FUNDS 12.3.10 FUNDS 12.3.10
A Fund Manager of a Domestic Fund must ensure that the risks inherent in the operation of a Fund are adequately addressed, with due regard to the nature of the strategies and investment process employed by the Fund Manager and the role of Fund Administrators and Eligible Custodians and where appointed, prime brokers.(1) The Fund Manager of a Domestic Fund must, to the extent proportionate given the nature of the Domestic Fund and the nature and scale of the Fund Manager, ensure functional and hierarchical separation and independence between:(a) the risk management functions (Fund valuation and asset pricing); and(b) the portfolio management functions (the investment management process).(2) Where the Fund Manager is unable to demonstrate adequate separation and independence in accordance with (1), the Regulator may require the Fund Manager to appoint an independent, suitably competent and experienced Fund Administrator to perform the functions specified in (1)(a).
To provide segregation of the net asset value determination process of the Fund from the investment management process, generally personnel involved in the former should not be involved in the latter. An effective method of achieving such segregation is to delegate the calculation, determination and production of the net asset value to a suitably competent and experienced third party Fund Administrator.