Document ID: chunk:federal_register_of_legislation:F2022C00868:reg:11:p1
Version: federal_register_of_legislation:F2022C00868
Segment Type: reg
Provision Reference: reg 11 (pt 1/2)
Character Range: 23395–26181

11  Delegation of functions by operator
 (1) Subject to any limitations in the laws of the home economy for a passport fund, a function of the operator of the passport fund may be delegated by the operator or further sub‑delegated only if the operator:
 (a) remains responsible to members of the passport fund for the delegated function; and
 (b) has in place suitable processes to ensure that the delegate or sub‑delegate employs an appropriate standard of care when performing the delegated function; and
 (c) has in place suitable processes to:
 (i) ensure that the activities of the delegate and any sub‑delegate in relation to the delegated function are duly monitored and controlled; and
 (ii) evaluate the performance of the delegate and any sub‑delegate in relation to the delegated function; and
 (d) has in place suitable processes to ensure that the home regulator for the passport fund is at all times able to access information about the delegated or sub‑delegated functions from the operator, directly from a delegate or from any person that was a delegate for a reasonable time after they have ceased to be a delegate; and
 (e) has in place suitable processes to ensure that the performance of the function by the delegate and any sub‑delegate can be effectively monitored and reviewed to ensure compliance with these rules as if done by the operator.

Limitation on delegation of investment management function
 (2) The operator must ensure that the function of making investment decisions (the investment management function) for the passport fund may only be delegated or sub‑delegated to an entity (a qualifying delegate) that is licensed, authorised or otherwise regulated to carry out or make investment decisions by a regulator that is a signatory to Appendix A of the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information.
 (3) The investment management business of every qualifying delegate must be regulated in a participating economy or in an economy that has a regulatory framework applying to investment management functions for financial asset CISs that may be offered to the general public in that economy that is broadly similar in effectiveness to that of the home economy for the fund in the opinion of the home regulator for the fund. This subsection does not apply to one or more delegations which together do not account for more than 20% of the value of the passport fund's assets.
 (4) If the operator of a passport fund delegates the investment management function, the operator must have in place suitable processes to ensure that at all times each of the qualifying delegates has one or more officers or employees who when considered together are responsible, whether jointly with