Governance & Regulatory Advisory

Work that helps boards, sponsors and managers identify governance, regulatory and operational gaps in a structure and establish who is responsible for closing them. It is most useful where responsibilities are spread across several service providers and it is no longer obvious who owns what.

A fund administrator performs specific delegated operational functions. Governance advisory looks across the whole structure: oversight, allocation of responsibility, regulatory expectations, board decision-making and coordination between the parties. The administrator answers for its own scope; the adviser looks at the gaps between scopes.

At launch, and then at the points where a structure is under strain: acquisitions and disposals, service-provider changes, a change of AIFM, regulatory remediation, restructurings, complex or conflicted board matters, and preparation for a wind-down.

Yes. An adviser can provide technical analysis, project coordination and governance support without assuming the statutory responsibilities of the governing body. The decisions remain with the appointed directors or managers, and that boundary should be explicit in the engagement letter.

The delegate is responsible for performing what it agreed to perform. The fund’s governing body generally retains oversight responsibility, and delegation does not transfer it. This is why responsibilities should be mapped by name against the legal framework and the contracts, and then monitored — the common failure is not a delegate doing the wrong thing, but a function that everybody believes somebody else owns.

A comparison of what the structure is legally and contractually required to do against what it actually does. It typically surfaces unassigned responsibilities, unclear or undocumented delegations, policies that do not reflect the vehicle, overdue actions, and inconsistencies between the legal agreements and day-to-day practice.

A documented responsibility map, a list of findings prioritised by exposure, and an action plan with a named owner and a date for each item. The deliverable is intended to be usable at board level as evidence that the gaps were identified and addressed, which is the point at which it stops being an internal note and starts being useful.

Yes, and this is one of the higher-return uses of it. A pre-liquidation review identifies unresolved receivables, creditor balances, open contracts, tax matters, AML issues, bank accounts, pending filings and service-provider dependencies before the formal process begins, when they are still cheap to fix.

Yes. Engagements can be scoped around a specific transaction, regulatory issue, remediation exercise, governance review, service-provider change, fund launch or wind-down.

Yes, and it is often the substance of the mandate: coordinating boards, AIFMs, administrators, legal counsel, auditors, depositaries and banks so that responsibilities are clearly allocated and actions are actually followed through to completion.

Because each provider sees the structure through the scope of its own mandate. An independent adviser looks across all of them, which is where the gaps sit. It also means the person telling the board that something is not working is not the same person being paid to perform it.

Amana generally provides advisory services on a daily-rate basis, with the expected scope and number of days agreed with the client in advance. Before starting the engagement, Amana assesses the nature and complexity of the assignment, the amount of documentation to be reviewed, the number of entities involved and the expected level of coordination with boards, AIFMs, administrators, legal counsel and other service providers. Based on this initial assessment, an estimated number of working days and the applicable daily rate are agreed upfront, giving the client visibility over the expected cost of the engagement. If additional work becomes necessary beyond the initially agreed number of days, Amana discusses the additional scope and obtains the client’s agreement before proceeding.

Further reading: our note on advisory and consulting engagements, and on Luxembourg structure set-up.