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Key documents - Coggle Diagram
Key documents
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Administration agreement
Due to the significant cost and responsibility incumbent on the administrator, key terms of this agreement will be made available to investors
Whilst unlikely to be disclosed, a service level agreement may also be entered into with the administrator to ensure that key tasks are completed within acceptable timeframes and within acceptable margins of error
It is essential that the administrator performs certain of its functions within acceptable timeframes, eg where the NAV is critical to completion of financial statements or the pricing of further issues or redemptions of shares/units in the fund, it is imperative that they are completed within a set timeline or those processes relain upon the NAV may be unreasonably delayed
Other functions may be less time critical but the fund principals may wish for them to be completed within certain timeframes to assist in the orderly management of the fund. Eg the timeliness with which information should be made available to board members (i.e board packs and minutes) which is essential in the interest of good governance
Acceptable margins of error should be documented in order to assist in appraising the performance of the administrator from time to time. Delays and errors will occur as that is human nature but the administrator must be clear as to when such delays and errors will cease to be acceptable, whether by their scale or the frequency with which they occur
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Adherence agreement
In respect of LPs and unit trusts, each investor must also become a party to the overarching entity agreement, either the LPA or trust deed
This is achieved through the execution of a deed of adherence through which the investor agrees to be bound by the terms of the overarching legal agreement
IMA / IAA
Any agreements with investment professionals will be scrutinised by the regulator and any listing authority as well as by investors who will wish to understand the terms against which the fund manager will act
As a material document, pertinent terms of the agreement will be replicated in the offering document however the full agreement may also be made available to investors whether on demand or though the availability of inspection at given premises
Statutory document
Dependent upon the legal form adopted, the articles of association, trust deed or limited partnership agreement must be provided to the investor as it forms the legal mechanism through which an investor may acknowledge and exercise his rights
Custodian agreement
Where a custodian is appointed, pertinent terms of that agreement will be replicated within the offering document, typically those relating to the exact nature of the responsibility assumed and how the custodian will be remunerated for it