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  1. Point in time
    2018-09-28

FUND 3.8 Prime brokerage firms

Application

FUND 3.8.1R

This section applies to:

  1. (1)

    a full-scope UK AIFM of:

    1. (a)

      a UK AIF;

    2. (b)

      an EEA AIF managed or marketed from an establishment in the UK; and

    3. (c)

      a non-EEA AIF; and

  2. (2)

    an incoming EEA AIFM branch which manages or markets a UK AIF.

Selection of a prime brokerage firm

FUND 3.8.2R

An AIFM must exercise due skill, care and diligence in the selection and appointment of a prime brokerage firm.

[Note: article 14(3) second paragraph of the AIFMD]

Prime brokerage firm contract

FUND 3.8.3R

Where the AIFM, on behalf of an AIF, uses the services of a prime brokerage firm, the terms must be in a written contract. In particular, any possibility of transfer and reuse of AIF assets must be provided for in that contract and must comply with the AIF's instrument constituting the fund. The contract must provide for the depositary to be informed of the contract.

[Note: article 14(3) first paragraph of the AIFMD]