Shires Income PLC
Alternative Investment Fund Managers Directive
Pre-investment Disclosure Document
Article 23 AIFMD/Rule 3.2 FCA FUND Sourcebook
15 December 2023
Shires Income PLC
This document is issued by abrdn Fund Managers Limited as the alternative investment fund manager of Shires Income PLC, in order to make certain information available to prospective investors prior to such investors' investment in the Company, in accordance with the requirements of the FCA FUND Sourcebook implementing the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 in the United Kingdom and is being made available on the Company's website: www.shiresincome.co.uk.
Defined terms used in this pre-investment disclosure document can be found in section 20 below.
1. A Description of the Investment Strategy, Policy and Objective of the Company, Types of Assets the Company May Invest In, Investment Techniques and Investment Restrictions
Investment Objective
The Company's investment objective is to provide shareholders with a high level of income, together with the
potential for growth of both income and capital, from a diversified portfolio substantially invested in UK equities but also in preference shares, convertibles and other fixed income securities.
Investment Policy
In pursuit of its objective, the Company's policy is to invest principally in the ordinary shares of UK quoted
companies, and in preference shares, convertibles and other fixed income securities with above average yields.
The Company generates income primarily from ordinary shares, preference shares, convertibles and other fixed income securities. It also generates income by writing call and put options on shares owned, or shares the Company would like to own. By doing so, the Company generates premium income.
Risk Diversification
In order to ensure adequate diversification, the Board sets absolute limits on maximum holdings and exposures in the portfolio from time to time. These limits do not form part of the investment policy and can be changed or
overridden with Board approval. The current limits are disclosed under the heading "Board Investment Limits"
below.
Gearing
The Directors are responsible for determining the gearing strategy of the Company. Gearing is used with the intention of enhancing long-term returns. Gearing is subject to a maximum equity gearing level of 35% of net assets at the time of drawdown. Any borrowing, except for short-term liquidity purposes, is used for investment purposes.
Further information about the Company's investment strategy, policy and objective, the types of assets in which the Company may invest, the investment techniques and any investment restrictions is contained in the Annual Report which is available on the Company's website: www.shiresincome.co.uk.
Sustainable Finance Disclosure Regulation
The Manager integrates sustainability risks and opportunities into its research, analysis and investment decision- making processes. The AIFM believes that the consideration of sustainability risks and opportunities can have a material impact on long-term returns for investors. The Company is managed using an investment process integrating environmental, social and governance ("ESG") factors but does not promote ESG characteristics or have specific sustainable investment objectives. This means that whilst ESG factors and risks are considered, they may or may not impact portfolio construction. The Manager's ESG integration requires, in addition to its inclusion in the investment decision making process, appropriate monitoring of sustainability considerations in risk management, portfolio monitoring, engagement and stewardship activities. The Manager also engages with policymakers on ESG and stewardship matters. Combining the integration of sustainability risks and opportunities with broader monitoring and engagement activities may affect the value of investments and therefore returns. Furthermore, investments within the Company's portfolio do not take into account the EU Taxonomy criteria for environmentally sustainable economic activities. Further information on the Manager's ESG integration approaches by asset classes can be found on its website.
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2. Principal Risks and Uncertainties
The Board carries out a regular review of the risk environment in which the Company operates, changes to that environment and to individual risks. The Board also identifies emerging risks which might impact on the Company. During the year, the most significant risks were inflation and increasing interest rates and the resultant volatility that this created in global stock markets. In addition, the conflict in Ukraine has created geo-political uncertainty which has further increased market risk premia and volatility.
There are a number of other risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has carried out a robust assessment of the Company's principal and emerging risks, which include those that would threaten its business model, future performance, solvency, liquidity or reputation and has endeavoured to find means of mitigating those risks, wherever practical.
The principal risks and uncertainties faced by the Company are reviewed by the Audit Committee in the form of a risk matrix. The assessment of risks and their mitigation continues to be an area of significant focus for the Audit Committee.
The Board also regularly identifies and evaluates newly emerging risks, for example the impact of climate change, and monitors these closely, as appropriate for the Company. The impact of climate change is not considered to be material to the financial statements as the entire investment portfolio consists of listed equities and preference shares and the market price is expected to reflect market participants' view of climate change risk.
The principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below.
