The Principal Act is amended by the insertion of the following Part after Part VIA:

"Part VIB Conditions governing activities

General

64AA. Interpretation for Part

(1) In this Part -

'key function holder' means a person who carries out a key function specified in section 64AH;

'outsourced' has, notwithstanding section 2(1), the same meaning as it has in the Directive of 2016.

(2) Without prejudice to section 2(7), a word or expression that is used in this Part and is also used in the Directive of 2016 shall, unless the context otherwise requires, have the same meaning in this Part as it has in the Directive.

System of governance: general provisions

64AB. General governance requirements

(1) Without prejudice to any other provision of this Act, the trustees of a scheme or trust RAC shall put in place an effective system of governance which provides for sound and prudent management of the activities of that scheme or trust RAC and those trustees shall provide that such system of governance includes -

(a) an adequate and transparent organisational structure with a clear allocation and appropriate segregation of responsibilities which shall -

(i) set out the functions and activities required to manage the scheme or trust RAC, and