NICHE Investment Management Agreement Discretionary Fund Management

Investment Management Agreement
NICHE
Discretionary Fund Management
INVESTMENT MANAGEMENT AGREEMENT
Between
ARGYLL INVESTMENT SERVICES LIMITED (“the Company”)
And
("the Client")
This Investment Management Agreement (“the Agreement”) sets out the Terms and Conditions (“the
Terms”) on which the Company will provide investment management services to the Client. Please
indicate your acceptance of them by signing and returning this Agreement.
Words implying the singular number shall include the plural, words implying the masculine shall
include the feminine and neuter and vice versa.
The Company is incorporated in Guernsey with registration number 36763. Its registered office is Suite
4, Weighbridge House, Lower Pollet, St Peter Port, Guernsey, GY1 2ND. The Company is regulated
and licensed to conduct investment business by the Guernsey Financial Services Commission ("the
Commission").
As a Guernsey regulated entity Argyll will invest in Collective Investment Schemes that are
authorised and regulated by the Commission and in other jurisdictions but that are unregulated and/
or unrecognised by the Financial Services Authority in the UK and as such these investments are
not authorised or approved for general promotion in the UK. You acknowledge that the Financial
Services Compensation Scheme will not cover such investments.
The Company will provide you with an investment management service as per the selection made in
the Application Form. The rules applicable to this service are as follows;
Discretionary Fund Management Service
Under the Discretionary Fund Management Service decisions relating to the day-to-day management
of the Client's portfolio ("the Portfolio") will be at the discretion of the Company although subject to
the investment objectives and guidelines agreed with the Client. This will include, but not be limited
to, the sale and/or purchase of investments, the determination of appropriate asset class weightings
(between, bonds, equities, alternative strategies/hedge funds and cash), the use of derivatives
(for hedging purposes only) and the establishment of an applicable currency distribution, which
may include the use of forward currency sales and/or currency-related derivatives but only for the
purpose of hedging “non-reporting currency” exposure back into the portfolio’s reporting currency.
No correspondence or communication will be entered into with the Client prior to or immediately
following the implementation of investment decisions. If required, explanations and details of the
portfolio changes will be submitted to the client with the regular valuation report.
It is important to note that because of the long term asset management policy associated with our
Discretionary Fund Management Services you should have at least a two year investment view.
Advisory Dealing Service
Under an Advisory Dealing Service, if a client is confident about managing their own portfolio but still
wants some help the Company can provide them with professional guidance to assist them with their
investment decisions. The client however takes the full responsibility for monitoring the balance and
risk of the investments made.
Execution-only Service
The Company will solely implement the Client’s investment instructions. Portfolio valuations will
be submitted on request. The Company will neither be in anyway responsible for the choice of
investments made nor be obliged to make any comment on their quality, suitability or possible
future performance.
Portfolio lending
The Company is not permitted to lend any Portfolio assets to a third party or borrow money against
such assets. In addition, the Company shall not commit the Portfolio to underwrite any issue or
offer for sale of securities or gear the portfolio notwithstanding that leverage may be employed
within underlying investments. In addition and notwithstanding the requirement not to gear the
portfolio, the Company shall be allowed, subject to any life office restrictions, to offer securities held
in the portfolio as collateral to facilitate forward currency sales undertaken to hedge “non-reporting
currency” exposure back into the portfolio’s reporting currency.
Risk warning
The value of investments and the income arising from them may go down as well as up and investors
may not get back the amounts originally invested. Fluctuation may be particularly marked in the
case of higher volatility funds and the value of an investment may fall suddenly and substantially.
Past performance is not necessarily a guide to future performance.
Joint Accounts
Where these Terms are addressed to more than one person any instruction, notice, demand,
acknowledgement or request to be given by or to the Client under them may be given by or to any
one of the parties to the account. The Company is not required to verify the authority of that person.
That person may give the Company an effective or final discharge in respect of any obligations. The
Client’s liability under or in connection with these Terms are joint and several. On the death of any
one party to the account, the Company may treat the survivor(s) as the only person(s) entitled to
the portfolio.
