career as a reporter may often be at work on national holidays and festivities. He or she pitches various story ideas and covers news stories in risky situations. Students can pursue a BMC (Bachelor of Mass Communication), B.M.M. (Bachelor of Mass Media), or MAJMC (MA in Journalism and Mass Communication) to become a reporter. While we sit at home reporters travel to locations to collect information that carries a news value.  

2 Jobs Available
Corporate Executive

Are you searching for a Corporate Executive job description? A Corporate Executive role comes with administrative duties. He or she provides support to the leadership of the organisation. A Corporate Executive fulfils the business purpose and ensures its financial stability. In this article, we are going to discuss how to become corporate executive.

2 Jobs Available
Multimedia Specialist

A multimedia specialist is a media professional who creates, audio, videos, graphic image files, computer animations for multimedia applications. He or she is responsible for planning, producing, and maintaining websites and applications. 

2 Jobs Available
Welding Engineer

Welding Engineer Job Description: A Welding Engineer work involves managing welding projects and supervising welding teams. He or she is responsible for reviewing welding procedures, processes and documentation. A career as Welding Engineer involves conducting failure analyses and causes on welding issues. 

5 Jobs Available
QA Manager
4 Jobs Available
Quality Controller

A quality controller plays a crucial role in an organisation. He or she is responsible for performing quality checks on manufactured products. He or she identifies the defects in a product and rejects the product. 

A quality controller records detailed information about products with defects and sends it to the supervisor or plant manager to take necessary actions to improve the production process.

3 Jobs Available
Production Manager
3 Jobs Available
Product Manager

A Product Manager is a professional responsible for product planning and marketing. He or she manages the product throughout the Product Life Cycle, gathering and prioritising the product. A product manager job description includes defining the product vision and working closely with team members of other departments to deliver winning products.  

3 Jobs Available
QA Lead

A QA Lead is in charge of the QA Team. The role of QA Lead comes with the responsibility of assessing services and products in order to determine that he or she meets the quality standards. He or she develops, implements and manages test plans. 

2 Jobs Available
Structural Engineer

A Structural Engineer designs buildings, bridges, and other related structures. He or she analyzes the structures and makes sure the structures are strong enough to be used by the people. A career as a Structural Engineer requires working in the construction process. It comes under the civil engineering discipline. A Structure Engineer creates structural models with the help of computer-aided design software. 

2 Jobs Available
Process Development Engineer

The Process Development Engineers design, implement, manufacture, mine, and other production systems using technical knowledge and expertise in the industry. They use computer modeling software to test technologies and machinery. An individual who is opting career as Process Development Engineer is responsible for developing cost-effective and efficient processes. They also monitor the production process and ensure it functions smoothly and efficiently.

2 Jobs Available
QA Manager
4 Jobs Available
AWS Solution Architect

An AWS Solution Architect is someone who specializes in developing and implementing cloud computing systems. He or she has a good understanding of the various aspects of cloud computing and can confidently deploy and manage their systems. He or she troubleshoots the issues and evaluates the risk from the third party. 

4 Jobs Available
Azure Administrator

An Azure Administrator is a professional responsible for implementing, monitoring, and maintaining Azure Solutions. He or she manages cloud infrastructure service instances and various cloud servers as well as sets up public and private cloud systems. 

4 Jobs Available
Computer Programmer

Careers in computer programming primarily refer to the systematic act of writing code and moreover include wider computer science areas. The word 'programmer' or 'coder' has entered into practice with the growing number of newly self-taught tech enthusiasts. Computer programming careers involve the use of designs created by software developers and engineers and transforming them into commands that can be implemented by computers. These commands result in regular usage of social media sites, word-processing applications and browsers.

3 Jobs Available
Product Manager

A Product Manager is a professional responsible for product planning and marketing. He or she manages the product throughout the Product Life Cycle, gathering and prioritising the product. A product manager job description includes defining the product vision and working closely with team members of other departments to deliver winning products.  

3 Jobs Available
Information Security Manager

Individuals in the information security manager career path involves in overseeing and controlling all aspects of computer security. The IT security manager job description includes planning and carrying out security measures to protect the business data and information from corruption, theft, unauthorised access, and deliberate attack 

3 Jobs Available
ITSM Manager
3 Jobs Available
Automation Test Engineer

An Automation Test Engineer job involves executing automated test scripts. He or she identifies the project’s problems and troubleshoots them. The role involves documenting the defect using management tools. He or she works with the application team in order to resolve any issues arising during the testing process. 

2 Jobs Available
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