Document TIB-FRM-AM-1.0
Issued 16 April 2026
Module of TIB-FRM-1.0
Verification Module — Asset Managers
Twenty-four binding criteria for verification engagements with investment managers operating discretionary, advisory, or model-portfolio mandates across segregated accounts, mutual funds, UCITS, ICAVs, and similar structures.
© 2026 Stratinova LTD. All rights reserved.
About this module
This module (the AM Module) extends the universal TIB Integrity Standards with criteria specific to asset managers — firms managing capital on behalf of third parties under discretionary, advisory, or model-portfolio mandates. It applies to managers of segregated accounts, mutual funds, UCITS, ICAVs, regulated investment companies, and similar pooled vehicles. For pooled vehicles with hedge-fund characteristics (gating, side letters, performance fees), the Hedge-Funds Module (TIB-FRM-HF) is invoked jointly.
The module adds twenty-four binding criteria (AM-1 through AM-24) organised under eight themes: fiduciary framework, NAV production and review, valuation governance, allocation fairness, performance attribution, fees and expenses, soft commissions and inducements, and voting / corporate-action policy.
The module references widely adopted industry codes including the CFA Institute Asset Manager Code of Professional Conduct, the GIPS Standards (Global Investment Performance Standards), and IOSCO Principles 24-30 (intermediaries) and 31 (collective investment schemes).
Verification Module — Asset Managers
Twenty-four binding criteria with rationale, requirement, evidence rubric, illustrative cases, and cross-references.
Scope
This Module applies whenever the engagement covers a Firm whose activities include the discretionary, advisory, or model-portfolio management of capital for third parties.
Joint application
Where the manager runs hedge-fund-style vehicles, TIB-FRM-HF is invoked jointly. Where the manager also operates execution desks, TIB-FRM-BR may apply. Where the manager has direct custody (uncommon in most jurisdictions), TIB-FRM-CU may apply.
Out of scope
This Module does not assess investment-strategy quality, expected returns, risk-adjusted performance, or commercial fee competitiveness.
Definitions
- Mandate — an investment management arrangement governed by an investment policy statement (IPS) or equivalent.
- NAV — net asset value, the per-unit value of a pooled investment vehicle.
- IPV — independent price verification, the function checking valuation inputs against external sources independently of portfolio management.
- Composite — an aggregation of similarly mandated portfolios used for performance reporting.
- Soft Commission — arrangement under which a portion of trading commissions paid to a broker is applied by the broker to research, data, or other services for the manager.
- Inducement — any benefit (monetary or non-monetary) received by the manager from a third party in connection with services provided to clients.
Theme map
| Theme | Criteria | Universal pillar | Section |
|---|---|---|---|
| Fiduciary framework | AM-1, AM-2, AM-3 | TIB-IS.1 Governance | § 4 |
| NAV production and review | AM-4, AM-5, AM-6 | TIB-IS.5 Risk & Compliance | § 5 |
| Valuation governance | AM-7, AM-8, AM-9 | TIB-IS.5 Risk & Compliance | § 6 |
| Allocation fairness | AM-10, AM-11, AM-12 | TIB-IS.3 Execution | § 7 |
| Performance attribution | AM-13, AM-14, AM-15 | TIB-IS.6 Disclosure | § 8 |
| Fees and expenses | AM-16, AM-17, AM-18 | TIB-IS.6 Disclosure | § 9 |
| Soft commissions and inducements | AM-19, AM-20, AM-21 | TIB-IS.1 Governance / TIB-IS.6 Disclosure | § 10 |
| Voting and corporate actions | AM-22, AM-23, AM-24 | TIB-IS.1 Governance | § 11 |
Fiduciary framework
Fiduciary policy
Fiduciary duty — in whatever form the manager's jurisdiction casts it — is the foundational obligation. A written articulation forces the manager to identify what duties it owes and how it operates against them.
A written fiduciary policy shall identify the categories of duty owed to clients, the controls operating to ensure compliance, and the escalation pathway for potential breaches. The policy is reviewed at least annually.
Investment-policy compliance
An IPS sets the boundaries of what the manager can do with client capital. Compliance monitoring converts the IPS from a marketing artefact into an operating constraint.
