Decree No. 341 / 2012 Coll.
Declaration on the scope of the activities of the depositary of the Participating Fund
Valid
Order
Effective from 01.01.2013
341
DECLARATION
of 21 September 2012
on the scope of the activities of the depositary of the participant fund
The Czech National Bank provides, pursuant to § 110 (1) of Act No. 426 / 2011 Coll., on Pension Savings, for implementation of § 39 (3) and § 41 (6) of the Pension Savings Act and under § 170 (1) of Act No. 427 / 2011 Coll., on Supplementary Pension Savings, for implementation of § 89 (3) and § 91 (6) of the Additional Pension Savings Act:
Subject matter
(1) This decree regulates the scope of the activities of the depositary of the Participating Fund (hereinafter referred to as "the depositary of the Fund ') in respect of:
(a) custody of assets in the participating fund;
(b) checking the assets held in the participating fund in cases where the nature of the case excludes the disposal of the assets;
(c) the registration of funds in accounts in the participating fund;
(d) control of the crediting and depreciation of pension units of a participating fund (hereinafter referred to as the "pension unit");
(e) checking the calculation of the actual value of the pension unit;
(f) settlement of transactions in the participating fund within the normal time limit;
(g) checking the management of the assets in the participating fund;
(h) checking the valuation procedure for assets and liabilities in the participating fund;
(i) checks on the payment of benefits; and
(j) control of the calculation of the remuneration for the management of the assets in the participating fund.
(2) Furthermore, this decree
(a) define the conduct of the pension company which is the reason for not executing the order by the depositary of the Fund; and
(b) regulates cases where the depositary of the Fund may carry out the activity referred to in paragraph 1 through another person (hereinafter referred to as outsourcing).
Deposits of assets in the participating fund
[K § 89 (1) (a) of the supplementary pension savings law]
The depository of assets in the participating fund shall ensure that:
(a) the book-entry securities registered in the central register of securities (1) shall be kept in the owner's account in the central register of securities; other investment vehicles, where their nature so permits, shall be kept in separate records (2) or in a separate register; and
(b) other property, if its nature so permits, shall be physically taken over for safekeeping or shall ensure its safekeeping through outsourcing.
Control of assets in the participating fund
[K § 89 (1) (a) and (b) of the supplementary pension savings law]
(1) The depositary of the Fund shall verify the appropriate value and nature of the assets which cannot be entrusted in the custody provided for in Article 2, at least by:
(a) continuously checks the status in the register where the controlled property is kept; and
(b) compares information from a pension company with information from its own registers.
(2) Where, on the basis of the information obtained pursuant to paragraph 1, the depositary of the Fund is not able to reliably establish the current status of the assets, it shall verify the status of the assets at least once a year by on-the-spot check or by any other appropriate procedure; they shall verify the state of the property whenever, for any reason, there is doubt as to the accuracy or completeness of the information provided by the pension company.
(3) The depositary of the Fund may also carry out the checks referred to in paragraphs 1 and 2 through outsourcing.
Accounting of funds in accounts of a pension company and a participating fund
[K § 89 (1) (b) of the supplementary pension savings law]
The depositary of the Fund shall, on the basis of the records it keeps, monitor the movement of the funds of the Participant Fund in the accounts referred to in Article 89 (1) (b) of the Supplementary Pension Savings Act at least by verifying on a working day basis whether the amount of money credited to the account of the Participant, the employer's contributions, the State contributions and the funds transferred from another Participant Fund or the Transformed Fund is equal to the sum of the amounts credited to that day to the accounts of all Participating Funds managed by the Pension Society.
Control of the crediting and depreciation of pension units
[K § 89 (1) (c) and (j) of the supplementary pension savings law]
(1) The depositary of the Fund shall carry out a check on the crediting of pension units at least by verifying that the number of pension units credited by the pension company is equal to the proportion of the total amount paid for them on the account of the participating fund held by the depositary and the actual value of the pension unit declared for the relevant date.
(2) In addition, the depositary of the Fund shall examine whether the number of pension units corresponding to payments in the relevant period has been credited to the account of the Participating Fund for each participant in the supplementary pension savings scheme. The depositary of the Fund shall take into account the current value of these pension units on the relevant date. Such checks may also be carried out by checking a representative sample of participants, the representativeness of which shall be verified by the depositary of the Fund once a month.
(3) A check on the depreciation of pension units, the payment of benefits and the transfer of funds by a participant shall be carried out by the depositary of the Fund in the context of the control of payments provided for in Section 9. Financial settlement shall be carried out by the depositary of the Fund on the basis of the instructions of the pension company in the manner specified in the Statute of the Participating Fund (hereinafter referred to as "Fund Statute ') and under an agreement between the Pension Company and the Participant.