Description | Mitigating Actions |
Strategic objectives and | The Board formally reviews the Company's objectives and strategies for |
investment policy - a lack of | achieving them on an annual basis, or more regularly if appropriate. |
demand for the Company's | The Board is cognisant of the importance of regular communication with |
shares due to its objectives | shareholders and knowledge of what encourages investment in the |
becoming unattractive to | Company. Directors attend meetings with shareholders where practical, host |
investors, or a negative | the Annual General Meeting as a forum for shareholder contact and regularly |
perception of investment trusts, | discuss shareholder investment behaviour with the Manager, including trends |
could result in a widening of the | on investment platforms and shareholder themes. The Board reviews |
discount of the share price to its | shareholder feedback through reports provided by the Manager's Investor |
underlying NAV and a fall in the | Relations team and also receives feedback from the Company's Stockbroker. |
value of its shares. | |
The Board and Manager keep the level of discount under constant review, as | |
well as changes to the Company's shareholder register. | |
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Description | Mitigating Actions | |
Investment performance - | The Board meets the Manager on a regular basis and keeps investment | |
performance of the portfolio | performance under close review. This includes performance attribution by | |
when measured against the | sector and stock, and liquidity analysis, as well as the degree of | |
benchmark. | diversification in the portfolio and income sustainability through examination | |
of forward income projections. | ||
Representatives of the Investment Manager attend all Board meetings and a | ||
detailed formal appraisal of the abrdn Group is carried out annually by the | ||
Management Engagement Committee. | ||
The Board sets, and monitors, the investment restrictions and guidelines, and | ||
receives regular reports which include performance reporting on the | ||
implementation of the investment policy, the investment process, risk | ||
management and application of the guidelines. | ||
Investment risk within the portfolio is managed in four ways: | ||
· | Adherence by the Investment Manager to the investment process in order | |
to minimise investments in poor quality companies and/or overpaying for | ||
investments. | ||
· | Diversification of investment - seeking to invest in a wide variety of | |
companies with strong balance sheets and the earnings power to pay | ||
increasing dividends. In addition, investments are diversified by sector in | ||
order to reduce the risk of a single large exposure. The Company invests | ||
mainly in equities and preference shares. | ||
· | Adherence by the Investment Manager to the investment limits set by the | |
Board | ||
· | Examination of changes to the portfolio and emerging investment themes, | |
including relative to benchmark constituents. |
Investment in UK smaller companies
In order to gain exposure to a higher growth sector, rather than holding a number of smaller companies' shares, the Company invests indirectly into this part of the equity market through one holding in abrdn Smaller Companies Income Trust plc, which is also managed by the Manager. Given its size (representing 7.8% of the Company's portfolio as at 31 March 2023) the Directors regularly review this holding, including its liquidity. All of the directors of abrdn Smaller Companies Income Trust plc are independent of Shires Income plc. The Manager does not charge any management fee in respect of the amount of the Company's assets attributable to this holding.
Investment in preference shares
The Company has longstanding holdings in a number of preference shares with no fixed redemption dates (representing 21.6% of the Company's portfolio as at 31 March 2023). The Directors regularly review these investments, which are held primarily to enhance the income generation of the Company. By their nature, their price movements will be subject to a number of factors, including prevailing and changing interest rates, and, in normal market conditions, will tend to respond less to pricing movements in equity markets. Issue sizes of these preference shares are normally relatively small and with associated low secondary market liquidity by comparison with the equity component of the portfolio. The Board also considers the long-term nature of these investments and the impact of any potential changes on duration on the portfolio and its returns, as well as the sustainability of the dividends paid.
