A Summary of the Impact of CP86 on Existing and New FMCs – September 2016

A Summary of the Impact of CP86 on Existing and New FMCs1 – September 2016

CP86 Key Requirements Existing FMCs (authorised before Nov 1 2015 New FMCs (authorised after Nov 1 2015)
1. The rationale for board composition to be outlined in the business plan/programme of activity. For existing FMCs, compliance will be required within twelve months of the final CBI2 guidance. Thus likely to be effective by Q4 2017 This is effective and applies to all new FMCs.
2. Separate time commitments and a separate letter of appointment for designated persons (“DPs”). For existing DPs to FMCs, compliance will be required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. For new DPs to existing FMCs compliance is now required. This is effective and applies to all new FMCs.
3. Compliance with guidance on the role of the DP. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017.
4. Streamlined six managerial functions for both UCITS management companies and AIFMs. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. This is effective and applies to all new FMCs.
5. An organisational effectiveness role to be performed by an independent director who doesn’t perform any of
the six managerial functions
Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. This is effective and applies to all new FMCs.
6. Delegate oversight consistent with CBI guidance. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4
2017.
This is effective and applies to all new FMCs.
7. Two thirds of directors to be in the EEA3 . KBA understands that industry bodies have sought to change this requirement through the consultation process. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017.
8. The CBI deems a director to be high risk if the director holds more than twenty directorships and an annual time commitment in excess of two thousand hours. Funds with such directors are subject to greater scrutiny. This is effective and applies to all existing FMCs. This is effective and applies to all new FMCs.
9. Maintain and monitor a specific email address for correspondence with the CBI. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017. Compliance required within twelve months of the final CBI guidance. Thus likely to be effective by Q4 2017.

You can download a copy of a Summary of the Impact of CP86 on Existing and New FMCs – September 2016 here