1.  The Manager should establish a system to monitor compliance with its compliance policies and procedures.

1.  Appropriate surveillance will vary with the nature of the Manager’s activities and the characteristics of the fund, but should include review of records or other documentation produced in the ordinary course of business that can be useful in assessing the Manager’s compliance with its policies.

2.  Non-compliance with the policies or procedures described in the various parts of the compliance framework should be reviewed and handled promptly and conclusively.

2.  To this end, policies and procedures may provide for the following:

• non-compliance with the code of ethics or compliance manual should be internally reported to the Chief Compliance Officer according to the reporting procedures stated in these documents; and
• disciplinary responsibility generally lies with senior management.

3.  The Manager’s compliance framework, including compliance policies and procedures, should be reviewed at least annually to assess its effectiveness. A more frequent review of aspects of the compliance framework is appropriate upon the occurrence of events that necessitate more immediate changes.

3. Each component of the compliance framework should be reviewed by the Chief Compliance Officer in light of significant changes and factors relevant to the Manager’s business, such as:

• legislative and regulatory developments;
• changes in business practices;
• variations in the Manager’s strategies and products;
• the growth of the Manager’s business; and
• employee conduct.