Regulations for Fund Management Companies
Annual audit requirements for RFMC and LFMC?
Both RFMC's and LFMC's must have their accounts audited.
As part of the audit compliance for RFMC's auditors must provide confirmation in form 25B - Auditor's Report for a Registered Fund Management Company for LFMC's, auditors must provide confirmation in form 5 - Auditor's Report for a holder of a CMS License, and form 6 Auditor's Certification for a Holder of a CMS License.
This includes negative assurance that there is nothing that leads the auditor to believe that the following have not been met:
- the restriction on the number and type of qualified investors and the threshold for assets under management have been maintained
- the base capital or head office fund requirements are sufficient
- there are documented policies and procedures as stated in the Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies (SFA 04-G05):
- independent valuation has been conducted for customer’s assets for the purpose of determining their net asset value
- the trust and/or custody account(s) has/have been properly maintained at all times
- there is nothing that may constitute a contravention of Regulation 54A of the SF-LCR.
For LFMC, the auditors have to further confirm that Internal Controls are adequate and the conditions and restrictions stated in the CMS licence have been complied with.