Trust Accounts
The Client will notify us of any changes in trustee(s) of the relevant trust and confirm that, on the basis
of competent legal advice the Client is satisfied that each party to the account has all the necessary
powers to enter into these Terms. Further any instruction, notice, demand, acknowledgement or
request to be given by or to the Client under these Terms may be given by or to any one of the
parties to the account. The Company is not required to verify the authority of that person.
Registration and Custody of Investments
The Company will arrange for its custodian or approved nominees to keep custody and control over
all the assets in the Portfolio. For these purposes the Company shall be entitled to register securities
in the name of its nominee or its custodian’s nominee provided that:
•
they are at all times designated as being beneficially owned by the Client;
•
they are retained in a separately identifiable account for the Client;
•
the custodian has confirmed to us in writing that they have no right of lien or right of retention or sale over such investments.
In Instances where the Client has requested the Company to use their preferred custodian the
Company is not obligated to do so but will use its best endeavours to ascertain whether this
can occur.
Client Money
All money which the Company, in the course of carrying on its investment business, holds for,
receives from or owes to a client ("Client Money") will be held in a separately designated account
for each client with a bank that is licensed and regulated in Guernsey, Jersey, the Isle of Man or is
authorised to carry on a banking or deposit-taking business under United Kingdom legislation or
under the law of any state which is a member of the European Union or any other state which is
within the European Economic Area or under the law of any other country or territory which may be
listed in notices issued from time to time by the Commission as an 'approved bank'.
For these purposes the Company shall be entitled to open Client Money bank accounts at an
approved bank in the name of the Company which include in their title an appropriate description
to distinguish the money from either the Company’s own money or another client’s money
provided that the bank acknowledges in writing:
a)
that all money standing to the credit of the account is held by the Company as trustee
and that the bank is not entitled to combine the account with any other account or to exercise any right of set-off or counter-claim against money in that account in respect of any sum owed to it on any other account of the Company;
b)
that interest earned on the account will be credited to the account or to an account of the same type;
c)
that the title of the account sufficiently distinguishes the account from any other
account containing money that belongs to the Company, and is in the form requested by the Company.
Contract Notes
If the request attached to this agreement is not signed, Argyll Investment Services Limited will
provide the Client with contract notes for those investments.
Statements, Valuations and Reports
The Client, unless requested otherwise, will be provided with at least six-monthly statements
comprising details of all investment transactions undertaken by the Company on the Client’s behalf,
together with a valuation of and report on the Portfolio, unless the Client advises the Company in
writing that they wish to receive these less frequently. If the Client advises the Company that he
either does not wish to receive a valuation report at all, or wishes to receive a valuation report less
frequently than annually, then the Company will, in any event, prepare a valuation report and retain
it with the Client’s records.
The Company will keep records of all business transactions for at least six years. The Client has a
right to inspect copies of any documentation or computer records relating to their transactions which
may be subject to a small fee.
Conflicts of Interest
Attention is drawn to the fact that when the Company executes a transaction on the Client's behalf
the Company, a connected company or some other person connected with the Company, may have
an interest, relationship or arrangement such as that set out below that is material or gives rise to
a conflict of interest in relation to the investment or transaction concerned and the Client expressly
agrees that the Company shall not be required to disclose it and there will be no obligation to account
for any income, gain, profit, benefit or other advantage arising. However, the Company is required
by regulation to comply with a policy of independence and disregard any such interest, relationship
or arrangement when advising or arranging transactions for its Clients.
When the Company decides on an investment or recommends an investment or executes a transaction
for its Client, the Company or one of its connected companies could, for example, be:
•
matching your transaction with that of another client by acting on his behalf as well as
the Client's;
•
buying or selling units in a mutual fund, unit trust or other collective investment scheme where the Company or a connected company is the manager, subadviser or other operator of the scheme;
•
holding a position in the investment or a related investment.
The Client also agrees that neither the Company nor any person connected with the Company owe
any duty to disclose to the Client or use for the Client’s benefit any fact, matter or thing which comes
to the notice of the Company or any person connected with the Company, or of any employee,
director, agent of the Company’s or any person so connected, in the course of providing investment
services to others or in the event that such disclosure or use would be a breach of duty or confidence
to any other person.
