Related provisions for DEPP 1.2.8
Explanatory table: This table belongs to COLL 6.2.2 G (4) (Purpose).
Correction of box management errors |
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1 |
Controls by authorised fund managers |
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An authorised fund manager needs to be able to demonstrate that it has effective controls over: |
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(1) |
its calculations of what units are owned by it (its 'box'); and |
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(2) |
compliance with COLL 6.2.8 R which is intended to prevent a negative box. |
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2 |
Controls by depositaries |
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(1) |
Under COLL 6.6.4 (General duties of the depositary), a depositary should take reasonable care to ensure that a scheme2 is managed in accordance with COLL 6.2 (Dealing) and COLL 6.3 (Pricing and valuation). |
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(2) |
A depositary should therefore make a regular assessment of the authorised fund manager's box management procedures (including supporting systems) and controls. This should include reviewing the authorised fund manager's controls and procedures when the depositary assumes office, on any significant change and on a regular basis, to ensure that a series of otherwise minor changes do not have a cumulative and a significant effect on the accuracy of the controls and procedures. |
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3 |
Recording and reporting of box management errors |
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(1) |
An authorised fund manager should record all errors which result in a breach of COLL 6.2.8 R (Controls over the issue and cancellation of units) and as soon as an error is discovered, the authorised fund manager should report the fact to the depositary, together with details of the action taken, or to be taken, to avoid repetition of the error. |
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(2) |
A depositary should report material box management errors to the FSA immediately. Materiality should be determined by taking into account a number of factors including:
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(3) |
A depositary should also make a return to the FSA (in the manner prescribed by SUP 16.6.8 R) on a quarterly basis. |
The guidance in relation to the recognition requirements in the sections of REC 2 listed in Column A of the table below applies to an RAP in relation to the equivalent RAP recognition requirements listed in Column C and (if shown) with the modifications in Column B.
Table: Guidance on RAP recognition requirements
Column A REC 2 guidance which applies to an RAP |
Column B Modification to REC 2 guidance for an RAP |
Column C Relevant RAP recognition requirement |
REC 2.2.2 G to REC 2.2.7 G (Relevant circumstances and Outsourcing) |
Reg 13 |
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REC 2.3.3 G to REC 2.3.9 G (Financial resources) |
Reg 14 |
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REC 2.4.3 G to REC 2.4.6 G (Suitability) |
In addition to the matters set out in REC 2.4.3 G to REC 2.4.6 G, the FSA will have regard to whether a key individual has been allocated responsibility for overseeing the auction platform of the UK recognised body. |
Reg 15 |
REC 2.5.3 G to REC 2.5.20 G (Systems and controls and conflicts) and REC 2.5A (Guidance on Public Interest Disclosure Act: Whistleblowing) |
Reg 16 and 17(2)(f)1 |
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REC 2.6.26 G to REC 2.6.34 G (Safeguards for investors) |
Reg 17 |
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REC 2.7.3 G to REC 2.7.4 G (Access to facilities) |
The FSA shall have regard to whether an RAP provides access to bid at auctions only to those persons eligible to bid under article 18 of the auction regulation. |
Reg 17(2)(a) and1 20 |
REC 2.8.3 G to REC 2.8.4 G (Settlement and clearing services) |
Reg 17(2)(d) and 21 |
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REC 2.9.3 G to REC 2.9.4 G (Transaction recording) |
Reg 17(2)(e) |
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REC 2.10.3 G to REC 2.10.4 G (Financial crime and market abuse) |
Reg 17(2)(g) |
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REC 2.11.3 G to REC 2.11.4 G (Custody) |
REC 2.11.4 G is replaced with the following for an RAP: Where an RAP arranges for other persons to provide services for the safeguarding and administration services of assets belonging to users of its facilities, it will also need to satisfy the RAP recognition requirement in regulation 17(2)(h) of the RAP regulations (see REC 2A.2.1 UK). |
Reg 17(2)(h) |
REC 2.12.11 G to REC 2.12.12 G (Availability of relevant information) |
REC 2.12.11 G to REC 2.12.12 G are replaced with the following for an RAP: In determining whether appropriate arrangements have been made to make relevant information available to persons engaged in dealing in emissions auction products2 the FSA may have regard to: (1) the extent to which auction bidders are able to obtain information in a timely fashion about the terms of those emissions auction products2 and the terms on which they will be auctioned, either through accepted channels for dissemination of information or through other regularly and widely accessible communication media; (2) what restrictions, if any, there are on the dissemination of relevant information to auction bidders; and (3) whether relevant information is, or can be, kept to restricted groups of persons in such a way as to facilitate or encourage market abuse. An RAP does not need to maintain its own arrangements for providing information on the terms of emissions auction products2 to auction bidders where it has made adequate arrangements for other persons to do so on its behalf or there are other effective and reliable arrangements for this purpose. 222 |
Reg 17(2)(c) |
REC 2.13.3 G to REC 2.13.6 G (Promotion and maintenance of standards) |
Reg 18 |
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REC 2.14.3 G to REC 2.14.6 G (Rules and consultation) |
Reg 19 |
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REC 2.15.3 G to REC 2.15.6 G (Discipline) |
Reg 22 |
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REC 2.16.3 G to REC 2.16.4 G (Complaints) |
Reg 23 |