• Section 11 Section 11 Accounting and Audit Requirements

    • Article 76 - Appointment of Administration Officer and Maintenance of Accounting Records

      (1) Unless resolved otherwise by Special Resolution of Members, a finance officer (who may also be referred to as an administration officer) for the Investment Club must be appointed to ensure that the Investment Club meets its obligations to maintain accounting Records. In particular, the functions of the administration officer shall include:
      a. maintenance of the financial books and records of the Investment Club;
      b. calculation of the net asset value of the portfolio of the Investment Club;
      c. the preparation of financial accounts of the Investment Club;
      d. the preparation of financial reports for presentation to the directors and/or Members;
      e. reconciliation of statements provided by any brokers against transactions entered into by the Investment Club;
      f. payment of the Investment Club expenses;
      g. the calculation and payment of dividends and any other distributions; and
      h. ensuring compliance with the obligations of the Investment Club under the AML/CFT Law as set out in Article 93.
      (2) Every Investment Club must keep proper accounting Records with respect to all sums of money received and expended by the Investment Club and all sales and purchases of goods and services and other transactions by the Investment Club and the assets and Liabilities of the Investment Club. Such accounting Records, must be sufficient to show and explain all transactions by the Investment Club and must be recorded in such a manner as to:
      a. disclose with reasonable accuracy the financial position of the Investment Club at any time; and
      b. enable the directors to ensure that any accounts prepared by the Investment Club comply with the requirements of these Regulations.
      Derived (as from 20th December 2016).

    • Article 77 - Location of Accounting Records

      (1) The Investment Club's accounting Records must be:
      a. kept at the Investment Club's registered office;
      b. preserved by the Investment Club for at least 6 years from the date to which they relate; and
      c. made available for inspection at all reasonable times by the directors and auditor of the Investment Club.
      (2) If an Investment Club fails to comply with Article 76 and Article 77(1), the Investment Club and every Officer is in contravention of these Regulations.
      Derived (as from 20th December 2016).

    • Article 78 - Financial Year of an Investment Club

      (1) The first financial year of an Investment Club starts from the day on which it is incorporated and lasts for the period ending on the financial year end date specified in the incorporation document falling not less than 6 months and not more than 18 months after incorporation of the Investment Club.
      (2) The second and any subsequent financial year must start with the day immediately following the end of the Investment Club's previous financial year and end on the financial year end date in the next Calendar Year.
      (3) An Investment Club may by notice in the Prescribed Form given to the CRO specify a new financial year end date having effect in relation to:
      a. the Investment Club's current financial year and subsequent financial years; or
      b. the Investment Club's previous financial year and all financial years subsequent to that previous financial year
      where, an Investment Club's "previous financial year" means that year immediately preceding its current financial year.
      (4) The notice must state whether the current or previous financial year:
      a. is to be shortened, so as to come to an end on the first occasion on which the new financial year end date falls or fell after the beginning of the financial year; or
      b. is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the year.
      (5) The Investment Club must not extend its financial year more than once every 5 years from the end of an earlier extended financial year and any notice to the contrary is ineffective.
      (6) A notice under Article 78(3) may not be given in respect of a previous financial year if the period allowed for laying and delivering accounts in relation to that year has al expired.
      (7) An Investment Club's financial year must not, in any case, be extended so as to exceed 18 months and a notice under Article 78(3) is ineffective if the current or previous financial year as extended in accordance with the notice would exceed that limit.
      Derived (as from 20th December 2016).

    • Article 79 - Investment Club Accounts

      (1) The directors of every Investment Club must cause accounts to be prepared in relation to each financial year of the Investment Club which must be in the English language and must comprise or include:
      a. financial statements set out in accordance with IFRS, UK GAAP, US GAAP or such other accounting principles and standards as may be prescribed in rules made by the QFC Authority; and
      b. such further information as may be required by these Regulations, any rules made by the QFC Authority and the Investment Club's articles of association.
      (2) The accounts must be prepared in accordance with accounting principles and standards prescribed in rules made by the QFC Authority and comply with any other requirements of these Regulations or any rules made by the QFC Authority. The accounts must show a true and fair view of the profit or loss of the Investment Club for the financial year in question and of the state of the Investment Club's affairs at the end of such financial year.
      (3) The Investment Club's accounts must be approved by the directors and signed on their behalf by at least one of their number.
      (4) Within 4 months of the end of the financial year the accounts for that year must be:
      a. prepared and approved by the directors;
      b. examined and reported on by the Investment Club's auditors in accordance with these Regulations and any rules made by the QFC Authority, such auditors' report to be written in the English language; and
      c. laid before a meeting of the Members together with a copy of the auditors' report.
      (5) The Investment Club must file with the CRO within 21 days after the meeting of the Members before which the accounts and auditor's report were laid, a copy of the accounts and auditor's report.
      (6) In this Section 11, reference to "accounts" are to those accounts prepared in accordance with this Article.
      Derived (as from 20th December 2016).

