It is a regulatory requirement that the board of a Fund, the Management Company or the Alternative Investment Fund Manager (AIFM) remain responsible for the activities delegated to third parties and the need to oversee their activities and performance. With a view to simplify and facilitate initial and ongoing due diligence reviews, an ALFI working group under the aegis of the ALFI Fund Governance Forum was created to consider whether the different approaches taken to due diligence on delegates by the boards of Luxembourg funds, management companies, and AIFMs could be more consistent.
The ALFI working group has now finalised a Framework for Due Diligence Information Packs for service providers acting as central administrators and/or depositary/custodian.
This framework seeks to provide a table of contents upon which service providers (delegates) to which a fund Board, Management Company or AIFM has delegated activities and services can base their preparation of documentation required to support the initial and ongoing due diligence reviews of a fund and/ or its Management Company under Luxembourg regulations. The document should not be considered as an exhaustive list of areas for delegates to cover, nor a prescriptive guide on the approach to a due diligence process. It is intended to facilitate an effective due diligence process for the delegates as well as those undertaking due diligence.
Download the document here.