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Regulations for Fund Management Companies

Annual audit requirements for RFMC and LFMC?

  • Both RFMC's and LFMC's must have their accounts audited.

    As part of the audit compliance for RFMC's auditors must provide confirmation in form 25B - Auditor's Report for a Registered Fund Management Company for LFMC's, auditors must provide confirmation in form 5 - Auditor's Report for a holder of a CMS License, and form 6 Auditor's Certification for a Holder of a CMS License.

    This includes negative assurance that there is nothing that leads the auditor to believe that the following have not been met:

    • the restriction on the number and type of qualified investors and the threshold for assets under management have been maintained
    • the base capital or head office fund requirements are sufficient
    • there are documented policies and procedures as stated in the Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies (SFA 04-G05):
      • independent valuation has been conducted for customer’s assets for the purpose of determining their net asset value
      • the trust and/or custody account(s) has/have been properly maintained at all times
      • there is nothing that may constitute a contravention of Regulation 54A of the SF-LCR.

    For LFMC, the auditors have to further confirm that Internal Controls are adequate and the conditions and restrictions stated in the CMS licence have been complied with.