CIPR 5.2.2 Discretionary investment management agreements
(1) If an authorised firm proposes to manage relevant investments in an account or portfolio for a customer on a discretionary basis, it must first enter into an investment management agreement with the customer, in a durable medium, signed by both parties.
(2) The agreement must provide for the following:
(a) portfolio composition and initial value — the initial composition and value of the portfolio and its on-going composition;
(b) discretion — the extent of the firm's discretion and whether there are any restrictions or limits;
(c) valuation — the basis on which the assets being managed are to be valued;
(d) underwriting — whether the firm is permitted to commit the customer to an obligation to underwrite or sub-underwrite an issue or offer of securities and, if so, any restrictions or limits of the extent of the underwriting;
(e) borrowing — whether the firm is permitted to borrow on the customer's behalf, and, if so:
(i) the circumstances in which it may borrow;
(ii) the limits on such borrowing; and
(iii) the circumstances (if any) in which the limits can be exceeded;
(f) stock lending — whether or not the firm is permitted to undertake stock lending with or for the customer, and, if so:
(i) the assets to be lent;
(ii) the type and value of collateral from the customer; and
(iii) the method and amount of payment owing to the customer in the lending.
|Derived from QFCRA RM/2019-2 (as from 1st January 2020).|