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Description | Mitigating Actions |
Failure to maintain, and grow | The Directors review detailed income forecasts at each Board meeting and |
the dividend over the longer | discuss the Investment Manager's outlook for dividends. The Company has |
term - the level of the | revenue reserves which it can draw upon should there be a shortfall in |
Company's dividends and future | revenue returns in a year, and also has the ability to pay dividends from |
dividend growth will depend on | realised capital reserves. The Board regularly reviews forward net revenue |
the performance of the | projections and takes into account revenue reserves in setting quarterly |
underlying portfolio. | dividend levels. |
Share price and shareholder | The Board monitors the Company's Ordinary share price relative to the NAV |
relations - the adoption of an | per share and keeps the level of premium or discount at which the |
inappropriate marketing | Company's shares trade under review. The Board also keeps the investment |
strategy, failure to address | objective and policy under review and holds an annual strategy meeting |
shareholder concerns or other | where it reviews investor relations reports and updates from the Manager and |
factors, including the setting of | the Company's Stockbroker. |
an unattractive strategic | |
investment proposition, | The Directors are updated at each Board meeting on the composition of, and |
changing investor sentiment and | any movements in, the shareholder register, which is retail investor |
investment underperformance, | dominated. The Board annually agrees a marketing and communications |
may lead to a decrease in | programme and budget with the Manager, and receives updates regularly on |
demand for the Company's | both marketing and investor relations. |
shares and a widening of the | |
difference between the share | The Board has a close focus on investor platform activity which has been the |
price and the NAV per share. | dominant change over recent years in how retail investors choose to acquire |
and hold their shares. This includes contact with the platform operators | |
through the Manager. | |
Gearing - a fall in the value of | The Board sets the gearing limits within which the Investment Manager can |
the Company's investment | operate. Gearing levels and compliance with loan covenants are monitored |
portfolio could be exacerbated | on an ongoing basis by the Manager and at regular Board meetings, or |
by the impact of gearing. It could | between scheduled Board meetings if required. In the event of a possible |
also result in a breach of loan | impending covenant breach, appropriate action would be taken to reduce |
covenants and the forced sale | borrowing levels. The financial covenants attached to the Company's |
of investments. | borrowings currently provide for significant headroom. The maximum equity |
gearing level is 35% of net assets at the time of drawdown, which constrains | |
the amount of gearing that can be invested in equities which are more volatile | |
than the fixed interest part of the portfolio. The use of gearing has been an | |
important facilitator of the income returns from the portfolio, particularly in | |
financing the high yield preference share proportion of the portfolio which has | |
historically provided significant dividend income for the Company. | |
The Company's gearing includes a revolving credit facility which can be | |
reduced without any significant financial penalties for early repayment and at | |
relatively short notice. | |
Accounting and financial | At each Board meeting, the Board reviews management accounts and |
reporting - inadequate controls | receives a report from the Administrator, detailing any breaches during the |
over financial record keeping | period under review. The Company's annual financial statements are audited. |
and forecasting could result in | The Audit Committee receives bi-annual compliance and internal reports from |
inaccurate financial reporting, | the Manager and meets a representative from its Internal Audit team on at |
the Company being unable to | least an annual basis and discusses any findings and recommendations |
meet its financial obligations or | relevant to the Company. |
inability to pay a dividend, | |
losses to the Company and | |
impact its ability to continue | |
trading as a going concern. | |
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Description | Mitigating Actions |
Regulatory and governance - | The Board and Manager monitor changes in government policy and |
failure to comply with relevant | legislation which may have an impact on the Company, and the Audit |
laws and regulations could result | Committee monitors compliance with regulations by reviewing internal control |
in fines, loss of reputation and | reports from the Manager. There is also a regular review of adherence to |
potentially loss of an | governance guidelines that affect investment companies and how the |
advantageous tax regime. | Company is meeting existing or proposed guidelines. |
The Board is kept aware of proposed changes to laws and regulations, | |
considers the changes and applies them as appropriate, if they are not | |
already being met. | |
From time to time the Board employs external advisers to advise on specific | |
regulatory and governance matters. | |
Operational - the Company is | The Board receives reports from the Manager on its internal controls and risk |
dependent on third parties for | management processes and receives assurances from the Manager and all |
the provision of all systems and | its other significant service providers on at least an annual basis, including on |
services (in particular, those of | matters relating to operational resilience and cyber security. Written |
the abrdn Group) and any | agreements are in place with all third party service providers. The Manager |
control failures and gaps in their | monitors closely the control environments and quality of services provided by |
systems and services, including | third parties, including those of the Depositary and Custodian, through service |
in relation to cyber security, | level agreements, regular meetings and key performance indicators. |
could result in a loss or damage | |
to the Company. |
Exogenous risks such as health, social, financial, economic, climate and geopolitical - the financial impact of such risks, associated with the portfolio or the Company itself, could result in losses to the Company.
At any given time, the Company has sufficient cash resources to meet its operating requirements. In common with most commercial operations, exogenous risks over which the Company has no control are always a risk. The Company does what it can to address these risks where possible and to try and meet the Company's investment objectives.
The Board is supportive of the Investment Manager's approach to environmental, social and governance ("ESG") risks and welcomes its active engagement with company management. Through this activity, the Investment Manager aims to identify and manage the exposure to such risks over time. The Investment Manager's Approach to ESG Matters is included on pages 35 to 39 of the Annual Report.
