ENIGMA SECURITY TRUSTEES LIMITED

Due Diligence: Operational Strategy & Procedures Assessment

Purpose of this Assessment

As part of our onboarding process into the Security Trustee, we require each PLC to complete this Due Diligence and Operational Strategy & Procedures Assessment. This assessment ensures that we have a comprehensive understanding of your company’s legal authorisations, financial position, governance framework, operational procedures, and forward-looking strategy.

Completion of this assessment is both a regulatory and fiduciary requirement, enabling Enigma Security Trustees Limited to fulfil its obligations to investors and stakeholders in line with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR 2017) and our internal AML framework.

 

Structure of the Assessment
The assessment is divided into three parts:

• Part 1: Board Resolution, Authorisations & AML Compliance – confirms that your board has formally passed the required resolutions, appointed authorised signatories, disclosed beneficial owners/directors, and provided all supporting documentation to enable Enigma Security Trustees Limited to complete its due diligence and meet its obligations under MLR 2017.

• Part 2: Due Diligence Questionnaire – gathers detailed information on your company’s financial position, management, operations, and business model.

• Part 3: Operational Strategy & Procedures Assessment – reviews governance, internal controls, risk management, and long-term strategy, including responsibilities and declarations.

 

Who Should Complete This Form
This document must be completed and signed by a Director or company secretary of the PLC, as it contains information that requires senior management confirmation.

 

Estimated Time to Complete
The assessment is designed to be thorough but straightforward. Based on experience, it should take approximately 90–120 minutes to complete, provided that supporting information and documentation are readily available.

 

Confidentiality
All information provided in this assessment will be treated as strictly confidential. It will be used solely for the purpose of fulfilling the Security Trustee’s due diligence and oversight responsibilities and will not be disclosed to any third parties except where legally or regulatorily required.

 

As part of the Operational Strategy & Procedures Assessment required by Enigma Security Trustees, the applicant PLC must complete this section in full.

This assessment forms a key element of our compliance with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR 2017), as well as our internal Anti-Money Laundering (AML) policies and procedures. It ensures that your company has:

• Passed the necessary board resolutions;
• Appointed Authorised Signatories;
• Disclosed details of Beneficial Owners (≥25%);
• Provided consent for Sanctions, PEP & Adverse Media screening;
• Confirmed Source of Funds and Source of Wealth; and
• Supplied all supporting documentation required to enable Enigma Security Trustees to complete its due diligence and fulfil its regulatory and fiduciary obligations.    

Who Must Sign This Section

• In the case of a company: two directors / company secretary
• In the case of a partnership or LLP: two partners

Board Resolution Requirement
Your board must hold a meeting and pass the resolutions required to engage with us. This must be confirmed in the Certified Board Resolution section. The board must also appoint Authorised Signatories, who will be permitted to act on behalf of the company’s account. These individuals must sign the Authorised Signatories Schedule.

Supporting Documentation Required

To complete your assessment, please provide the following documents. At the initial stage, you may submit uncertified copies so we can confirm they meet the required format.

Corporate Documents

• Memorandum and Articles of Association
• Certificate of Incorporation
• Company Extract (official registry extract listing directors, shareholders, and shareholdings; dated within the last 12 months)
• Most recent accounts/financial statements

Registered & Trading Addresses

1. Proof of registered address:

• Either a letter from the national tax authority addressed to the company at its registered office (dated within the last 12 months), OR
• A recent company extract confirming the registered office address (dated within the last 12 months.

     2. Proof of trading address (if different from registered):

• Recent business bank statement, utility bill, or lease agreement (dated within the last 3 months, addressed to the company at its principal place of business)

Ownership & Control

• Register of shareholders/partners, with identity verification for anyone holding 25% or more of shares/partnership interest
• Details of authorised signatories (name, address, date of birth) and Power of Attorney (if applicable)
  
  

Identity & Address Verification

• Photo ID (colour copy of passport or driving licence, showing full edges/corners) for all directors and shareholders holding ≥25%
• Proof of residential address for all directors and shareholders holding ≥25%

Acceptable documents: recent bank statement or utility bill (Council Tax, water, energy, landline, broadband), dated within the last 3 months

Banking Details

• Recent bank statement confirming the company’s funding account details

Certification Requirements

• For non-EU/EEA residents: all documents must be certified or notarised by a regulated professional (lawyer, accountant, financial intermediary, or notary).
• Certification must clearly show the certifier’s full name, address, occupation, date, and signature, and, where possible, include an official stamp.
• Original documents can be certified at a Post Office or by any independent professional not connected to the company or its directors.

