47Performance fees

47 Performance fees

A passport fund or its operator must not permit a fee to be paid by the passport fund whether to an operator or a delegate of the operator based on any returns of the passport fund or any increase in the value of any assets of the passport fund relative to a measure, unless: (a) taking into account the arrangements to manage risk of the passport fund, the basis for the fees charged has not resulted and is not likely to result in: (i) risks being taken by the operator in relation to the passport fund that are excessive, having regard to information made available to members or persons being offered an interest in the passport fund concerning the passport fund’s investment objectives and strategy and the risks that will apply to achieving it; or (ii) the passport fund’s investment objectives not being followed, to obtain or increase fees; and (b) the calculation of the fees is verified by the operator or its auditor as consistent with the agreed basis for the fee before payment and can be verified from that time for at least 5 years by the independent oversight entity or the auditor of the financial statements of the passport fund; and (c) the independent oversight entity or the entity responsible for the compliance review has during the previous 13 months stated in writing to the operator that it is not aware of any reasons to believe that the fees payable by the passport fund will result in the operator not complying with written policies and procedures for fees of the operator for the passport fund designed to ensure compliance with paragraphs (a) and (b).