Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision (Text with EEA relevance)

s.art003

Ongoing monitoring of assets under management

• Monitor total value of assets under management on an ongoing basis

s.art004

Occasional breach of the threshold

• Notify FCA if assets exceed threshold and are not temporary

s.art005

Information to be provided as part of registration

• Provide registration information to the FCA

s.art006

General provisions on the calculation of leverage

• Calculate and document your fund's leverage using gross and commitment methods

s.art007

Gross method for calculating the exposure of the AIF

• Calculate AIF exposure using the gross method

s.art008

Commitment method for calculating the exposure of an AIF

• Calculate AIF exposure using the commitment method

s.art009

Methods of increasing the exposure of an AIF

• Use prescribed calculation methods when working out your AIF's exposure

s.art010

Conversion methodologies for derivative instruments

• Use conversion methodologies in Annex II for derivative instruments

s.art011

Duration netting rules

• Apply duration netting rules correctly when calculating AIF exposure

s.art013

Qualitative requirements addressing professional liability risks

• Implement operational risk management and record losses

s.art015

Professional indemnity insurance

• Take out and maintain professional indemnity insurance meeting regulatory standards

s.art017

Duty to act in the best interests of the AIF or the investors in the AIF and the integrity of the market

• Implement policies to prevent market malpractice and avoid undue costs

s.art018

Due diligence

• Apply high-standard due diligence for every investment

s.art019

Due diligence when investing in assets of limited liquidity

• Perform due diligence when investing in illiquid assets after a negotiation phase

s.art020

Due diligence in the selection and appointment of counterparties and prime brokers

• Exercise due diligence when selecting and appointing counterparties and prime brokers

s.art022

Resources

• Employ enough staff with the right skills for the business

s.art023

Fair treatment of investors in the AIF

• Ensure fair treatment of all investors in the fund

s.art025

Effective employment of resources and procedures — handling of orders

• Establish fair and prompt order execution procedures for AIF

s.art026

Reporting obligations in respect of execution of subscription and redemption orders

• Report subscription and redemption order details to investors promptly

s.art027

Execution of decisions to deal on behalf of the managed AIF

• Obtain best possible results when executing trades for your AIF

s.art028

Placing orders to deal on behalf of AIFs with other entities for execution

• Obtain best possible execution for fund orders

s.art029

Aggregation and allocation of trading orders

• Establish and follow fair order aggregation and allocation policy

s.art030

Types of conflicts of interest

• Identify and manage conflicts of interest that could harm your fund or investors

s.art031

Conflicts of interest policy

• Establish and implement a written conflicts of interest policy

s.art032

Conflicts of interest related to the redemption of investments

• Identify, manage and monitor conflicts of interest in open-ended AIFs

s.art033

Procedures and measures preventing or managing conflicts of interest

• Put in place measures to prevent or manage conflicts of interest

s.art035

Monitoring conflicts of interest

• Record and report activities where conflicts of interest have or may arise

s.art037

Strategies for the exercise of voting rights

• Develop voting rights strategies for AIF portfolios

s.art040

Risk management policy

• Establish and maintain a documented risk management policy

s.art041

Assessment, monitoring and review of the risk management systems

• Assess, monitor and review risk management systems annually and notify FCA of material changes

s.art044

Risk limits

• Set and document risk limits for each fund you manage

s.art045

Risk measurement and management

• Continuously identify, measure, manage and monitor all risks to your AIFs

s.art046

Liquidity management system and procedures

• Maintain and demonstrate liquidity management system for each AIF

s.art048

Liquidity management limits and stress tests

• Manage liquidity risks and conduct stress tests on your funds

s.art049

Alignment of investment strategy, liquidity profile and redemption policy

• Ensure alignment of investment strategy, liquidity and redemption policy

s.art051

Requirements for retained interest

• Verify 5% risk retention before securitisation exposure

s.art052

Qualitative requirements concerning sponsors and originators

• Verify sponsor and originator meet securitisation credit risk standards before exposure

s.art053

Qualitative requirements concerning AIFMs exposed to securitisations

• Conduct due diligence and maintain risk management for securitisation investments

s.art054

Corrective action

• Take corrective action if securitisation retained interest requirements fail

s.art057

General requirements

• Set up and run proper governance, controls, and record-keeping for your investment business

s.art058

Electronic data processing

• Set up secure electronic systems to record all portfolio transactions and orders

s.art059

Accounting procedures

• Maintain accounting records and policies for investor protection and accurate NAV

s.art061

Permanent compliance function

• Establish and maintain a permanent compliance function

s.art062

Permanent internal audit function

• Establish and maintain a permanent internal audit function

s.art064

Recording of portfolio transactions

• Record all portfolio transactions for each AIF you manage

s.art066

Recordkeeping requirements

• Retain records for at least five years and ensure FCA access

s.art067

Policies and procedures for the valuation of the assets of the AIF

• Maintain written valuation policies and procedures for each AIF

s.art068

Use of models to value assets

• Document, validate and approve valuation models used for AIF assets

s.art069

Consistent application of valuation policies and procedures

• Apply valuation policies and procedures consistently across your AIFs

s.art071

Review of individual values of assets

• Ensure fair and appropriate valuation of all AIF assets

s.art072

Calculation of the net asset value per unit or share

• Calculate and document net asset value per unit/share for each AIF

s.art076

Objective reasons for delegation

• Provide evidence of objective reasons for delegation to FCA

s.art080

Conflicts of interest

• Manage conflicts of interest when delegating portfolio or risk management

s.art085

Cash monitoring — general requirements

• Provide depositary with full cash account information from day one

s.art086

Monitoring of the AIF’s cash flows

• Your depositary must monitor all cash flows of your AIF daily

s.art087

Duties regarding subscriptions

• Provide depositary with subscription payment details daily

s.art090

Safekeeping duties regarding ownership verification and record keeping

• Cooperate with depositary on ownership verification and record-keeping

s.art091

Reporting obligations for prime brokers

• Ensure prime broker agreement mandates daily reporting to depositary

s.art092

Oversight duties — general requirements

• Provide depositary with all instructions and information for oversight

s.art093

Duties regarding subscription and redemptions

• Reconcile subscriptions and redemptions regularly

s.art097

Duties related to the AIF’s income distribution

• Depositaries must oversee AIF income distribution and dividend payments

s.art100

Loss of a financial instrument held in custody

• Have a documented process to identify custody asset losses and notify investors immediately

s.art104

Content and format of the balance sheet or statement of assets and liabilities and of the income and expenditure account

• Prepare financial statements with prescribed line items and format

s.art106

Material changes

• Assess and disclose material changes in fund information to investors

s.art107

Remuneration disclosure

• Disclose staff remuneration details to investors

s.art110

Reporting to the FCA

• Report AIF portfolio and risk data to the FCA

s.art111

Use of leverage on a ‘substantial basis’

• Report to FCA when fund leverage exceeds 3x net asset value