Revised Fund Manager Code of Conduct (FMCC) newsletter series - Have you got your ducks in a row?

The revised Fund Manager Code of Conduct (FMCC) will be effective on 17 November 2018. How ready are fund managers for achieving compliance? This newsletter series will touch on some areas which we believe will present challenges for industry players, as well as highlighting some key considerations fund managers should take into account in their compliance journey.


Edition 8 - 2 November 2018 

Fund managers who engage in security lending, repo and reverse repo transactions (securities lending) activities on behalf of the funds they manage, and receive collateral in relation to these activities, will need to have in place both a collateral valuation and management policy as well as a cash collateral reinvestment policy (fund in this context also includes discretionary accounts). The revised FMCC also requires these fund managers to have an eligible collateral and haircut policy. For fund managers who are also responsible for the overall operation of a fund, the revised FMCC codifies new disclosure requirements in relation to a fund’s securities lending activities. These disclosures, including transactional information on the fund’s use of these instruments, must be provided to investors on at least an annual basis. 


Edition 7 - 19 October 2018

For Fund Managers responsible for the overall operation of a fund (fund in this context also includes discretionary accounts), the revised FMCC codifies new disclosure requirements in relation to leverage. Fund Managers must disclose to investors (i) the expected maximum use of leverage which it may employ on behalf of the fund; and (ii) the basis of calculation of leverage which should be reasonable and prudent.


Edition 6 - 5 October 2018

The revised FMCC codifies a number of new and enhanced general requirements that are applicable to all fund managers. The sixth edition of our FMCC Newsletter Series focuses on four of these areas, being (i) newly codified requirements around conflicts of interest; (ii) enhanced obligations surrounding the appointment of delegates; (iii) heightened requirements over personal account dealing; and (iv) increased emphasis around prevention of market misconduct.


Edition 5 - 21 September 2018

The fifth edition of our revised FMCC newsletter series focuses on enhanced codified requirements for Fund Managers, who have responsibility for the overall operation of a fund, over the custody of fund assets (fund in this context includes both collective investment schemes and discretionary accounts). Within the newsletter we touch on five core areas, including (i) what Fund Managers should consider during the evaluation of prospective custodians; (ii) a Fund Manager's obligation to ensure an appropriate custody agreement is in place; (iii) a Fund Manager's responsibility for monitoring the performance of a custodian on an ongoing basis; (iv) disclosure requirements to investors; and (v) obligations where self-custody of assets is adopted.


Edition 4 - 7 September 2018

The fourth edition of our revised FMCC newsletter series focuses on enhanced codified requirements around risk management. Within the newsletter we highlight the five risk management areas where Fund Managers will need to review their existing policies and procedures. We also emphasise the requirement for Fund Managers to perform periodic stress testing as well as periodic reviews of the continued effectiveness of established risk management policies and procedures.

Edition 3 - 24 August 2018

Our third edition focuses on two areas. Firstly, the newly enacted requirement for Fund Managers, responsible for the overall operations of the funds they manage, to ensure that an annual independent audit of those funds' financial statements is completed. Secondly, the existing requirement that a Fund Manager should maintain an independent function (internal or external) to review and report on the adequacy, effectiveness and efficiency of the Fund Manager’s management, operations and internal controls.

Edition 2 - 10 August 2018

This second edition focuses on enhanced requirements for Fund Managers within the revised FMCC over their valuation policies, procedures and controls, including the requirement to appoint a functionally independent party to execute an annual review. It further builds on our outlined potential roadmap for industry players to follow on their path to complying with the revised FMCC.


Edition 1 - 27 July 2018

This first edition focuses on some of the key requirements within the revised FMCC which are relevant to Discretionary Account (DA) managers. It further outlines a potential roadmap for industry players to follow on their path to complying with the revised FMCC.

PwC Capabilities

Our experienced team of regulatory professionals are able to assist you in a range of areas to ensure your ongoing compliance with regulatory expectations:

  • Licensing applications.
  • Policy, procedure and control design and implementation support, including internal control reviews.
  • Ongoing compliance support.
  • Mock regulatory reviews and regulation gap assessments.
  • Staff compliance training.

Should you have any questions or would like to know more about our capabilities, please feel free to contact any of the contacts listed in the newsletter or in the Contact Us section below.

Contact us

Carlyon Knight-Evans
Tel: +[852] 2289 2711

Helen Li
Tel: +[852] 2289 2741

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