Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX On-site supervision of the investment funds industry in Poland. Bartłomiej Kurzeja

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX On-site supervision – legislation Inspection of management companies On-site supervision  Act on Capital Market Supervision (CMS)  Act on Investment Funds (IF)

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Entities subject to inspection (Article 226 IF) On the basis of an authorisation issued by the Chairman of the PFSA, the person named therein shall have the right to enter the premises of: o management company, o depositary, o intermediary other than management company, brokerage house and bank, which sells and redeems units in investment funds or foreign investment funds o entity commissioned by the management company to carry out its responsibilities, o entity maintaining the register of the investment fund’s unit-holders, o foreign management company, a branch of the foreign management company or a foreign fund, a company managing open-end investment funds that are registered in an EEA or OECD member state, a branch of such company or open-end investment fund registered in an EEA or OECD member state and situated in the Republic of Poland, o entity, which obtained PFSA authorisation to manage securitized debt.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection framework Inspectors PFSA Chairman PFSA authorised employees Outside experts (optional) Inspection of entity under supervision ( Article 5.1-6c, 8-15 CMS ) a third party authorized by entity under supervision to perform certain actions which fall within the scope of the PFSA supervision a third party authorized by entity under supervision to perform certain actions which fall within the scope of the PFSA supervision Head of the organisational unit of the PFSA authorises orders

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Subject, scope and inspection activities (Article 27, CMS) Subject of the inspection – „compliance of the activities or the financial situation of the inspected entity, to the extent falling within the scope of the PFSA supervision, with the provisions of the law, the rules, the terms and conditions of authorisations, the principles of fair trading or the interests of the customers” Scope of the inspection – „all or some specific issues related to the activities or the financial situation of the inspected entity” Inspection activities – carried out „to determine the actual state of affairs and document it in a reliable manner, making it possible to evaluate the correctness of the inspected entity’s activities, and in the event of any irregularities to determine the extent of such irregularities, their causes and the persons responsible for their occurrence”

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection authorisation (Article 28 CMS) Inspection authorisation shall be issued in writing by the Chairman of the Authority, who shall specify in such authorisation: o legal basis of the inspection, o designation of the inspection authority, o date and place of issue, o names and positions of the inspectors, o numbers of PFSA identity cards/personal ID of theinspectors, o name of the inspected entity, o place of the inspection, o subject and scope of the inspection, o date of commencement and the anticipated duration of the inspection, o information on the rights and obligations of the inspected entity. The authorisation shall be delivered to the inspected entity prior to the commencement of an inspection, however no later than on the date of commencement Authorisation

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection time frame (Article 29 CMS) Commencement Date on which the authorisation to carry out an inspection is submited, but not earlier than on the date of commencement specified in Authorization Duration of an inspection may not exceed 6 months Day on which the last inspection activity is performed Completion

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX The course of inspection (1) (Article 30, 32 CMS) Prior to the inspection commence inspection team, comprising at least two inspectors shall: o shall show their authorisation and a service identification card or another ID to the inspected entity, its authorised representative, its employee or a witness called. o inform the inspected entity of the rights and obligations of the inspected entity, the legal consequences of obstructing or preventing the inspection and the liability for providing misleading explanations or concealing the truth. o make a note on the authorisation document, that inspected entity has been informed of the rights and obligations. An inspection shall be carried out: o at the place where the inspected entity conducts its business, in particular at its head office or branch, o during the inspected entity’s working days and business hours.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX The course of inspection (2) (Article 32, 33 CMS) Inspectors shall have the right to: o enter the places and premises where the inspected entity conducts its busines, o inspect books, documents or other information carriers, o request inspected entity to prepare and deliver, at its own expense, copies of documents or other data carriers, o request inspected entity to provide written or oral explanations, within the timeframe specified in the request, o request inspected entity to prepare collations of data, setting an appropriate deadline for their submission, o prepare, on their own, copies of documents and other information carriers examined in the course of the inspection, o seize, having received PFSA Chairman’s order, any document or other information carrier necessary for further proceedings.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX The course of inspection (3) (Article 27, 32, 35 CMS) Inspected entity shall have the duty/obligation to: o ensure appropriate conditions for the inspectors to be able to carry out the inspection in an efficient manner, o promptly provide the inspectors with any requested books, documentation or other information carriers, o give explanations in due time, o enable the inspectors, as far as possible, to use its technical equipment to facilitate the inspection activities, o provide a locked and sealed cabinet or safe for exclusive use of inspection team or, when justified by the quantity of such materials, provide a separate, locked and sealed room with appropriate equipment. Day-to-day operations of inspected entity: o inspection activities should be carried out without significant interference with the business activities of the inspected entity, and, in particular, shall not obstruct the timely performance of its obligations to third parties. o the inspection shall not, as far as possible, interrupt the work of the inspected entity.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection findings (Article 34, 36 CMS) Inspection findings shall be made on the basis of: o documents, o explanations given by inspected entity, o data and information contained in the inspected entity’s IT systems, o representations of third parties; o other materials which may contribute to the determination of the actual state of affairs in the areas covered by the inspection. Inspection findings shall be described in an inspection report prepared in two copies, with one copy to be delivered to the inspected entity within 30 days from the inspection completion (the day on which the last inspection activity is performed, immediately preceding the preparation of the inspection report).

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection report (1) (Article 35a CMS) A report shall be drawn up after the conducted inspection. The inspection report shall include, in particular: o the name and address of the inspected entity, o specification of the organisational units covered by the inspection, o the names, surnames and functions of inspectors, o the date and number of the authorisation to conduct the inspection as well as information on its amendments, o the definition of the subject and scope of the inspection, o the date of the start and end of the inspection, o the names and surnames as well as positions of the persons making statements and providing information and explanations during the inspection,

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection report (2) (Article 35a CMS) A report shall be drawn up after the conducted inspection. The inspection report shall include, in particular: o a note on the fact that inspected entity has been informed of the rights and obligations, o a description of the inspection carried out and of factual findings, o list the documents or other information and materials on which those findings were based, o a description of irregularities found, their extent and causes, o a list of materials collected during the inspection, including the name of each, o the place and date of the inspection report, o a note on the provision of recommendations by the PFSA Chairman before the inspection has been completed*

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Inspection report (3)(Article 36 CMS) the inspection report shall be signed and initialled by the inspectors. Inspected entity: o the inspection report shall be signed and initialled by the inspected entity within 14 days from the receipt of the inspection report. Inspected entity may refuse to sign th report. o the inspected entity shall have the right to express reservations as to the inspection report within 14 days of the receipt of the inspection report. PFSA Chairman: o takes account or refuses to take account of the objections raised by the inspected entity. In the former case the inspection report shall be changed accordingly by way of a written annex, o may provide the inspected entity with a recommendation concerning removal of the irregularities identified on the basis of the inspection, within a period of no less than 14 days from the date of receipt of such recommendations.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 15 Opened part