+ CG-S04 —
In addition to the constitutional terms the manager is responsible to establish a code of ethics whose adherence has to be overseen by the non-executive officers and the investors. The code of ethics relates amongst others to appropriately skilled, trained and controlled staff of all parties involved in the vehicle. While the non-executive officers have to ensure that the manager has related internal controls in place the investors equally oversee the non-executive officers in this regard.
Investor default: The vehicle documentation should contain a clause determining provisions in the case that investors default on their capital calls. Included penalties and suggested remedies should address automatic default, notification of the non-executive officers or the other investors, forced sale and voting rights.
Investment committee: An investment committee should be installed to assess material changes to the investment strategy and the business plan of individual assets. The composition should be embedded in the vehicle's governance principles.
Use of third parties: The vehicle documentation should set out any use of third party service providers including assigned responsibilities and accountabilities. A system of checks and balances between the manager, the custodian and the paying agent as well as any approval requirements from the investors with respect to appointment or replacement should be disclosed.
Risk control processes: The vehicle documentation should clearly describe the related risk control processes and how the manager monitors, measures and reports these.
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