    • Article 80 - Provision of Copy of Accounts to Members

      (1) Any Member of an Investment Club is entitled, on demand and without charge, to be furnished with a copy of the Investment Club's latest audited accounts and auditor's report.
      (2) An Investment Club must comply with such a request within 7 days.
      (3) If an Investment Club fails to comply with Article 80(2), the Investment Club and every Officer is in contravention of these Regulations.
      Derived (as from 20th December 2016).

    • Article 81 - Publication of Accounts

      An Investment Club is not required to publish its accounts. If the accounts are published, the Investment Club must ensure that the published accounts are audited and accompanied by a copy of the auditors' report.

      Derived (as from 20th December 2016).

    • Article 82 - Qualification of Auditor

      (1) An Investment Club's auditor must be an individual auditor or firm of auditors qualified to act as auditors in the QFC and approved by the QFC Authority to act as auditors for Investment Clubs and other Companies and other Entities incorporated or registered in the QFC and entered in a register of approved auditors which must be maintained by the CRO.
      (2) An auditor shall be regarded as qualified and approved by the QFC Authority to act as an auditor in the QFC and shall be entitled to be entered in the register maintained by the CRO if that auditor meets the criteria for approval set out in rules made by the QFC Authority.
      (3) Entry of an auditor or firm of auditors in the register of auditors shall be without prejudice to any rules concerning auditors made by the Regulatory Authority pursuant to the Financial Services Regulations.
      Derived (as from 20th December 2016).

    • Article 83 - Appointment and Removal of Auditor

      (1) An Investment Club must appoint one or more auditors or a firm of auditors who must examine and report on the Investment Club's accounts in accordance with these Regulations. Except as provided for in Article 83(6) and Article 85(4) the Investment Club must give notice in writing to the CRO within 21 days of the first appointment and any subsequent change in auditor on the Prescribed Form together with the Prescribed Fee.
      (2) No person shall be appointed as auditor of an Investment Club who is an Officer or employee of that Investment Club or of an Affiliated Company or who is a partner, employer or employee of any such Officer or employee.
      (3) The directors of an Investment Club must appoint the auditor of that Investment Club for its first financial year. In subsequent financial years, an Investment Club must at its annual general meeting appoint an auditor to hold office from the conclusion of that meeting to the conclusion of the next annual general meeting. The directors or the Members of the Investment Club in general meeting may fill any vacancy in the office of auditor. While such a vacancy continues, any surviving or continuing auditor may continue to act.
      (4) Where for any reason no auditor is appointed, the CRO may, on the application of any Member, appoint one or more auditors to hold office until the close of the next annual general meeting.
      (5) Notwithstanding any agreement but without prejudice to the auditors' rights to compensation or damages, any auditor of an Investment Club may be removed by an Ordinary Resolution.
      (6) The Investment Club must as soon as reasonably practicable and in any event not later than 7 days after the passing of the Ordinary Resolution referred to in Article 83(5) file a copy of the Ordinary Resolution with the CRO in the Prescribed Form together with the Prescribed Fee.
      Derived (as from 20th December 2016).

    • Article 84 - Remuneration of Auditor

      (1) The remuneration of an auditor of an Investment Club appointed by the Members must be fixed by the Members in general meeting or by the directors, if they are authorised to do so by the Members, and the remuneration of the auditor appointed by the directors must be fixed by the directors.
      (2) Where one or more auditors are appointed by the CRO under Article 83, the CRO must also fix the remuneration to be paid by the Investment Club for its or their services.
      (3) There must be stated in a note to an Investment Club's audited accounts the amount of the remuneration of the Investment Club's auditors in their capacity as such.
      Derived (as from 20th December 2016).