Fees
The Company’s portfolio management fee of 1% per annum will be deducted quarterly in arrears based
upon a percentage of the value of the Portfolio and will take account of injections and withdrawals of
funds during the period. In addition charges may include a take on commission of up to 5% of the
initial investment.
The Client will be responsible for all fees and disbursements charged by the Company’s custodian,
bankers and portfolio administrators (or any other custodian, bankers or portfolio administrators
selected by the Client) in accordance with their schedule of fees, copies of which will be supplied on
request.
In respect of the standard front end fees charged by fund managers the Company will rebate to the
Client’s account all of the introductory commissions that may be due to it and any further discount
for all Discretionary clients. The Company also reserves the right to negotiate any trail fees paid by
fund managers from their fund charges for their own account as they arise. The Company shall not
make an investment decision on the basis of obtaining trail fees.
Tax
The Client is solely responsible for the management of the Client’s affairs in relation to taxation
liabilities and the Client hereby indemnifies the Company against any liability to tax assessed on or
by reference to the Client’s Portfolio (other than tax on the Company’s overall income derived from
the fees referred to in the “Fees” paragraph above).
Confidentiality
Unless otherwise required by applicable statute, rules, practices and/or regulations or the Client’s
express authority, the Company will treat as confidential all transactions executed for the Client
and all information disclosed to the Company by the Client, which is not generally available to the
public.
Subject to statutory restrictions, the Company will notify the Client of any request for information in
relation to the Client’s Portfolio and will inform the Client of its response.
Communication
The Company shall be entitled to rely on and treat as binding any instructions that it believes to
be from the Client or their agent(s) (whether received by telephone, facsimile, electronic mail or in
writing) which it has accepted in good faith. The Company may refuse to follow instructions if, in our
opinion, compliance therewith would be contrary to any applicable law, rule, regulation, regulatory
requirement or market or code of practice or to do so would, in the Company's bona fide opinion, be
unreasonable in the circumstances.
Liability
The Company undertakes to exercise reasonable care and due diligence in fulfilling its obligations
and exercising its discretion hereunder but neither the Company nor any of its directors, agents or
employees shall be liable for any errors of judgement or fact or loss resulting from any action taken
or omitted in connection with its duties hereunder in the absence of proven fraud, gross negligence or
wilful misconduct.
Force Majeure
The Company shall not be in breach of its obligations under these Terms if there is any total or
partial failure of performance of our duties and obligations occasioned by any Act of God, fire,
act of government or state, war, civil commotion, insurrection, embargo, inability to communicate
with market makers for whatever reason, failure of any computer dealing or settlement system,
prevention from or hindrance in obtaining any energy or other supplies, labour disputes of whatever
nature or late or mistaken delivery or payment by any bank or counterparty or any other reason
beyond its control.
Notices
Notices which may or are required to be given under these Terms by either party to the other shall
be in writing and sent by facsimile, electronic mail or by prepaid first class post to the relevant party
at the address given on the Application Form or such other address as such party may specify in writing
to the other.
Telephone Calls and Visits
For discretionary clients, unless you inform the Company to the contrary, the Client hereby expressly
invites the Company from time to time to telephone or visit to discuss the portfolio and any other
investment products or services which the Company believes may be of interest to the Client. The
Company will be happy to discuss the portfolio and investment strategy with the Client at any time.
The Client agrees that the Company may make contact between the hours of 08.00 and 21.00
at the Client’s local time. The Company may make and retain recordings of telephone calls to
monitor compliance with regulation and rules of conduct and to avoid misunderstandings. Any such
recordings will remain the sole property of the Company.
Amendments
The Company may amend these Terms by sending the Client a written notice describing the relevant
amendments. Such amendments shall become effective on a date to be specified in the notice. The
Client may amend these Terms by sending the Company written notice, which shall take effect from
the date acknowledged by the Company in writing. No amendment will affect any outstanding order
or transaction or any legal rights or obligations, which may have already arisen. The Client agrees
to notify the Company immediately of any changes in their financial circumstances, investment
objectives or implications in changes of their tax status, which may be relevant to the performance
of the Company's duties under these Terms.
