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Systems and processes: overview

CDC code in force: 1 August 2022

The trustees of a CDC scheme must satisfy us that it has sufficient systems and processes to run effectively in respect of administration, scheme governance and member communicationsSY1.

For us to be satisfied, we will assess three main areas:

  1. The functionality and maintenance of the IT systems used in scheme administration, governance (and we will use the same basis for assessing the IT systems used for member communications).
  2. The structures for governing the scheme.
  3. The processes for supporting the different functions to administer and govern the scheme effectively.

While we recognise that a scheme will not have started the administration work before authorisation, we will expect its systems and processes to be developed enough so they can be assessed. We will need evidence to satisfy us that there are sufficient systems and processes in place, and that they will be ready to go live at the point of authorisation.

We recognise that in some matters, trustees may rely on a third party to give them information about how a scheme will be administered. In these circumstances, while the activity itself can be delegated, accountability cannot be delegated, so the trustees must assure themselves of how the requirements are met.

The application should explain how trustees have assessed that the scheme meets the systems and processes requirements.

This could be demonstrated through independent checks, such as agreed-upon procedures, internal audits and scheme documentation, particularly in respect of the functionality and maintenance of IT systems.

If the trustees do not have access to internal expertise to assess systems and processes, the authorisation application should include evidence that the scheme has had an independent external assessment, particularly in respect of the functionality and maintenance of IT systems.

Legal reference

SY1 Sections 9(3)(d) and (e), 15 and 16 of the Act, and Regulations 13 and 14 and Schedules 4 and 5 to the Regulations