    • Article 85 - Resignation of an Auditor

      (1) An auditor of an Investment Club may resign from office by depositing a notice in writing to that effect at the Investment Club's registered office, and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.
      (2) When an auditor ceases for any reason to hold office the auditor must deposit at the Investment Club's registered office:
      a. a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the notice of the Members or creditors of the Investment Club; or
      b. if he considers that there are no such circumstances a statement that there are none.
      (3) Where a statement under this Article 85 falls within Article 85(2)(a), the Investment Club must within 21 days send a copy of the statement to each director and Member of the Investment Club.
      (4) The Investment Club must as soon as reasonably practicable and in any event not later than 7 days after the deposit of notice of resignation at its registered office, file a copy of the notice with the CRO in the Prescribed Form together with the Prescribed Fee.
      Derived (as from 20th December 2016).

    • Article 86 - Auditor's Report to Investment Club

      (1) An Investment Club's auditor must make a report to the Investment Club's Members on the accounts examined by the auditor.
      (2) The auditor's report must state:
      a. whether in the auditor's opinion the accounts have been properly prepared in accordance with these Regulations;
      b. in particular, whether the accounts have been prepared in accordance with accounting principles and standards referred to in Article 79(2); and
      c. any other matter or opinion required under these Regulations or rules made by the Regulatory Authority under the Financial Services Regulations.
      Derived (as from 20th December 2016).

    • Article 87 - Powers and Duties of Auditor

      (1) An Investment Club's auditor must, in preparing a report in relation to the accounts of the Investment Club, carry out such investigations as will enable the auditor to form an opinion as to the following matters:
      a. whether proper accounting Records have been kept by the Investment Club and proper returns adequate for the audit have been received from offices or branches of the Investment Club not visited by the auditor;
      b. whether the Investment Club's accounts are in agreement with such accounting Records and returns;
      c. whether the Investment Club's accounts have been prepared in compliance with applicable accounting principles and standards; and
      d. independently validate that the Investment Club is conducting its activities and confirm that the activities are being carried out in accordance with the scope of its licence.
      (2) If the auditor is of the opinion that proper accounting Records have not been kept, or that proper returns adequate for the audit have not been received from offices or branches not visited by the auditor, or if the accounts are not in agreement with the accounting Records and returns, or that the accounts do not comply with accounting principles and standards, the auditor must state that fact in his report made under Article 86.
      (3) The auditor must have a right of access at all reasonable times to an Investment Club's accounting and other books and Records and is entitled to require from an Investment Club's Officers such information or explanation that the auditor considers necessary for the performance of his duties.
      (4) If the auditor fails to obtain all the information and explanations which, to the best of the auditor's knowledge and belief, are necessary for the purposes of the audit, the auditor must state that fact in his report made under Article 86.
      (5) Every auditor is entitled to receive notice of, and attend, any meeting of Members and to be heard on any part of the business of the meeting which concerns the auditor.
      Derived (as from 20th December 2016).

    • Article 88 - Auditor's Right to Information

      An Investment Club, and any Member, Officer, employee or agent of the Investment Club, must not knowingly or recklessly make to the Investment Club's auditor a statement (whether written or oral) which conveys or purports to convey any information or explanation which the auditor requires, or is entitled to require, as auditor of the Investment Club and is false, misleading or deceptive in a material particular.

      Derived (as from 20th December 2016).

    • Article 89 - Obstruction of Auditor

      (1) An Investment Club, or any Officer of an Investment Club, or any person acting under the direction or authority of such an Investment Club or Officer, must not engage in conduct, including without limitation the:
      a. destruction or concealment of Documents;
      b. coercion, manipulation, misleading, or influencing of the auditor;
      c. failure to provide access to information or Documents specified by the auditor; or
      d. failure to give any information or explanation which the person is able to give where the Investment Club, Officer or other person knows or ought to have known that such conduct could, if successful, have the effect referred to in Article 89(2).
      (2) For the purposes of Article 89(1), the effect referred to in this paragraph is:
      a. to obstruct the auditor in the exercise of any powers under these Regulations; or
      b. to result in the rendering of the accounts of the Investment Club or the auditor's report materially misleading.
      Derived (as from 20th December 2016).