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Of course, this was not what [[CIMA]] meant at all, and there followed a hasty “[[reverse ferret]]”. But in that fascinating way of modern life, wherein it will no longer do to just admit to a cock-up and fix it properly,websites were updated, correspondence reissued, and the guidance was ''clarified''. “For the purposes of Rule 5.5,” the [[amended]] circular carried on, “the following shall not in itself, constitute the financing of the Service Providers own operations: | Of course, this was not what [[CIMA]] meant at all, and there followed a hasty “[[reverse ferret]]”. But in that fascinating way of modern life, wherein it will no longer do to just admit to a cock-up and fix it properly,websites were updated, correspondence reissued, and the guidance was ''clarified''. “For the purposes of Rule 5.5,” the [[amended]] circular carried on, “the following shall not in itself, constitute the financing of the Service Providers own operations: | ||
:''{{ | :''{{helvetica|use or transfer of assets as consented to [[by or on behalf of]] the Fund, [[provided]] that the possibility of use or transfer is disclosed ... to investors.}}'' | ||
Thus, a contractually binding right of [[rehypothecation]], provided it is disclosed, is okay. To reach this conclusion, one must assemble the logical components of Rules 5.5, 5.6 and 5.6.5 into a single juridical proposition. It runs like so: | Thus, a contractually binding right of [[rehypothecation]], provided it is disclosed, is okay. To reach this conclusion, one must assemble the logical components of Rules 5.5, 5.6 and 5.6.5 into a single juridical proposition. It runs like so: | ||
:''{{helvetica|A Fund must not allow its Service Providers to use the Portfolio to finance their own operations. However, allowing Service Providers to use the Portfolio to finance their own operations doesn’t count as “financing the Service Providers’ own operations” as long as the Fund tells its investors they are doing this.}} | :''{{helvetica|A Fund must not allow its Service Providers to use the Portfolio to finance their own operations. However, allowing Service Providers to use the Portfolio to finance their own operations doesn’t count as “financing the Service Providers’ own operations” as long as the Fund tells its investors they are doing this.}}'' | ||
In world more apt to admit its own mistakes, this might read, “a fund must tell its investors when it allows its Service Providers to use any of its assets to finance their own operations.” But then we wouldn’t have much to write about if the world was like that, would we? | In world more apt to admit its own mistakes, this might read, “a fund must tell its investors when it allows its Service Providers to use any of its assets to finance their own operations.” But then we wouldn’t have much to write about if the world was like that, would we? | ||