The financial and economic risks associated with the Company include market risk, liquidity risk and credit risk, all of which the Investment Manager seeks to mitigate. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 18 to the financial statements.
Sustainability Risk - applying ESG and sustainability criteria in the investment process may result in the exclusion of assets in which the Company might otherwise invest. This may have a positive or negative impact on performance and may mean that the Company's performance profile differs to that of comparable funds in the market with a similar investment strategy but without applying ESG or sustainability criteria. Furthermore, the lack of common or harmonised definitions and labels regarding ESG and sustainability criteria may result in different approaches by managers when evaluating investments from an ESG aspect.
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3. Risk Management Systems
The directors of abrdn Fund Managers Limited collectively assume responsibility for aFML's obligations under the AIFMD including monitoring the Company's risk profile during the year.
aFML, as a fully integrated member of the abrdn plc group of companies, receives a variety of services and support in the conduct of its business activities from the resources of the abrdn Group. aFML conducts its risk oversight, including in the conduct of its risk oversight function, through the operation of the abrdn Group's risk management processes and systems. Further details of the abrdn Group's risk management programme and systems are set out in the Appendix to this document.
4. Leverage
Leverage limits
The maximum leverage which the Manager is entitled to employ on behalf of the Company (expressed as a ratio to total assets) is:
Commitment Method | 2.0x |
Gross Method | 2.5x |
Types of leverage
Although leverage is often used as another term for gearing, under the AIFMD regulations leverage is expressed as a ratio of the exposure of debt, non-sterling currency, equity or currency hedging and derivatives exposure against the net asset value. It defines two types of leverage, the gross method and the commitment method. These are essentially the same other than the commitment method allows derivative instruments to be netted off to reflect 'netting' or 'hedging arrangements'. Non-sterling cash is deemed to carry a currency exposure so is considered to be leverage. In accordance with the AIFMD the Company is obliged to disclose the maximum expected leverage levels under both methods and this is disclosed above. In order to comply with the AIFMD the maximum leverage levels have been set in accordance with the maximum gearing allowable by the Company's Articles of Association. However, the day-to-day management of gearing and leverage levels will be conducted within the tighter limits set by the Company's investment policy.
Leverage may be applied to the portfolio by utilising financial gearing (such as bank borrowings and overdrafts) and synthetic gearing (through derivatives and/or other non-fully funded instruments or techniques for efficient portfolio management purposes such as stock-lending). Typically, leverage will arise through the use of index futures, forward foreign exchange contracts or contracts for difference, where cash is paid to the counterparty as a margin against the current mark-to-market value of the derivative contract; as a result, depending on the type of instrument, a relatively small movement in the price of a contract may result in a profit or a loss which is high in proportion to the amount of funds actually placed as initial margin and may even result in further loss exceeding any margin deposited. The use of leverage therefore creates additional risks and may significantly increase the market and counterparty risk of the Company through non-fully funded exposure to underlying markets or securities. Leverage is considered in terms of the Company's overall 'exposure' to financial or synthetic gearing and includes any method by which the exposure of the Company is increased whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means. aFML is required, in accordance with the AIFMD, to calculate and monitor the level of leverage of the Company, expressed as the ratio between the total exposure of the Company and its net asset value with exposure values being calculated by both the gross method and commitment method.
Exposure values under the gross method basis are calculated as the absolute value of all positions in the portfolio; this includes all eligible assets and liabilities, relevant borrowings, derivatives (converted into their equivalent underlying positions) and all other positions, even those held purely for risk reduction purposes, such as forward foreign exchange contracts held for currency hedging.
The gross method of exposure of the Company requires the calculation to:
- Include the sum of all non-derivative assets (if applicable) held at market value, plus the absolute value of all such liabilities
- Exclude cash and cash equivalents which are highly liquid investments held in the base currency of the Company, that are readily convertible to a known amount of cash, which are subject to an insignificant risk of change in value and provide a return no greater than the rate of a three month high quality bond
- Include derivative instruments which are converted into the equivalent position in their underlying assets
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- Exclude cash borrowings that remain in cash or cash equivalents and where the amounts payable are known
- Include exposures resulting from the reinvestment of cash borrowings, expressed as the higher of the market value of the investment realised or the total amount of cash borrowed
- Include positions within repurchase or reverse repurchase agreements and securities lending or borrowing or other similar arrangements as applicable
Exposure values under the commitment method basis are calculated on a similar basis but may take into account the effect of netting off instruments to reflect eligible netting and hedging arrangements on eligible assets and different treatment of certain cash and cash equivalent items in line with regulatory requirements.
