Lessons learnt from first SAQ and SR filings
Regulated funds have been completing their first self-assessment questionnaire (SAQ) and separate report (SR) filings in recent months. Mike Delano of PwC and Philippe Ringard of JP Morgan Asset Management looked at what lessons can be learnt, from the perspective of auditors and ManCos.
Don’t forget the fundamental details, was an early piece of advice, particularly making sure the organisation knows who has access to the CSSF’s e-Desk platform, which is now the only way to make filings of the SAQ, SR and management letter. “Filing is a responsibility of the board, but a director does not need to perform the process,” he said. Philippe said several individuals at JPM have super user access, typically individuals from the compliance or board management teams.
Regarding filing, Mike recommended having effective processes in place. “Some boards run this process in a similar fashion to how they complete financial statements,” he said. Hence, have a timeline featuring who is going to do what and when. Philippe agreed. “We treat it like a project, where the officers in charge of each stage know what is expected of them, and that all this is well documented,” he said. Keeping an audit trail is important as this would save a lot of time when the auditors perform their testing and if the CSSF comes for an inspection.
The first time through this process can take considerable effort. “There are a number of questions that take work to understand, even if the answers appear to be a relatively simple yes or no,” said Mike. “You have to be sure you have the relevant policies or procedures in place.” These need to be checked, the board has to be comfortable with the supporting documentation, and changes made if necessary. On a brighter note, the system allows many of the previous year’s answers to be copied, even if boards still have to ensure the answers remain valid.
Yet sometimes the correct and regulatory compliant answer to a question will be “no”. “There are levels of ‘no’ answers,” said Mike. “The CSSF is looking to understand market practices around certain topics, so if you're not doing something think about it from an organisational perspective about whether this practice needs to be in place” He also warned that SAQs and SRs where every answer is “yes” is probably a red flag to the CSSF, just as a large number of “noes” would be.
The session also featured some reminders to best practice. When a fund uses a third party, the board must know who has taken responsibility. Before pushing the button in e-Desk make sure everybody is comfortable with the report, because the filing is hard to undo or correct.