Explanatory Notes for Completion of Investment Audited Financial Statements and Compliance Returns (Licensee) – Form 142 (February 2025)

Summary

This document is GFSC guidance explaining how licensees conducting investment business should complete Form 142, the Investment Audited Financial Statements and Compliance Returns. It does not create new regulatory requirements itself but clarifies how to answer specific questions on the form and what supporting documents to upload, noting that inaccurate submissions can attract penalties under the Financial Services Commission (Fees and Administrative Penalties) Regulations, 2023.

• Audited financial statements: Upload the final signed statements for the correct entity; accurately flag whether the audit opinion is qualified, adverse or otherwise modified, and whether an Emphasis of Matter paragraph is present; upload any ISA 260 (or equivalent) communication to those charged with governance.
• Financial information: Report income, expenditure (including bonuses and directors' remuneration), profit/loss, assets, equity and capital adequacy figures (financial resources and liquidity) taken directly from the financial statements, with zero entered where another regulatory regime takes precedence under the Capital Adequacy Rules.
• Compliance section: Report the number of regulatory breaches during the period and total complaints consistent with the complaints register, and consider client money arrangements with reference to the Commission's Client Money thematic report.
• Statistical reporting: Report figures such as POI regulated schemes serviced, Gross and Net Assets Under Regulated Activity (GAURA/NAURA), assets under management and fees from top clients, staff numbers, client numbers and stockbroking turnover, applying the Commission's rules to avoid double-counting (e.g. between administered licensees, subsidiaries/SPVs, and fiduciary reporting).

An appendix illustrates how GAURA/NAURA should be split between a Designated Administrator and the General Partner or manager it administers, so that regulated asset values are not counted twice across related Form 142 filings.

Key obligations

• Licensees must ensure Form 142 questions are answered accurately and supporting documents uploaded are correct, legible and for the correct period
• Licensees must accurately indicate whether the auditor's opinion is qualified, adverse or otherwise modified, cross-checked against the uploaded audited financial statements
• Licensees must accurately indicate whether the auditor's report contains an Emphasis of Matter paragraph, even if the wording seems standard or insignificant
• Licensees must upload the auditor's ISA 260 (or equivalent) communication to those charged with governance, distinct from the management representation letter
• Licensees must ensure reported complaints statistics are consistent with the uploaded complaints register
• Licensees must calculate GAURA/NAURA figures avoiding double-counting across subsidiaries/SPVs, administered licensees, and fiduciary-reported assets, per the methodology in the Appendix

Applies to

Investment licensees (Category 1 and Category 2 controlled investment business), Designated Administrators, General Partners or managers administered by another licensee, POI regulated collective investment schemes' service providers