# The Local Government Pension Scheme Regulations 1995, Regulation L8: Fund managers


(1) In this Part “investment manager” means—
(a) a person who is authorised under the Financial Services Act 1986 and entitled by virtue of that authorisation to manager the assets of occupational pension schemes;
(b) a person—
(i) who does not transact investment business (within the meaning of that Act) from a permanent place of business maintained by him in the United Kingdom;
(ii) whose head office is situated in a member State other than the United Kingdom;
(iii) who is recognised by the law of that member State as a national of that or another member State; and
(iv) who is for the time being authorised under that law to engage in one or more of the activities falling within Part II of Schedule 1 to that Act, and is not precluded by that law from managing the assets of occupational pension schemes or assets belonging to another person; or
(c) a person who is a European institution carrying on home-regulated investment business in the United Kingdom.
(2) Instead of managing and investing fund money on their own behalf, an administering authority may, subject to the following provisions, appoint one or more investment managers to manage and invest it on their behalf.
(3) An administering authority may only appoint as an investment manager a person who—
(a) they reasonably believe is suitably qualified by his ability in and practical experience of financial matters to make investment decisions on their behalf, and
(b) is not an employee of that authority.
(4) An administering authority may only make such an appointment if—
(a) they have considered the value of the fund money to be managed by the investment manager or, as the case may be, by each of the investment managers to be appointed;
(b) they have taken proper advice; and
(c) they are satisfied, having regard—
(i) to the desirability of securing diversification of the management of the fund, and
(ii) to the value of the assets of the fund, that it will not be excessive.
(5) The terms of an appointment under paragraph (2) shall—
(a) provide for the appointment to be terminable by the administering authority giving not more than one month’s notice;
(b) require the investment manager to provide the administering authority at least once every three months with a report setting out the action he has taken under the appointment;
(c) require the investment manager to comply with such instructions as the administering authority may give;
(d) require the investment manager to have regard—
(i) to the need for diversification of investments of fund money, and
(ii) to the suitability of investments of any description of investment which he proposes to make, and of any investment proposed as an investment of that description; and
(e) prohibit the investment manager from making investments which would contravene regulation L6;
and in determining those terms an administering authority shall have regard to proper advice.
(6) Where an authority have made an appointment under paragraph (2) they shall—
(a) at least once every three months review the investments made by the investment manager; and
(b) from time to time consider the desirability of continuing or terminating the appointment.
(7) In exercising their functions under paragraph (6), an administering authority shall have regard to proper advice and—
(a) to the need for diversification of investments of fund money; and
(b) to the suitability of investments of any description of investment which the investment manager has made and of any investment made as an investment of that description.
(8) In this regulation—
“home-regulated investment business” and “European institution” have the same meaning as in the Banking Coordination (Second Council Directive) Regulations 1992; and
“proper advice” and “investment” have the same meaning as in regulation L5.

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Source: https://www.legislation.gov.uk/uksi/1995/1019/regulation/L8 (the official version)
Page: https://openlegislation.uk/local-government-pension-scheme-regulations-1995/regulation-L8
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.