Automatic Enrolment Retirement Savings System Act 2024 section 69

AE provider schemes and risk levels

Section 69 requires each investment management provider to offer funds at three risk levels — higher, medium and lower — using a standardised 1-to-7 risk rating scale, with the Minister empowered to prescribe the scale, methodology and risk-level groupings by regulation.

• Each investment management provider must offer an "AE provider scheme" (a UCITS or alternative investment fund) within each of three risk levels: higher (risk ratings 5, 6 or 7), medium (risk ratings 3 or 4) and lower (risk ratings 1 or 2).
• Risk ratings are assigned on a scale from 1 (lowest risk) to 7 (highest risk), using a scale and methodology that must satisfy conditions prescribed by the Minister by regulation.
• The Minister may replace the default risk levels with different groupings, provided there are always at least three levels and each level is defined by a prescribed risk rating number or range.
• When making regulations on the risk scale and methodology, the Minister must have regard to existing EU and domestic frameworks for rating UCITS and alternative investment funds, financial industry practice, and the extent to which these take climate-related risks into account.