The calculation of leverage assumes that a leverage ratio of 1.00:1 equates to zero leverage. A ratio of less than 1.00:1 would mean that the portfolio included uninvested cash whilst a ratio above 1.00:1 would mean that the portfolio had leverage to the ratio amount above 1.00:1.
Where the Company invests in derivatives, it may be required to post assets as collateral. To the extent that the Company posts collateral to its counterparties, the counterparties have a security interest in the collateral and may, in certain circumstances, have the right to re-use that collateral.
5. Modification of Investment Policy
In accordance with the Financial Conduct Authority's ("FCA") listing rules, any material change to the Company's investment policy will require the FCA's prior approval as well as the approval of Shareholders. In considering what is a material change the Company must have regard to the cumulative effect of any changes since Shareholders last had the opportunity to vote.
6. Contractual Relationship Between the Company and Investors, Applicable Law and the Enforcement of Judgements
The Company is incorporated as a closed ended investment company under the provisions of the Companies Act 2006 (as amended) and its Shares are listed on the premium segment of the Official List of the UK Listing Authority and traded on the London Stock Exchange.
Investors who acquire shares in the Company will do so subject to the Articles. The Articles are one of the Company's constitutional documents and contain the rights and restrictions attaching to the Company's shares. The Articles are governed by English law and may only be amended by way of a special resolution. A shareholder's liability to the Company will be limited to the value of the shares held by such shareholder.
As the Company is incorporated in England and Wales, it may not be possible for an investor located outside that jurisdiction to effect service of process upon the Company within the local jurisdiction in which that investor resides. All or a substantial portion of the assets of the Company may be located outside of the local jurisdiction in which an investor resides and, as a result, it may not be possible to satisfy a judgment against the Company in such local jurisdiction or to enforce a judgment obtained in the local jurisdiction's courts against the Company.
A number of legal instruments provide for the recognition and enforcement in England and Wales of judgments given in other states. Where no particular legal instrument applies, a judgment creditor may nevertheless have rights to seek to enforce a judgement under English law.
Details on how to invest in Shires Income PLC are set out in the Annual Report.
7. Information on the AIFM, Depositary and Service Providers
AIFM/Manager
The Company has appointed abrdn Fund Managers Limited, which is a company limited by shares and incorporated in England and Wales, as its alternative investment fund manager. The Manager is a subsidiary of abrdn plc, a company incorporated in Scotland.
The Manager is authorised and regulated by the FCA as an alternative investment fund manager. Pursuant to the Management Agreement, the Manager provides investment management services (including portfolio management), risk management services and general administrative services to the Company.
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The duties of the Manager also include (but are not limited to) the following:
- The proper valuation of the Company's assets and the calculation and publication of the Net Asset Value of the Company
- To review its delegation of the portfolio management function to the Investment Manager on an ongoing basis
- To ensure that appropriate and consistent procedures are established so that a proper and independent valuation of the assets of the Company can be performed
- To implement a risk management system to identify, measure and manage appropriately all risks relevant to the Company's investment strategies and to review this system on an annual basis
-
To ensure that a single depositary is appointed to ensure, among other things, the proper monitoring of the
Company's cash flows and the safe-keeping of the Company's assets that can be held in custody - To employ an appropriate liquidity management system
- To adopt procedures enabling it to monitor the liquidity risk of the Company and ensure that the liquidity profile of the Company's investments complies with its underlying obligations
- To use adequate and appropriate human and technical resources necessary for the proper management of the Company
- To make available an annual report for the Company no later than four months following the end of its annual accounting period
The Management Agreement may be terminated on six months' written notice by either the Company or the Manager, or immediately by either party by notice upon the insolvency or winding up of the other party or on a material breach of contract. The Company may also terminate the agreement immediately inter alia if the Manager ceases to maintain its regulatory permission to act as AIFM, or upon a change of control of the Manager or if the Company ceases to satisfy the requirements for approval as an investment trust for UK tax purposes as a result of the negligence or wilful default of the Manager.
