CIR 13.10.2 Guidance
1. Article 27
(1)(e) of the Law requires a Fund Manager to appoint an Eligible Custodian with whom the legal title to the Fund Property is registered, unless the Rules provide otherwise. CIR Rule 12A.3.1
(2)(c) provides that this requirement does not apply to a Qualified Investor Fund that is a Venture Capital Fund. CIR Rule 13.10.2
makes similar provision for the requirement not to apply where a Venture Capital Fund is an Exempt Fund.
2. Where a Fund Manager of a Venture Capital Fund holds Fund Property of any type, whether investments, cash or other liquid assets, the Fund Manager must ensure that the property is clearly identifiable as Fund Property and is properly segregated from all other assets belonging to, or managed by, the Fund Manager, so that it is not available to creditors in the event of the insolvency of the Fund Manager.
3. The Fund Manager of a Venture Capital Fund does not need to have an internal audit function (see GEN Rule 5.3.13
) or a Finance Officer (see Gen Rule 7.5.1
) if the Fund Manager only manages Venture Capital Funds. The DFSA may, in the case of such a Fund Manager, also consider granting temporary relief from requirements in GEN section 7.5
for the appointment of other Authorised Individuals (such as a Compliance Officer) during the period between authorisation and any initial commitment of capital.
4. The DFSA may, in the case of a Fund Manager of a Venture Capital Fund, also consider granting temporary relief from the requirements in CIR Rule 9.2.1
for the preparation of financial statements for the Fund for the period between authorisation and any initial commitment of capital.
6. If a Fund Manager of a Venture Capital Fund obtains the services of special advisers, for example, to select venture capital businesses to invest in, or to monitor their on-going performance, those advisers should not be held out as being an investment committee of the type referred to in CIR Rule 13.3.1
. Such a description would be misleading, unless the Fund Manager chooses to follow the requirements in that Rule.