Regulatory Disclosures


UK Stewardship Code

Under Rule 2.2.3R of the Financial Conduct Authority’s Conduct of Business Sourcebook, Sabre Fund Management Limited (the “Firm”) is required to disclose the nature of its commitment to the UK Financial Reporting Council’s Stewardship Code (the “Code”) or, where it does not commit to the Code, its alternative investment strategy.

The Code is a voluntary code and sets out a number of principles relating to engagement by investors with UK equity issuers.

The seven principles of the Code are that institutional investors should:

However, given the nature of its investment strategy the Firm does not actively engage with UK listed investee companies. Consequently, while the Firm supports the general objectives of the Code, the provisions of the Code are not relevant to the type of trading currently undertaken by the Firm. If the Firm’s investment strategy changes so that the provisions of the Code become relevant, the Firm will amend this disclosure accordingly.

PILLAR 3 DISCLOSURE AND POLICY

 REGULATORY CONTEXT

Sabre Fund Management Limited (“the Firm”) is regulated by the Financial Conduct Authority and falls within the scope of the Capital Requirements Directive (“the Directive”) of the European Union which has been implemented in the United Kingdom through the Prudential Sourcebook for Banks, Building Societies and Investment Firms.

The Directive consists of three “Pillars”:

This document is designed to meet the Firm’s Pillar 3 obligations and will be updated annually as at the Firm’s Accounting Reference Date of 31 December. The Firm is permitted to omit certain disclosures if they are deemed immaterial such that their omission would be unlikely to influence the decision of a reader relying on the information. No such omissions have been made from this statement.

Pillar 1

The Firm’s activities are such that it is within the scope of the Directive as a “BIPRU € 50,000 Limited Licence Firm” and that its capital requirement is the greater of:

The Firm’s market risk is limited to the foreign exchange risk arsing from foreign currency debtors and bank balances and its credit risk is limited to fees receivable from funds under management.

It is the experience of the Firm that both the base capital requirement and the sum of market and credit risks are less than the Fixed Overhead Requirement and so this is the Firms minimum capital requirement.

Pillar 2

The Firm carries out an Internal Capital Adequacy Assessment Process (“ICAAP”) in order to determine whether any additional capital is required in order to meet the risks which the Firm faces.

The main categories of risk faced by the Firm and its policies for dealing with them are as follows:

Business Risk

The Firm’s risk appetite and its willingness to accept business risk are evaluated by the Directors. The risk management function is discussed at meetings of the Board of Directors and the Board have decided to adopt a low appetite for risk.

The principal business risk is that the Firm will generate insufficient revenue and this is mitigated by constant monitoring of financial forecasts to assess the impact on the business of falling revenue.

Credit Risk

The Firm is exposed to credit risk from two sources:

Credit risks are judged not to be material as fees due from clients have always been settled promptly and debts are closely monitored as part of the accounting function. All bank deposits are held on short term with international banks and credit ratings are constantly monitored.

Market Risk

The Firm does not trade on its own account and so Market risk is limited to the Firm’s exposure to foreign currency rate fluctuations due to income being received in currencies other than sterling. Foreign exchange risk is assessed as low as exposure is monitored daily as part of the accounting function and if a material foreign currency exposure were to arise then an appropriate currency hedge would be entered in to.

Operational Risk

Operational risk is the risk of loss arising from inadequate or failed internal processes, people and systems or from external events, including legal risk. The directors are responsible for the day to day running of the business and have instituted procedures for monitoring and mitigating operational risk that are appropriate to the size and complexity of the business including appropriate staff training and regular meetings of the Firm’s Risk Committee.

Remuneration

The Firm is a Proportionality Level 3 Firm for the purposes of the Financial Conduct Authority Remuneration Code. The Board of Directors determine the level of salaries and bonuses based on the Firm’s profitability and its assessment of individual performance. All remuneration as disclosed in the Financial Statements is derived from the Firm’s sole activity of investment management.

Regulatory Capital

A summary of the capital resources of the Firm as at 31 December 2016 is as set out below:

£000

Tier 1 capital                                                                       1,446
Tier 2 capital                                                                              0
Tier 3 capital                                                                              0
Deductions from tier 1 and tier 2 capital                                575
Total capital resources after deductions                                871

As at 31 December 2016 the Firm’s Pillar 1 capital requirement was its Fixed Overhead Requirement of £359,469 as this exceeds both the base capital requirement and the aggregate of the Firm’s credit and market risks. Having assessed the risks faced by the Firm the Directors believe that no additional capital is required over and above the Pillar 1 capital requirement.

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