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Global Trustee and Fiduciary Services News and Views
| Issue 48 | 2017
35
Directors’ time commitments
This guidance recommends that:
Directors and boards should agree a
minimum time allocation for board
meeting attendance, which should be
documented in each director’s letter of
appointment, and additional time for
ad hoc issues.
Additional time should be allocated
where a director carries out a
chairperson’s role.
A DP role for managerial functions
should be considered separately to the
role of director and a separate time
commitment should be allocated.
A separate letter of appointment
should be issued in respect of DP roles
for managerial functions, which should
be subject to annual review.
Directors should consider any conflicts
of interests and the types and
complexity of funds or sub-funds in
determining their time commitment.
And membership of board
committees should be considered
as a separate role.
This guidance stops short of setting a hard limit
on the number of board appointments that a
director may hold. However, the CBI currently
intends to treat the holding by an individual
director of in excess of 20 directorships (of Irish
authorised investment funds or Fund ManCos)
when combined with an aggregate level of
annual professional time commitment in excess
of 2,000 hours as a risk indicator, which may
entail additional supervisory attention under
the CBI’s risk-based approach.
If it would be proposed to appoint to a Fund
ManCo a director who exceeds the risk indicator
thresholds, it could impact the timeframe
for the CBI’s review of the relevant fund
documentation. The recommendations in the
guidance may also be used by the CBI for future
reviews of board effectiveness, director time
commitments and quality of board operations.
Operational issues (record retention and
retrievability and email address)
This guidance outlines the CBI’s minimum
expectations with respect to the retention,
maintenance, security, privacy, preservation
and accessibility of the documentation, and
records pertaining to a Fund ManCo and its
funds under management (relevant documents).
In brief, the guidance provides that a Fund
ManCo should have immediate and unfettered
access from Ireland to all relevant documents,
which should be available on request to
the CBI. The guidance clarifies that in this
context “immediately” means that documents
requested by the CBI before 1 pm (Irish time)
should be provided to the CBI on the same day,
and documents requested after 1 pm should
be provided to the CBI before noon on the
following day.
Relevant documents would include agreements,
reports, documents filed with the CBI, board
minutes, policies and procedures, financial
statements, minutes of meetings, etc. Relevant
documents can be maintained in hard or
electronic format.
This guidance also provides that a Fund ManCo
must have a record management policy and
procedures appropriate to its nature, scale
and complexity, and a clearly defined records-
retention schedule.
Each Fund ManCo should also maintain a
designated and monitored email address
for correspondence with, and responding
to information requests issued by, the CBI.
Guidance is included for the operation and
monitoring of the email address, which must
be capable of being checked daily. A single
address can be maintained for all funds
under management or for each fund under
management. The CBI may periodically test the
effectiveness and efficacy of the designated
email address.
Transitional arrangements and next steps
The table overleaf highlights key transitional
arrangements, covered by the rules and
guidance, concerning Fund ManCos according
to when they have been authorised. Fund
management companies will want to ensure they
address two key points in particular. They will
want to be sure they address making changes to
their organisational structure and updating their
BPs/PoAs accordingly. Of particular importance
will be the consideration of the board and DP
composition, the allocation of the managerial
functions and the organisational effectiveness
role to ensure that the requirements can be
addressed within the prescribed timelines.