FRM Changes 2023

An essential feature of any curriculum is that it is subject to change. These changes are meant to standardize an entire program’s learning goal and provide a clear path for students to gain knowledge on currently trending issues that are relevant. The FRM curriculum is revised every year under the direction of GARP’s FRM Committee to ensure that the FRM exam remains valid and that the knowledge and skills acquired are in step with the current financial risks in the market.

Taking note of the various changes in FRM will help you know the suitable materials you need to prepare accordingly for your FRM exam. In this article, we shall look at all the changes that have taken place in FRM this year. Keep scrolling to learn more.

FRM Part I Changes

There are a few changes in the FRM part I. This year the curriculum consists of 62 reading chapters compared to 2022, which had a total of 60 readings. This means that there has been an addition of 2 reading chapters. In some reading chapters, new learning objectives (LO) are added, and in some, the learning objectives have been removed.

When sitting for FRM exams part I, there are five books you will need to study, and each book consists of different chapters, which contribute to a certain percentage of the exams. They Include the following:

1. Foundation of Risk Management – This is book one, and it consists of 11 reading chapters and has been assigned 20% weightage. The content is the same as that of the previous year, 2022. If you had this book, the version of 2022, you would not need to buy a new one.

2. Quantitative Analysis – This is the second book comprising 15 reading chapters and has been given a 20% weightage. There are some additional changes compared to the year 2022.  Two new reading chapters have been added, and new learning objectives have been included in some of the reading chapters.

3. Financial Markets and Products – The third book to be examined has 20 reading chapters. The total percentage of exams set in this area is 30%. The content is still the same as that of 2022.

4. Valuation and Risk Models – This is the final book in the Part I exam of FRM. It consists of 16 reading chapters and has been assigned 30%. The content is still the same.

When you combine all the reading chapters in the different book segments, you will come to 62 reading chapters. Two additional reading chapters are included in the second book of Quantitative Analysis. In 2022, book 2 had 13 reading chapters, but this year 2023, it consists of  15 chapters. The two additional chapters are Machine Learning Methods and Machine Learning and Predictions.

In addition to the new reading, chapters are included, and new learning objectives are added in parts of Quantitative Analysis. For example, in chapter 7 of Linear Regression, a new Learning objective has been added: Estimate the correlation coefficient from the R2 measure obtained in linear Regression with Single Explanatory Variables. Also, chapters eight and chapter 12 have one new learning objective added.

FRM Part II Changes

There are a lot of changes that have taken part in this section. It will be wise for aspiring FRM candidates to take notice of the changes, for this will help them prepare effectively according to the new curriculum. In this part, some study sessions have been faced from the curriculum, and new Learning Objectives have been implemented. 

In 2022, the curriculum of FRM Part II consisted of 99 readings, whereas that of this year, 2023, only has 96 reading chapters. This means that three chapters have been faced out from the curriculum. In this Part II, the books to be read have been subdivided into six books, and they include the following:

1. Market Risk Measurement and Management: This is book one. It consists of 16 reading chapters and has 20% weightage. In this book, two changes have occurred. The first one is in the first chapter of Estimating Market Risk Measures. Here, one Learning Objective has been removed, and in the third chapter of Parametric Approaches (III) Extreme Value, one Learning Objective has been updated. In the rest of the chapters, the content has remained the same.

2. Credit Risk Measurement and Management: This is the second book with 18 chapters and a weightage of 20%. Some changes have occurred in chapters 8, 10, 13,17, and 18. In the rest of the chapters, the contents have stayed the same.

3. Operational Risk and Resiliency: This third book has a total of 24 chapters and has been assigned a percentage of 20. This book has added much new content in chapters 1,2,3,4,5,6,7,8,9,11,13.14, and 16. In the year 2022, this book’s curriculum had a total of 27 chapters, though for this year, three chapters have been removed, and only 24 are remaining.

4. Liquidity and Treasury Risk Measurement and Management: This is the fourth book, with a total of 19 chapters with a total weightage of 15%. Here, the same has occurred. The contents are similar to that of the previous year, 2022.

5. Risk Management and Investment Management: This book consists of 11 chapters with a weightage of 15%. There are no changes in this book.

6. Current Issues in Financial Markets:, This is the last book in FRM part 2 and has a total of 8 reading chapters and a weightage of 10%. In this book, five new chapters have been introduced which were not there in the 2022 curriculum, and these include:

• Climate-related financial risk, chapter 4
• Principles for the effective management and supervision of climate-related finance risk, chapter 5
• Inflation: a look under the hood currency, chapter 6
• The Blockchain Revolution: Decoding digital currency, chapter 7
• The future monetary systems, chapter 8

Combining all the reading chapters will give you 96 chapters and a total weightage of 100%, which you must study before sitting for your FRM exam Part II.

Conclusion

You know what to expect from the above changes in the coming FRM exams this year. You can prepare to register for your exams. FRM exams are offered three times a year, that is, in May, August, and November. You can begin studying for your exams even before you register so that once you are ready, you can book the month, date, and time you are free to sit. Both exam sessions are offered online and have a time frame of 4 hours.

There are a lot of benefits to studying FRM. It is important to note that only until you pass FRM Part I will you be allowed to continue to the next level, Part II. This being noted, you will need to get the updated notes, study effectively and practice questions in preparation for your exams. If you do well in both parts, you will be able to receive global recognition and a wide range of career opportunities.