Dealing, Managing and Advising
Client orders, whether initiated by the Company in its discretion or requested by the Client, will be
executed in accordance with the rules set out in the Licensees (Conduct of Business) Rules, 2009
and any amendments thereof.
Termination
The Client or the Company can terminate this Agreement at any time by notification in writing. No
penalty will become due from either the Company or the Client in respect of the termination of these
Terms. Termination of the same shall not affect any outstanding order or transaction permitted under
these Terms, which may have arisen prior to the effective date of termination.
The Company shall be entitled to receive from the Client all fees, costs, charges and expenses
accrued or incurred by reason or in relation to these Terms up to the date of termination, including
any additional expenses or losses necessarily incurred in the termination of the same, including any
charges which may be incurred in arranging for the transfer of the Client's investments either to the
Client or to the Client's new investment adviser or otherwise.
Upon such termination, the Company shall, if so required, liquidate investments in the Portfolio
and transfer cash to the Client notwithstanding that, in the event that an investment cannot be
immediately liquidated either due to its normal terms of sale or redemption or due to a legitimate
suspension of trading, the Company shall be entitled in its absolute discretion to transfer ownership
of said investment/s to the Client or their designated nominee. Investments sold for this purpose
will be liquidated under the normal terms of sale or redemption applying to each investment therein
and cash proceeds will be remitted, net of all fees and costs, as directed in writing by the Client.
Prevention of Money Laundering
Guernsey is a highly regulated jurisdiction that places great emphasis on the provision of a secure
and reputable financial services industry for the protection of investors and clients. Legislation
requires that certain mandatory money laundering regulations be fulfilled. All financial services
businesses operating in Guernsey have a statutory duty to report to the Guernsey authorities the
details of any arrangement in which they are involved where they have knowledge or reasonable
suspicion that the arrangement is being used to launder the proceeds of criminal conduct. The
Company, therefore, requires certain information on potential clients, initially, and then on a periodic
basis, to ensure compliance with these regulations.
Complaints
If you have any complaint in respect of this agreement or any of the services provided by the
Company please direct your complaint to the Company’s Compliance Officer who will investigate the
nature of your complaint in accordance with the guidelines set down by the Commission.
Governing Law
These Terms shall be governed by and construed in accordance with the Law of the Island of Guernsey.
Any dispute arising from these Terms shall be subject to the non-exclusive jurisdiction of the courts
of the Island of Guernsey.
Agreement
This Agreement is a legal agreement. If you have any doubt please contact your independent financial
advisor prior to signing.
The Company reserves the right to vary the terms of the Agreement, and in the event of such
variation, the Client shall receive one month’s prior written notice.
SIGNED by the Client:
Name/s (please print):
Capacity:(if applicable)
Date:
SIGNED for and on behalf of
Argyll Investment Services Limited:
Authorised Signatory
Authorised Signatory
Date:
Request for Contract Notes to be withheld
Contract Notes
It is noted that section 10.3.2 of The Licensees (Conduct of Business) Rules, 2009, states a
licensee that effects a sale or purchase of a Category 2 controlled investment (general securities or
derivatives)* with or for a customer must ensure that the customer is sent a contract note containing
the essential details of the transaction as soon as practicable (except where the customer specifically
requests otherwise).
I acknowledge that I am entitled to receive contract notes in respect of deals in Category 2 controlled
investments (general securities or derivatives) made on my behalf by Argyll Investment Services
Limited. I hereby formally request that such notes and other documentation arising in the course of
such dealing be retained by the company and not sent to me.
SIGNED by the Client:
Name/s (please print):
Capacity:(if applicable)
Date:
*Full details can be found in Schedule 1 of the Protection of Investors (Bailiwick of Guernsey) Law, 1987,
as amended.
If the above request is not signed, Argyll Investment Services Limited will provide the Client with contract
notes but only in respect of Category 2 investments.