For each managed mandate, an IPS or equivalent governs scope, restrictions, and benchmark. IPS compliance is monitored at a defined cadence (typically daily for liquid strategies, weekly for less liquid). Breaches are recorded and remediated.
Client-categorisation discipline
Where the manager serves multiple client categories (retail, professional, institutional), the basis for categorisation and the differential service standards must be documented.
Client categorisation methodology and the consequence of category for service standard, reporting, and fee transparency shall be documented and applied consistently.
NAV production and review
NAV cycle documentation
NAV is the contractual price at which subscriptions and redemptions occur. End-to-end NAV-cycle documentation is the foundation of investor trust in the price.
The NAV cycle shall be documented end-to-end: data sources, valuation inputs, validation steps, sign-off authorities, and publication mechanism. Sign-off includes a function independent of portfolio management.
NAV error handling
NAV errors are inevitable; the integrity question is whether they are detected, classified by materiality, and remediated with investor notification where warranted.
A documented threshold defines a "material" NAV error. Errors above threshold trigger investor notification and remediation per documented procedure. Materiality threshold is appropriate to the vehicle and investor category.
Administrator independence (where used)
A third-party administrator separates production of NAV from portfolio management economic interest. Where the manager produces NAV in-house, additional safeguards are needed.
Where a third-party administrator is engaged, independence is documented and refreshed annually. Where NAV is produced in-house, independent IPV (per AM-8) and oversight by a function organisationally separated from PM are required.
Valuation governance
Valuation policy
A written valuation policy converts pricing decisions into traceable, repeatable methodology. Without it, valuations are opinion.
A written valuation policy specifies methodology by instrument category, price source(s), fallback hierarchy for stale prices, and treatment of hard-to-value instruments.
Independent price verification
Pricing inputs into NAV must be checked independently of the portfolio manager whose performance is measured by NAV.
Prices used in NAV are verified independently of PM at a cadence appropriate to instrument liquidity (daily for liquid; less frequent for illiquid where market data is sparse). Discrepancies above threshold are documented and resolved.
Hard-to-value instrument governance
Illiquid or hard-to-value instruments are the highest valuation-risk area. Specific governance — methodology, tiered approval, periodic review — is required.
Hard-to-value instruments are identified, valued under a documented methodology, approved by a function independent of PM, and periodically re-tested against new market inputs.
Allocation fairness
Trade-allocation policy
When a manager runs multiple accounts, allocation of trades and partial fills must be governed by ex-ante rules to prevent favouritism among clients.
A written trade-allocation policy ensures fair allocation across managed accounts, particularly where partial fills, scarcity, or pre-trade aggregation arise. Exceptions are documented with rationale.
Cross-trade controls
Cross-trades between managed accounts can be efficient but create conflict; controls ensure pricing fairness and compliance with applicable law.
Where cross-trades between managed accounts are permitted, controls ensure pricing fairness, conflict mitigation, and compliance with Applicable Law.
IPO and limited-allocation handling
Limited-availability investments (IPOs, secondary placements, allocations from in-demand offerings) are a flashpoint for allocation favouritism.
A written policy governs allocation of limited-availability opportunities across eligible accounts. Allocation is by documented criteria (pro-rata, priority by mandate suitability) rather than discretion.
Performance attribution
Performance reporting standards
Performance is a primary marketing input; without disciplined methodology and gross/net presentation, comparability between managers is illusory.
Performance is reported gross and net of fees, with disclosed methodology (time-weighted vs money-weighted, benchmarks, currency basis). Composite performance, where reported, is constructed in accordance with a documented standard (GIPS or equivalent).
Benchmark appropriateness
A benchmark misaligned with the mandate flatters performance unhelpfully. Disclosure of the benchmark and rationale is the integrity baseline.
Benchmark is disclosed; rationale for benchmark choice is documented; benchmark changes are pre-notified and explained.
Marketing-claim substantiation
Marketing claims about performance, risk-adjusted return, or peer-group ranking must be substantiable from underlying records.
Each material marketing claim relating to performance shall be tied to underlying documentation that substantiates it. Out-of-date claims are removed.
Fees and expenses
Fee transparency
All fees and expenses charged to managed accounts must be disclosed and reconciled to invoices. Hidden expense layers materially affect realised returns.
All fees and expenses charged to managed accounts — management, performance, transaction, custody, administration — are disclosed in the IPS or offering documents and reconciled to fee invoices charged.
