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. This 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 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.
Financial Risk Manager
Global Association of Risk Professionals (GARP)
Test centre administration
Number of exams
2 (Part I, Part II)
4 hours (each)
Number of questions
Part I - 100 questions
Part II - 80 questions
FRM Certification: Eligibility
Although there are no specific eligibility requirements 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 contributes 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
The FRM exams are offered twice a year for all prospective candidates who want to appear for FRM Part I or Part II. The FRM exam dates are generally in May and November for each year. Registration begins around 4-5 months prior to the exam month. The dates for 2019 are yet to be announced and registration for the FRM exam offered in May 2019 will open on December 1, 2019. The FRM exam dates for 2018 have been given below so that candidates have an approximate idea of the FRM exam dates which may be followed for 2019.
FRM Exam Dates 2018
December 1, 2017
April 15, 2018
May 19, 2018
May 1, 2018
October 15, 2018
November 17, 2019
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 exam fees 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 also differ with the type of registration, the final date for registration for the May session being April 15, 2019.
The FRM fees for registration for the May 2019 exam have been listed below for both new and returning candidates.
FRM Fees for New Candidates (FRM Part I)
FRM Exam fees
Total FRM fees
December 1, 2018
January 31, 2019
February 1, 2019
February 28, 2019
March 1, 2019
April 15, 2019
FRM Exam Fees for Returning Candidates (FRM Part I/Part II)
Total FRM fees
The FRM certification cost for new candidate enrollment is inclusive of 1-year membership to GARP which is equivalent to USD $195. 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
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.
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
Foundations of Risk Management
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
Data aggregation and risk reporting
Ethics and the GARP code of conduct
Discrete and continuous probability distributions
Estimating the parameters of distributions
Population and sample statistics
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
Financial Markets and Products
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
Valuation and Risk Models
Expected shortfall (ES)
Stress testing and scenario analysis
Fixed income valuation
Country and sovereign risk models and management
External and internal credit ratings
Expected and unexpected losses
FRM Syllabus - FRM Exam Part II
Market Risk Measurement and Management (MR)
VaR and other risk measures
Parametric and non-parametric methods of estimation
ES and other coherent risk measures
Modelling dependence: correlations and copulas
Term structure models of interest rates
Volatility: smiles and term structures
Credit Risk Measurement and Management
Default risk: quantitative methodologies
Expected and unexpected loss
Structured finance and securitization
Operational and Integrated Risk Management
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
Risk Management and Investment Management
Portfolio risk measures
Risk monitoring and performance measurement
Portfolio-based performance analysis
Current Issues in Financial Markets
Credit loss provisioning, IFRS 9/CECL
Machine learning and ‘big data’
Central clearing and risk transformation
The failure of covered interest rate parity
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.
Type of questions
Multiple-choice questions (MCQs)
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 2019 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
Number of pages
FRM Books: FRM Part I
Foundations of risk management
Financial markets and products
Valuation and risk models
FRM Ebooks: FRM Part I
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
FRM Ebooks: FRM Part II
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
Other essential medical items
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 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.
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 which offer the top FRM salary include positions like risk manager, business analyst and associate VP market risk, amongst others.
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