| Supervision should seek to ensure that neither changes in the management or administrative organization of an operator, nor delegation of functions to a third party, lead to a lesser degree of investor protection than was presumed at the time of authorization. |
CIS Principle 3 already requires that the regulatory regime should impose standards of conduct and minimum eligibility on operators of CIS, including honesty, fairness and capability, while CIS Principle 4 specifies that the level of protection afforded to CIS investors should not be affected by any delegation of functions by an operator.
It is therefore important for supervision to continuously review the eligibility of an operator to ensure that protection of investors is not diminished by changes that may occur over time. This may require that any subsequent material changes with regard to the management or organization of an operator, or any delegation of functions, are laid before the regulator for, if applicable, vetting. Information regarding these aspects should be available to the regulatory authority on a continuous basis.