The Manager has delegated the portfolio management of the Company to abrdn Investments Limited. Further details of the delegation arrangements are set out in paragraph 9 below.
Depositary
The Company has appointed BNP Paribas Trust Corporation UK Limited to act as its depositary. Pursuant to the Depositary Agreement, the Depositary must carry out the duties specified in AIFMD, including:
- Safekeeping of the assets of the Company
- Cash monitoring and verifying the Company's cash flows
- Oversight of the Company and the Manager, including ensuring:
- The value of the shares of the Company is calculated in accordance with applicable law and the relevant valuation procedures
- The Net Asset Value of the Company's assets is calculated in accordance with applicable law and regulation and the Articles
- The sale, issue, repurchase, redemption and cancellation of shares are carried out within usual time limits
- Income distributions take place in accordance with the Company's constitutional documentation
- All cash is booked in accounts opened with an appropriate deposit-taking institution in accordance with the provisions of AIFMD
- Custody assets are physically held in safe-keeping
- Implementing:
- Effective and proper procedures to reconcile all cash flow movements
- Appropriate procedures to identify significant cash flows particularly those which would be inconsistent with the Company's operations
- Monitoring the Company's compliance with investment limits and Leverage requirements
In carrying out such functions the Depositary must act honestly, fairly, professionally, independently and in the interests of Shareholders.
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The Depositary is liable to the Company and/or Shareholders for the loss of a financial instrument held in custody by the Depositary or a delegate, unless the Depositary is permitted to discharge, and has discharged, such liability under AIFMD and the Depositary Agreement. The Manager will inform investors of any changes with respect to the Depositary's liability for the loss of a financial instrument held in its custody. The Depositary is also liable to the Company and/or the shareholders for all other losses suffered by them as a result of the Depositary's negligent and/or intentional failure to properly fulfil its duties.
Under the Depositary Agreement, the Company has indemnified the Depositary and its delegates against certain liabilities and expenses resulting from the Depositary's performance of its obligations under the agreement or where the Depositary has acted in accordance with authorised instructions, except where (i) the Depositary is in material breach of contract, is negligent or has intentionally failed to carry out its obligations, is in wilful default or there is fraud; or (ii) any affiliate of the Depositary has been negligent, has failed to take reasonable care or has been fraudulent in connection with the services provided.
The Company, the Manager and the Depositary may terminate the Depositary Agreement at any time by giving 90 days' notice in writing. The Depositary may only be removed from office when a new depositary is appointed by the Company.
Auditor
Ernst & Young LLP has been appointed as the Company's auditor responsible for auditing the annual financial statements in accordance with auditing standards and, as appropriate, regulations, and for providing its report to the Company's shareholders in the annual report and financial statements. In addition, applicable law and regulation may require other reports to be prepared for the Company and, as the appointed auditor of the Company, the Auditor will undertake such work under the auditor service agreement between the Company and the Auditor.
Registrar
The registrar of the Company is Equiniti Limited which is responsible for keeping the register of shareholders, which may be inspected at the Registrar's office at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, during normal business hours.
Stockbroker
JPMorgan Securities Limited has been appointed as the Company's stockbroker to provide the Company with corporate broking and associated financial advisory services.
Investors' rights against service providers will vary depending on a range of factors. If the relevant service provider is an authorised person under FSMA carrying out a regulated activity with respect to the Company, then a contravention by it of a Rule contained within the FCA Handbook may in certain circumstances give rise to a claim for breach of statutory duty against that service provider by an investor who suffers loss as a result of that contravention. Investors may also be afforded certain rights against service providers by the general law.
8. Protection from Professional Liability Risks
The Manager has effective internal operational risk management policies and procedures in order to appropriately identify measure, manage and monitor operational risks, including professional liability risks, to which it is or could reasonably be exposed. These policies and procedures are subject to regular review and the operational risk management activities are performed independently as part of the risk management policy.
The management of operational risk, through the risk and control self-assessment process, is aimed at identifying risks in existing processes and improving existing controls to reduce their likelihood of failure and the impact of losses. All risks and events are facilitated via the internal risk management system, which provides a platform to facilitate the convergence of governance, risk and compliance.
The Manager is required to cover professional liability risks, such as the risk of loss of documents evidencing title of assets to the Company, and complies with such requirement by maintaining an amount of its own funds in accordance with AIFMD.
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Shires Income plc published this content on 15 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 December 2023 19:56:33 UTC.