Control of the calculation of the current value of the pension unit
[K § 89 (1) (d) and (i) of the supplementary pension savings law]
The depositary of the fund shall carry out a check on the calculation of the actual value of the pension unit each time before publication of this value (3) by verifying the accuracy of the data on this value submitted by the pension company. Verification of the value of the fund's equity shall be carried out by the depositary of the Fund on the basis of data from sources independent of the pension companies normally used by qualified investors in their activities; in the absence of such resources, the depositary of the Fund shall base itself on the supporting documents of the pension company.
Securing settlement of assets in the participating fund within the normal time limit
[K § 89 (1) (f) of the Supplementary Pension Savings Act]
The settlement of transactions in the participating fund shall be ensured by the depositary of the fund within the normal time limit by:
(a) allow the disposal of assets in the participating fund which it has in custody or the handling of which is required by its consent; and
(b) check that the remuneration is paid by a third party within normal time limits.
Control of the management of assets in the participating fund
[K § 89 (1) (h) and (j) of the supplementary pension savings law]
(1) The depositary of the Fund shall carry out a review of the instructions of the pension company on the management of assets forming part of the assets in the participating fund (hereinafter referred to as the "control of the order"), to the extent and in the manner set out in paragraphs 2 to 5 and in Section 9 (2) and within the deadlines set out in Section 9.
(2) Where an order is issued for the acquisition of an asset in a participating fund, the depositary of the fund shall, in the context of the control of the order:
(a) checking that only the types of assets permitted under the Additional Pension Savings Act and the Fund's Statute are acquired into the assets of the Participating Fund; if the type of asset is not obvious, it shall also carry out a check on the basis of an analysis of the documentation relating to the asset concerned; and
(b) checking compliance with the investment limits under the Additional Pension Savings Act and the Fund Statute by comparing the set limits with the latest available information on the assets in the Participating Fund on the date on which the order was submitted.
(3) If it is an order to acquire or dispose of an asset, the depositary of the Fund shall, as part of an order check, carry out a check of professional care in determining the price and other conditions of trade, unless it is an anonymous transaction concluded at the transfer point referred to in Section 100 (2) (a) of the Supplementary Pension Savings Act. This check shall be carried out at least by a review of the analysis evidenced by the pension company's acquisition or disposal of the asset under the best conditions and the advantage of the market4). The scope of the review shall be in proportion to the nature of the controlled transaction at least price, potential return on the transaction, whether the transaction was negotiated under conditions more favourable or similar than those of another counterparty (comparison of competing bids), and the assessment of the quality of the counterparty (creditworthiness and credibility of the counterparty).
(4) If it is an instruction concerning techniques and instruments for the efficient management of assets, the depositary of the Fund shall, in the context of the audit of the order, carry out a check of professional care in determining the price and other conditions of trade. This check shall be carried out in particular by reviewing the analysis of the benefits of the transaction referred to in paragraph 3 and by verifying compliance with the rules on the use of techniques and tools for the efficient management of the property (5).
(5) Where an order for payment of an asset in a participating fund is not referred to in paragraphs 2 to 4, the depositary of the Fund shall, in the context of an order check, verify whether the order does not contradict the supplementary pension savings law or the fund's Statute, including professional care, in particular whether the reasons giving rise to the order are justified. A check on the merits of the order for payment, including professional care, shall be made to the extent that the purpose of the payment, its amount and whether it is a one-off or periodic payment.
(6) Where the legal order governing the management of the assets so permits, the depositary of the Fund shall agree with the pension company such arrangements of relations as to make it impossible to dispose of the assets in the participating fund without the consent of the depositary of the Fund.
[K § 89 (1) (h) and (j) of the supplementary pension savings law]
(1) The depositary of the Fund shall check the order before making the payment or other settlement of the transaction on the basis of that order. An order check after payment or other settlement of a transaction can only be performed where:
(a) the amount of the order shall not exceed CZK 500 000 until the aggregate daily value of such payments reaches 0,1% of the value of the assets in the participating fund; or
(b) the assets referred to in § 98 (1) (a), (b) and (c) and § 100 (2) (a) and (c) of the supplementary pension savings law are the subject of the transaction; and
1. the method of trading at the transfer point referred to in Section 100 (2) (a) of the supplementary pension savings law excludes the settlement of the transaction later than the day following the submission of the order; or
2. The depositary of the Fund has ensured, on the basis of an inspection by the pension company and the persons entrusted by the pension company with the management of the assets in the participating fund, in agreement with those persons during the last 12 months, that the management and control system of those persons ensures adequate control of compliance with the supplementary pension savings law, the fund's statute and the depositary's contract.
