Division 1 Where a financial instrument is implemented under ... points (a), (b) and (c) of the first subparagraph of Article 38(4), the funding agreement shall include the terms and conditions for making contributions from the programme to the financial instrument and shall include at least the following elements:F1F2

1. (a)

   the investment strategy or policy including implementation arrangements, financial products to be offered, final recipients targeted, and envisaged combination with grant support (as appropriate);

2. (b)

   a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

3. (c)

   the target results that the financial instrument concerned is expected to achieve to contribute to the specific objectives and results of the relevant priority;

4. (d)

   F3provisions for monitoring of the implementation of investments and of deal flows including reporting by the financial instrument to the fund of funds and/or the managing authority to ensure compliance with Article 46;

5. (e)

   audit requirements, such as minimum requirements for documentation to be kept at the level of the financial instrument F4(and at the level of the fund of funds where appropriate) , and requirements in relation to the maintenance of separate records for the different forms of support in compliance with Article 37(7) and (8) (where applicable), including provisions and requirements regarding access to documents by audit authorities F5... in order to ensure a clear audit trail, in accordance with Article 40;

6. (f)

   requirements and procedures for managing the phased contribution provided by the programme in accordance with Article 41 and for the forecast of deal flows, including requirements for fiduciary/separate accounting as set out in Article 38(6) F6...;

7. (g)

   requirements and procedures for managing interest and other gains generated as referred to in Article 43, including acceptable treasury operations/investments, and the responsibilities and liabilities of the parties concerned;

8. (h)

   provisions regarding the calculation and payment of management costs incurred or of the management fees of the financial instrument;

9. (i)

   provisions regarding the re-use of resources attributable to the F7support for rural development until the end of the eligibility period in compliance with Article 44 and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

10. (j)

    X1provisions regarding the re-use of resources attributable to the F8support for rural development after the end of the eligibility period in compliance with Article 45 and a policy regarding the exit of those resources from the financial instrument;

11. (k)

    conditions for a possible total or partial withdrawal of programme contributions from programmes to financial instruments F9, including the fund of funds where applicable;

12. (l)

    provisions to ensure that bodies implementing financial instruments manage financial instruments with independence and in accordance with the relevant professional standards, and act in the exclusive interest of the parties providing contributions to the financial instrument;

13. (m)

    provisions for the winding-up of the financial instrument.

F10In addition, where financial instruments are organised through a fund of funds, the funding agreement between the managing authority and the body that implements the fund of funds must also provide for the appraisal and selection of bodies implementing the financial instruments, including calls for expression of interest or public procurement procedures.