• Systems and controls in relation to PSIAs

    • Guidance

      The requirements in IFR 5.4.2 and 5.4.3 below are in addition to and not in replacement of the requirements in GEN 3.

    • IFR 5.4.2

      An Authorised Person Managing a PSIA must ensure that its senior management establishes and maintains systems and controls that ensure that the Authorised Person is financially sound and able at all times to satisfy the specific prudential requirements arising out of Managing PSIAs.

    • IFR 5.4.3

      (a) In addition to IFR 5.2.4, an Authorised Person Managing a PSIA must set out in a written policy how it proposes to organise and control the activities that arise from Managing a PSIA and ensure that the activities undertaken by it in Managing a PSIA are conducted in accordance with Shari'a.
      (b) The policy must as a minimum address, where appropriate, the following matters:
      (i) how the interests of that Authorised Person's shareholders and its PSIA holders are safeguarded;
      (ii) how the Authorised Person will limit the exposure of PSIA holders to the Authorised Person;
      (iii) a description of the controls to ensure that the funds of the PSIA are invested in accordance with the investment guidelines agreed in the PSIA Investment Contract;
      (iv) the basis for allocating profits and losses to the PSIA holders;
      (v) the policy for making provisions and reserves and, in respect of PSIAs, to whom these provisions and reserves revert in the event of a write-off or recovery;
      (vi) the Authorised Person's policy on the prioritisation of investment of own funds and those of Unrestricted PSIA holders;
      (vii) how liquidity mismatch will be monitored;
      (viii) the basis for allocating expenses to PSIA holders; and
      (ix) how the Authorised Person will monitor the value of its own assets and the assets of PSIA holders.