Guideline 33. Operational due diligence for external fund managers | International Social Security Association (ISSA)

Introduction
Objectives of the ISSA Guidelines on Investment of Social Security Funds
Definition of Investment Governance
Investment Governance Framework: Consistency with the ISSA Guidelines on Good Governance
Structure of the ISSA Guidelines on Investment of Social Security Funds
A. Investment Governance Principles
Guideline 1. Investment beliefs
Guideline 2. Investment mission and goals
B. Investment Governance Structures
Guideline 3. Bodies and their responsibilities
Guideline 4. Fiduciary responsibilities
Guideline 5. Governance structure and organizational aspects of social security institutions
C. Common Processes
Guideline 6. Taking into account social security liabilities and funding policy in the determination of investment policy
Guideline 7. Defining the risk budget
Guideline 8. Restrictions on investments
Guideline 9. Socially responsible investing and environmental, social and corporate governance
Guideline 10. Investment assumptions
Guideline 11. Risk budget analysis and utilization
Guideline 12. Dynamic investing
Guideline 13. Strategies to rebalance risk levels
Guideline 14. Selection of appropriate benchmarks
Guideline 15. Criteria for the choice between the use of an internal investment function and the use of an external investment manager
Guideline 16. Approaches to portfolio construction
Guideline 17. Use of active, passive and hybrid management
Guideline 18. Infrastructure investment
Guideline 19. Due diligence completed on investments by an investing institution
Guideline 20. External safekeeping measures and custody of assets
Guideline 21. Valuation of the investment portfolio
Guideline 22. Performance and risk analysis monitoring and reporting
Guideline 23. Manager monitoring and evaluation
Guideline 24. Policy on disclosure
Guideline 25. Prudent person principle
D. Processes Specific to Internal and External Investment Management
D.1. Internal Investment Management
Guideline 26. Implementation of investment policies by an investing institution
Guideline 27. Operational due diligence for internal investment management
Guideline 28. Direct investment and representation on the board of companies
Guideline 29. Currency hedging
D.2. External Investment Management
Guideline 30. Selection process for external fund managers
Guideline 31. Selection due diligence for external fund managers
Guideline 32. Alignment of incentives of external fund managers and objectives of the social security institution
Guideline 33. Operational due diligence for external fund managers
Guideline 34. Transitioning of assets when there is a change in external investment manager
Acknowledgements

Sufficient procedures are put in place to ensure that an appropriate level of operational due diligence is conducted on external fund managers.

ISSA Guidelines:

Investment of Social Security Funds

ISSA Guidelines:

Investment of Social Security Funds

Investment of Social Security Funds -
Guideline 33. Operational due diligence for external fund managers

Investment of Social Security Funds - Guideline 33. Operational due diligence for external fund managers

Investment of Social Security Funds

Investment of Social Security Funds -
Guideline 33. Operational due diligence for external fund managers