Cleaning is the order of the day in this brave new COVID-19 world. Consultant Jeunesse Meldrum says fund managers looking to position themselves to move ahead in the 'new normal' are using this time to tidy compliance systems and procedures, back-office functions, and relationships with service providers.
If you want to join the 'quarancleaning' craze, then here are some ideas to start you off:
- Review your current compliance systems and procedures and how they operate. Do they deliver your desired outcomes and features, including automation, reporting requirements, and budget?
- Review your compliance policies (eg breach reporting and recording, related party and conflict of interests, complaints handling). Are your policies up-to-date and consistent with changes to the law? Would your business benefit from additional policies to fully document your compliance arrangements?
- Review your arrangements with service providers (eg distribution agreements). Are the arrangements formalised, up-to-date, and consistent with changes to the law?
- Review your fund agreements (eg investment management agreements, registry, administration, and custody agreements). Are all your agreements up-to-date and consistent with changes to the law?
- Assess the roles your staff undertake in connection with holding your AFS licence, managing compliance, and providing financial services. Are your compliance staffing requirements adequate? Would your staff benefit from additional training or resources?
- Prepare for upcoming changes to the law for registered managed investment schemes. Have you updated your reporting processes and PDS templates to capture and present fees and costs information in the format required by the new Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements, which will apply post 30 September 2020? For more information about RG 97 click here for an article by Jeunesse Meldrum. Have you started to prepare your product governance framework and engage with distributors about the new design and distribution obligations, which will be enforced from 5 October 2021? You can read more about these changes here.
What's the next best step?
Our funds management lawyers can help you with these tasks to improve your compliance framework and compliance culture.
In addition, from time to time, ASIC undertakes routine checks of the compliance arrangements of AFS licensees. If you want to engage in best practice and truly test the rigour of your existing compliance systems, then our funds management lawyers can undertake a trial surveillance of your business. This process is a mock ASIC investigation to help you identify any deficiencies in your compliance arrangements and determine whether enhanced processes and procedures are required having regard to the nature of your current and proposed business activities. It is time very well spent.