Guideline 67. Selection process for external fund managers

Submitted by Anonymous (not verified) on Tue, 07/10/2018 - 09:46

The board and/or management use best practice to select the fund managers for the investment reserve funds of the institution.

Guideline code

GG_08800

Mechanism

The board and/or management should establish minimum suitability standards, performance history requirements and a code of ethics for external fund managers.
The board and/or management should also define the grounds for liability of and mismanagement by the external fund managers.
Targets, standards and benchmarks should be established to evaluate the performance of each external fund manager, noting that the performance evaluation period should take into consideration the nature of the assets invested in.

Parent

Structure

To enhance accountability, transparency and predictability, there should be a written process, established in the by-laws of the institution, to select its external fund managers and to establish the type of mandate given to them.
The board should direct the management to document and implement the policies, criteria and requirements to support the mandated process.
The internal audit office should be part of the checks and safeguards to ensure compliance with the process.