law of 20 December 2002 - Alfi

check the existence of those items, their amounts and their adequateaccounting treatment, as well as the consistent application of accountingprinciples.In addition, the auditor must examine the sale and purchase transactionsof securities made during the two weeks preceding and thetwo weeks following the end of the financial year (this period needs tobe extended if suspicious operations have been detected), in order todetermine whether transactions have been entered into for the purposeof “window dressing”.Furthermore, the auditor will have to collect statistics on portfolioturnover in order to make an appreciation whether transactions havebeen entered into for the purpose of “churning”.The auditor must also comment on the various items of the combinedprofit and loss account. The auditor will have to check the existence ofthose items, their amounts and their adequate accounting treatment, aswell as the consistent application of the accounting principles.During its mission, the auditor will have to pay particular attention to theperformance fee which may be payable to the investment managers.The auditor will also have to receive from the board of directors of theUCI or of the management company of the UCI confirmation to theeffect that neither the investment managers nor any of their connectedparties have received rebates from brokers and a confirmation on anyarrangements concerning the payment of “soft commissions” in thecontext of the activities of the UCI. In case “soft commissions” are paid,the auditor will have to provide in the long form report details on thearrangements in relation thereto.In addition, the auditor will need to receive from the board of directors ofthe UCI or the management company of the UCI confirmation indicatingwhether there have been any commission rebates and, in the affirmative,describe the nature thereof.Finally, the auditor will ask for a list of all costs, comprising transactioncosts, which have been attributed to the UCI. It is recommended thatthis list of costs refers where possible to the gross amount of the costsattributable to the UCI. In relation to the most significant costs, theauditor will have to determine whether they have been calculated incompliance with the provisions of the applicable agreements.In case of irregularities or shortfalls, the auditor will have to provideprecise indications enabling the CSSF to assess the situation.2.6. Publication of the NAVThe auditor shall indicate if the UCI has published its NAV in accordancewith Article 92 of the law of 30 March 1988.In case of non-compliance with this legal requirement, the auditor willindicate in detail the origin of this shortfall.3. InternetThe long form report will indicate whether the UCI makes direct use of the Internetas a communication or distribution channel.172