7Financial resources of the operator

7 Financial resources of the operator

(1) The operator of a passport fund must at all times meet the financial resources test. (2) For this section, the operator meets the financial resources test if its equity (converted at the relevant exchange rate, where not denominated in USD) is greater than USD 1,000,000 plus additional capital amount. (3) In calculating the operator’s equity: (a) a guarantee or undertaking held by the operator may be counted as if it were an asset if, and only if, it: (i) is unconditional; and (ii) does not give rise to any liability for the operator; and (iii) is payable on demand; and (iv) is provided by a body that is subject to prudential supervision by a financial supervisory authority in the place of its incorporation which is, in the written opinion of the home regulator for the passport fund, generally largely compliant with the guidelines of the Basel Committee on Banking Supervision; and (b) the maximum amount of cover from time to time provided under an approved personal indemnity insurance policy may be counted but only up to 80% of the additional capital amount. (4) For this section:

additional capital amount means 0.001 × (total assets under management in USD converted at the relevant exchange rate minus USD 500,000,000) and is capped at USD 20,000,000 converted at the relevant exchange rate where the operator’s equity is not denominated in USD.

approved personal indemnity insurance policy means a professional indemnity insurance policy that has been approved for this section by the home regulator for the passport fund.

equity of the operator means the net equity being assets less liabilities after taking into account losses and includes any net assets reflected in adjustments for valuation or translation, as it would appear on a balance sheet prepared in accordance with the relevant accounting standards.

relevant accounting standards, for a home economy listed in the following table, has the meaning given in the following table: