After extensive public comment, the Financial Services Conduct Authority (FSCA) has published the final conduct standards for the delegation of administrative functions by Collective Investment Scheme (CIS) managers.
The Delegation Standard is aimed at ensuring that the delegation of administration functions by a CIS manager to a third party does not impair the prudent management of the administration of a collective investment scheme. It is also intended to ensure the risks associated with a delegation arrangement are adequately assessed and managed by the CIS manager, not only before entering into an arrangement, but also on an ongoing basis.
The Delegation Standard sets out minimum requirements for the delegation of administration functions by CIS managers before they enter into these arrangements, while they are in effect and when they end.
Some of the requirements of the Delegation Standard are that the CIS manager must have a board-approved delegation policy, submit an application for approval 30 days prior to effective date of delegation, conduct proper due diligence prior to entering into delegation arrangements and that the remuneration must be market-related.
The Delegation Standard was effective from publication date (19 May 2020). However delegation arrangements approved prior to publication of the Delegation Standard must comply with the Delegation Standard within 12 months of its publication date.
