COLL 8.2.12 Review by Independent Entity of Operator's Pricing Controls Etc—QFC Retail Schemes

(1) This rule sets out the reviews that the independent entity of a QFC retail scheme must conduct to be satisfied that the operator has controls that are appropriate to ensure that—
(a) prices of units are calculated in accordance with this division; and
(b) the likelihood of incorrect prices is minimised.
(2) A review must extend to pricing functions that the operator has outsourced to a third party.
(3) In conducting a review, the independent entity must—
(a) thoroughly examine the operator's controls (and supporting systems) to confirm that they are appropriate; and
(b) analyse the controls (and supporting systems) to decide the extent to which reliance can be placed on them.
(4) A review must be conducted when the independent entity is appointed and afterwards as it considers appropriate given its knowledge of the robustness and stability of the operator's controls (and supporting systems).
(5) A review must be conducted more frequently if the independent entity knows or suspects that the operator's controls (or any supporting systems) are weak or otherwise unsatisfactory.
(6) In addition, the independent entity must from time to time review other aspects of the valuation of the scheme property, verifying on a sample basis, if necessary—
(a) the assets, liabilities, accruals, units in issue and securities prices (and in particular the prices of securities that are not approved securities and the basis for the valuation of unquoted securities); and

Note Approved security is defined in r 7.1.9.
(b) any other relevant matter (for example, an accumulation factor or a currency conversion factor).
(7) The independent entity must ensure that any issue identified in a review is properly followed up and resolved.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)