Regulation on the Delegation of Functions by a UCITS Fund Management Company - Unofficial Consolidated Text (NN, Nos. 108/16 and 41/17)

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UNOFFICIAL CONSOLIDATED TEXT NN 108/16 of 23.11.2016. NN 41/17 of 27.04.2017. (effective from 01.05.2017.) CROATIAN AGENCY FOR FINANCIAL SERVICES SUPERVISION Pursuant to Article 69(6) of the Open-Ended Investment Funds with Public Offering Act (»Narodne novine« No. 44/2016, hereinafter: the Act), the Croatian Agency for Financial Services Supervision (hereinafter: the Agency) at its Management Board meeting held on 18 November 2016 adopted the

PRAVILNIK O DELEGIRANJU POSLOVA DRUŠTVA ZA UPRAVLJANJE UCITS FONDOM -> REGULATION ON THE DELEGATION OF FUNCTIONS BY A UCITS FUND MANAGEMENT COMPANY

INTRODUCTORY PROVISIONS Article 1. This Regulation prescribes the procedure for delegation of functions to third parties by a UCITS fund management company (hereinafter: the Company) and the content of the delegation agreement.

DELEGATION OF FUNCTIONS TO THIRD PARTIES Agency Approval Article 2. (1) For the delegation of functions to third parties, the Company is required, pursuant to Article 69(1) of the Act, to obtain prior approval from the Agency. (2) For the purpose of obtaining approval for delegating functions to a third party, the Company shall submit an application to the Agency accompanied by the following documentation:

1. a draft delegation agreement pursuant to Article 4(1) of this Regulation, which contains a provision for the agreement to be concluded subject to a suspensive condition of obtaining Agency approval, and after conclusion, the signed delegation agreement by authorized persons of the contracting parties.
2. an explanation of the reasons for delegating functions and the justification for such delegation,
3. a description of identified risks related to the delegation of functions pursuant to Article 7(1) of this Regulation and their impact on the Company, with an assessment of their magnitude,
4. an analysis of service providers pursuant to Article 7(2) of this Regulation,
5. a description of the manner in which the third party is connected to the Company, if the third party is an affiliated entity of the Company,
6. a declaration by the Company and the third party that they will take all necessary measures to prevent, monitor, and manage conflicts of interest regarding the delegated functions,
7. other documentation upon request by the Agency. (3) If the third party has its registered office and/or operates outside the Republic of Croatia, and is not a supervised entity by an authorized supervisory authority of a Member State or is a third party from a country with which the Agency has not concluded an agreement on mutual cooperation, then the Company is required, in addition to the documents from paragraph 2 of this Article, to submit evidence confirming that the legislation of the country or countries in which the third party operates allows the Agency:
8. to conduct direct supervision of a part of the third party's operations that is related or can be linked to the delegated functions, as well as direct supervision of the performance of activities subject to the agreement,
9. timely and unrestricted access to documentation and data related to the delegated functions that are in possession of the third party. (4) In the event that after obtaining Agency approval, the conditions of the agreement pursuant to Article 4(1) of this Regulation are amended in part relating to the description of functions delegated, or if the Company wishes to reduce its requirements regarding the level and quality of performance of delegated functions, or if the conditions for termination or cancellation of the agreement are changed, the Company shall without delay submit a new application to the Agency for the issuance of approval for delegation of functions in accordance with paragraph 1 of this Article. In such cases, the Agency shall assess whether it is necessary to attach all or only specific documentation from paragraph 2 of this Article with the application. (5) In the event that after obtaining Agency approval, the conditions of the agreement pursuant to Article 4(1) of this Regulation are amended in part relating to the information on which UCITS funds the functions are delegated, the Company is required to notify the Agency of the resulting amendments. (6) The Company may submit the documentation prescribed by this Article to the Agency in the manner and in accordance with the Technical Instruction for using the web form entry service and submission of documentation in electronic form, and the Instruction for completing web forms for management companies. (7) The Company is deemed to have submitted the documentation prescribed by this Article at the moment when the documentation is recorded on the server for sending such documentation.

Notification of Delegation Article 3. (1) Regarding the delegation of other functions to third parties, the Company shall priorly notify the Agency pursuant to Article 69(2) of the Act. (2) The Company shall attach to the notification from paragraph 1 of this Article, along with the