(2) The control of the orders referred to in paragraph 1 (a) may be carried out by checking a representative sample of payments within 30 days of the end of the week in which the order was issued. A representative sample of payments shall be selected by the depositary of the Fund for a period of no more than 30 preceding days.
(3) The instructions for making a payment submitted through an electronic banking system for which the depositary of the Fund carries out a pre-payment check shall be co-authorised by the depositary of the Fund. This does not apply to payments entered through automated settlement systems.
[K § 89 (1) (h) of the supplementary pension savings law]
(1) The depositary of the Fund shall ensure that the pension company submits to it every day a list of closed transactions for the account of all participating funds it manages on that day, broken down by participating fund. The depositary of the Fund shall check at least once a month that the assets have been acquired and disposed of after settlement in accordance with the lists of closed transactions provided.
(2) Paragraph 1 shall not apply where the pension company manages only the compulsory conservative fund.
[K § 89 (1) (h) of the supplementary pension savings law]
The depositary of the Fund shall carry out compliance checks
(a) limits relating to the assets in the participating fund6) at least once a month, within 15 days of the end of the previous month, according to the latest available data;
(b) the limits applicable to the issuer of securities held by the participating fund7) on the basis of the latest available information, but at least quarterly; and
(c) other limits in accordance with the supplementary pension savings law and the fund's Statute, mutatis mutandis, the nature of the limit; compliance with the quality requirements of the investment instrument or its issuer shall be checked not only when dealing with the investment instrument but also during the holding of the investment instrument, at least once a quarter.
Control of the calculation of remuneration for the management of assets in the participating fund
[K § 89 (1) (k) of the supplementary pension savings law]
The depositary of the fund shall carry out a check on the calculation of the remuneration for the management of the assets in the participating fund before any payment of such remuneration to the pension company.
Reasons for not executing the order by the depositary of the Fund
(K § 91 (6) of the supplementary pension savings law)
The reason for not carrying out an order to a pension company by a depository of the fund pursuant to § 91 (6) of the supplementary pension savings law is where:
(a) the pension company fails to remedy, in particular by giving a new order, the implementation of which will remove the deficiency arising from the original order and which can reasonably be expected to be settled; or
(b) the execution of the order would exceed the limit laid down by the Supplementary Pension Savings Act or the Fund Statute by more than 1% or the risk of damage caused by settlement of the order clearly exceeds the risk of damage associated with failure to settle it; the depositary of the Fund shall also consider, in assessing the risk of damage, the likelihood of early compensation by the pension company or the person entrusted with the pension company managing the assets of the participating fund.
Outsourcing of the depositary's activities
(Paragraph 89 (3) of the supplementary pension savings law)
(1) If this decree allows the depositary of the Fund to carry out its activities through outsourcing [§ 2 (b) and § 3 (3)], the depositary of the Fund
(a) verify that the outsourcing provider is entitled to carry out the activity;
(b) conclude a contract with the outsourcing provider according to which the outsourcing provider, depending on the nature of the case
1. Issue of assets in a participating fund or documentation relating to such assets to another person without the prior approval of the depositary of the Fund, unless it is a legal obligation and the outsourcing provider informs the depositary of the fund without delay of the issue of the assets or documentation;
2. comply with a request from the depositary of the Fund to suspend the execution of an order concerning the trust;
3. allow at any time the depositary of the Fund to take over the assets or documentation of the participating fund, if its nature so permits,
4. does not use another person for that activity, except in accordance with paragraph 2;
5. carry out the activities in question in such a way as to comply with the legislation and allow for the control carried out by the depositary.
(2) In the case of safekeeping, the contract shall determine whether and under what conditions the outsourcing provider may use other persons to carry out the activities in question; the conditions laid down in paragraph 1 shall be met.
Efficacy
This Decree shall take effect on 1 January 2013.
Governor:
Ing. Singer, Ph.D., v. r.
1) Paragraph 92 (1) of Act No. 256 / 2004 Coll., on Capital Market Business, as amended.
2) § 93 of Act No. 256 / 2004 Coll., as amended.
3) § 118 of Act No. 427 / 2011 Coll., on Supplementary Pension Savings.
4) § 54 paragraph 1 (j), (l) and (m) of Act No. 427 / 2011 Coll.
5) Sections 101 and 102 of Act No. 427 / 2011 Coll. Title II of Part Three of Decree No 117 / 2012 Coll., on a more detailed regulation of the activities of the pension company and the participating fund.
6) § 103 to 105 of Act No. 427 / 2011 Coll.
7) § 106 of Act No. 427 / 2011 Coll.
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Regulation Information
| Citation | Decree No. 341 / 2012 Coll., on the scope of the activities of the depositary of the Participating Fund |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 17.10.2012 |
|---|---|
| Effective from | 01.01.2013 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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