COLL 4.2.4 Duty of Independent Entity to Report Certain Breaches of Law etc—All QFC Schemes

(1) This rule applies if the independent entity of a QFC scheme becomes aware that the operator or any other person has breached, or suspects on reasonable grounds that the operator or any other person may have breached or may be about to breach, in relation to the scheme any provision of these rules, any other law of the QFC or the law of any other jurisdiction.

Note Breach and jurisdiction are defined in the glossary.
(2) The independent entity must immediately tell the operator in writing about the breach.
(3) Subrule (4) applies if—
(a) the independent entity is of the opinion that the operator has not taken, or does not propose to take, appropriate action in relation to the breach; and
(b) the breach—
(i) is of a provision mentioned in rule 4.2.3 (1) (Oversight functions of independent entity—all QFC schemes); or
(ii) has had, or is likely to have, a material adverse effect on the scheme or the interests of unitholders.
(4) If this subrule applies, the independent entity must tell the Regulatory Authority about the breach immediately, but within 1 business day.


See examples to rule 4.1.4 (2) on the meaning of 'within 1 business day'.
(5) The independent entity must give the Regulatory Authority any information about the breach that the authority reasonably requires.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)