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Risk Management Agreement for Hong Kong

Risk Management Agreement Template for Hong Kong

This document is a comprehensive Risk Management Agreement governed by Hong Kong law, designed to establish and regulate the relationship between a risk management service provider and a client organization. It sets out the framework for risk assessment, monitoring, and management services, including detailed provisions for compliance with Hong Kong regulatory requirements, reporting obligations, and liability allocation. The agreement incorporates specific provisions required under Hong Kong legislation, including the Securities and Futures Ordinance and relevant financial services regulations, while addressing data protection requirements under the Personal Data (Privacy) Ordinance.

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What is a Risk Management Agreement?

The Risk Management Agreement serves as a foundational document for organizations seeking to establish formal risk management processes or engage external expertise for risk management services. This agreement is particularly relevant in Hong Kong's highly regulated business environment, where organizations must demonstrate robust risk management frameworks to comply with regulatory requirements. The document typically includes comprehensive provisions for risk assessment methodologies, reporting structures, compliance obligations, and service provider responsibilities. It is especially crucial for regulated entities under Hong Kong's Securities and Futures Ordinance and other relevant legislation, providing a clear framework for risk identification, assessment, mitigation, and ongoing monitoring processes.

What sections should be included in a Risk Management Agreement?

1. Parties: Identification of the contracting parties - typically the risk management service provider and the client organization

2. Background: Context of the agreement and brief description of the parties' business relationship

3. Definitions: Definitions of key terms used throughout the agreement, including technical risk management terminology

4. Scope of Services: Detailed description of risk management services to be provided, including specific risk areas covered

5. Service Provider's Obligations: Key responsibilities and duties of the risk management service provider

6. Client's Obligations: Responsibilities and duties of the client, including information provision and cooperation

7. Risk Assessment Methodology: Agreed approach and framework for conducting risk assessments

8. Reporting and Documentation: Requirements for risk reports, documentation, and communication protocols

9. Fees and Payment Terms: Financial terms, fee structure, and payment conditions

10. Confidentiality: Provisions for handling confidential information and data protection obligations

11. Term and Termination: Duration of the agreement and circumstances for termination

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Force Majeure: Provisions for handling unforeseen circumstances and events beyond parties' control

14. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

What sections are optional to include in a Risk Management Agreement?

1. Regulatory Compliance: Specific section for regulated entities requiring detailed compliance procedures and obligations

2. Insurance Requirements: Detailed insurance obligations when specific coverage is required for risk management services

3. Business Continuity: Provisions for ensuring continuity of risk management services in emergency situations

4. Cybersecurity Requirements: Specific provisions for digital security when handling sensitive data electronically

5. Third-Party Service Providers: Provisions governing the use of subcontractors or third-party service providers

6. Intellectual Property Rights: Provisions for IP rights when proprietary risk management tools or methodologies are involved

7. Data Processing Agreement: Detailed data handling provisions when extensive personal data processing is involved

8. Service Level Agreement: Specific performance metrics and service levels when required by the client

What schedules should be included in a Risk Management Agreement?

1. Schedule 1: Service Description: Detailed breakdown of risk management services and methodologies

2. Schedule 2: Fee Schedule: Detailed fee structure, including any variable fees based on service scope

3. Schedule 3: Service Levels: Specific performance metrics and service level requirements

4. Schedule 4: Reporting Ƶ: Standard formats for risk assessment reports and documentation

5. Schedule 5: Key Personnel: List of key team members and their roles in providing the services

6. Schedule 6: Risk Assessment Procedures: Detailed procedures and methodologies for risk assessment

7. Appendix A: Compliance Requirements: Specific regulatory and compliance requirements applicable to the services

8. Appendix B: Technical Requirements: Technical specifications for any risk management systems or tools

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Hong Kong

Publisher

Ƶ

Cost

Free to use

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