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Version status: In force | Document consolidation status: Assimilated law updated to reflect all known changes
Version date: 31 December 2020 - onwards
Version 2 of 2

Article 12 Professional liability risks

1. The professional liability risks to be covered pursuant to rule 11.2.1 of the Interim Prudential sourcebook for Investment Businesses shall be risks of loss or damage caused by a relevant person through the negligent performance of activities for which the AIFM has legal responsibility.

2. Professional liability risks as defined in paragraph 1 shall include, without being limited to, risks of:

(a) loss of documents evidencing title of assets of the AIF;

(b) misrepresentations or misleading statements made to the AIF or its investors;

(c) acts, errors or omissions resulting in a breach of:

(i) legal and regulatory obligations;

(ii) duty of skill and care towards the AIF and its investors;

(iii) fiduciary duties;

(iv) obligations of confidentiality;

(v) AIF rules or instruments of incorporation;

(vi) terms of appointment of the AIFM by the AIF;

(d) failure to establish, implement and maintain appropriate procedures to prevent dishonest, fraudulent or malicious acts;

(e) improperly carried out valuation of assets or calculation of unit/share prices;