Expense allocation
Where a manager allocates expenses across funds or accounts, the allocation methodology must be documented and applied consistently.
Expense allocation methodology is documented; sample allocations applied per methodology; manager-borne expenses (e.g. marketing) are not charged to clients.
Performance-fee mechanics
Performance-fee structures (high-water mark, hurdles, catch-up, equalisation) materially affect investor outcomes. Disclosure and consistent application are integrity baselines.
Where performance fees apply, mechanics are disclosed including HWM basis, hurdle, catch-up, and crystallisation cadence. Sample fee calculations reconcile to client statements.
Soft commissions and inducements
Inducements policy and disclosure
Where the manager receives benefits from third parties (research, data, hospitality), the conflict and the management approach must be disclosed.
Soft commissions, research-payment arrangements, and inducements are disclosed to clients with the basis on which client funds may be applied to such payments.
Research payment governance
Where the manager pays for research from client commissions or under separate arrangements, the budgeting, allocation, and oversight must be documented.
Research-payment governance includes budgeting, periodic value assessment, and allocation between manager and client where applicable.
Gifts and hospitality
Gifts and hospitality from counterparties are routine in finance; only governance prevents them becoming inducements that distort decisions.
A documented gifts and hospitality policy with monetary thresholds, register, and approval pathway operates. Items above threshold are recorded and reviewed.
Voting and corporate actions
Voting policy
Where the manager exercises voting rights on behalf of clients, the policy and the operating mechanism must be documented.
A written policy governs proxy voting and the handling of corporate actions. Where the manager delegates voting, the delegate and oversight arrangements are disclosed.
Conflict-managed voting
Where votes affect the manager's economic interest (e.g. votes on related-party transactions), the conflict must be managed.
Conflicts in voting are identified and managed by recusal, independent reference, or disclosure to clients before vote.
Corporate-action handling
Corporate actions (rights issues, mergers, splits) require timely client-impacting decisions. The operating procedure must be documented.
Corporate-action handling is documented including notification cadence, decision authority, and audit trail.
Public Report sections
- Mandate inventory — mandate types in scope (segregated, fund, model);
- Service-provider chart — administrator, custodian, IPV provider, auditor (where consented);
- Fee summary — standard fee structure for each mandate type;
- Performance reporting standard — GIPS or alternative.
Evidence pathway
| Evidence | Source | Frequency |
|---|---|---|
| NAV cycle walkthrough | Operations team | One full cycle observed |
| IPV report | Independent valuation function | Most recent + 12-month history |
| Allocation register | OMS / EMS extracts | 30-day sample |
| Fee reconciliation | Finance / fund accounting | Quarter sample |
| Inducements register | Compliance function | Trailing 12 months |
| Voting register | Stewardship / proxy provider | Trailing 12 months |
Limitations
- TIB does not opine on investment performance or strategy quality;
- Where a third-party administrator produces NAV, TIB observations cover the manager's interaction with the administrator, not the administrator's internal controls;
- Audited financial statements remain the authoritative basis for fund accounting.
Module changelog
| Version | Effective | Approved by | Notes |
|---|---|---|---|
| TIB-FRM-AM-1.0 | 16 April 2026 | TIB Standards Committee | Initial publication. 24 binding criteria across 8 themes. |
Normative annex.
| Universal pillar | Module criteria contributing |
|---|---|
| TIB-IS.1 Governance | AM-1, AM-2, AM-3, AM-21, AM-22, AM-23 |
| TIB-IS.2 Capital & Safeguarding | (addressed in universal criteria) |
| TIB-IS.3 Order Handling & Execution | AM-10, AM-11, AM-12 |
| TIB-IS.4 Payout Integrity | (N/A for managers) |
| TIB-IS.5 Risk & Compliance | AM-4, AM-5, AM-6, AM-7, AM-8, AM-9, AM-24 |
| TIB-IS.6 Disclosure & Conduct | AM-13, AM-14, AM-15, AM-16, AM-17, AM-18, AM-19, AM-20 |
Informative annex.
| Document code | TIB-FRM-AM-1.0 |
| Issuing authority | TIB Standards Committee |
| Effective date | 16 April 2026 |
Issuing entity
Stratinova LTD
Cyprus HE475207