Important: We cannot open or administer an account until all required documentation has been received and verified. Wherever possible, electronic ID verification (EID) will be used.

 

 

Alternatively, if you do not have your supporting documents to hand, you may still complete this application form and email the documents later to support@enigmatrustee.com.

Company Secretary/Director/Partner

Certify that the following resolutions were duly passed by the Directors of the Company at a meeting held on:

IT WAS RESOLVED AS FOLLOWS:

1. That the Company engage with Enigma Security Trustees Limited as its appointed Security Trustee, and that such engagement be approved on the terms required by Enigma Security Trustees Limited.

2. That each of the persons whose names and specimen signatures appear in the attached Authorised Signatories list shall be, and are hereby, jointly and severally authorised to sign any document and to give any oral or written instructions to Enigma Security Trustees Limited in connection with the trustee engagement, including (but without limitation) instructions to execute, amend, or otherwise give effect to documents and instruments required in fulfilment of the trustee relationship.

3. That the Company confirms it has:

• Passed the necessary board resolutions;
• Appointed Authorised Signatories;
• Disclosed details of Beneficial Owners (≥25%), and Directors;
• Provided consent for Sanctions, PEP & Adverse Media screening;
• Confirmed Source of Funds and Source of Wealth; and
• Supplied all supporting documentation required to enable Enigma Security Trustees Limited to complete its due diligence and fulfil its regulatory and fiduciary obligations.

 4. That these resolutions be communicated to Enigma Security Trustees Limited and shall remain in force until an amending resolution is passed and a certified copy provided to Enigma Security Trustees Limited.

Section 1

Section 2

Section 3

i) What makes your strategy unique?
ii) Describe your strategy for todays market
iii) Does your strategy account for changing market conditions? If so, how?
iv) What markets/economic environments does your bond perform best/worst in?
v) What are the strengths/weaknesses of your strategy?
vi) Does the strategy have a short, medium or long term bias?
vii) Has the trading strategy or process changed over time due to capital inflows?
viii) How often do you review the investment strategy?
ix) What are the investment criteria for each individual asset/instrument held/invested?
x) What diversification limits are applied to the bond? Are these internal or regulatory limits?
xi) What other limits are applied to the portfolio and are these "soft" or "hard"
xii) Does the bond have a target return?
xiii) What is the average holding period of instruments?
xiv) Briefly describe the outlook of the bond?
xv)Does the bond engage in stock lending or repo transactions? If so, What proportion of the fee income is passed to the bond?

Portfolio construction/Stock selection
i) Who is involved in the process?
Ii) Who contributes to strategy meetings?
Iii) Who makes key decisions?
Iv) how are position sizes determined?
v) What consideration is given to overall risk budget and risk measure?
vi) does the bond use derivatives? If so, for investment purposes or for the purposes of efficient portfolio management?
vii) Does the bond currency hedge its underlying investments, in whole or in part?

Section 4

Derivatives
i) Do you trade in OTC derivatives, If so, what types?
ii) How do you monitor and manage counterparty risk in relation to OTC derivatives, forward FX contracts and repo/Stock lending transactions?
Iii) Do you have a list of approved counterparties? If so, how are these selected and monitored?
iv) How do you monitor and measure derivatives exposure i.e commitment approach, VaR or any other measure?
v) Please describe your rationale for the approach you use in relation to measuring derivatives exposure?
vi) please provide the bonds VaR limit (if applicable)
vii) Have there been any breaches of your derivatives risk management process in the last year e.g. the bonds Vary limit or any other limits or restrictions?
viii) Describe the process for the correction of any breaches of the derivatives risk management process?

Liquidity
i) How do you measure and manage liquidity?
ii) Is there a mismatch between liquidity of the underlying assets and the bond? If so, how do you manage this? Ho do you account for it when calculating the bonds NAV?

Fixed Income
i) Please detail the risk ratings for any bonds in which the portfolio invests
ii) Please outline your process for the pricing of any illiquid bonds held with the portfolio

Costs & Charges
i) Are the costs & charges of the bond clear & transparent?
ii) Who bears the seeding/start up cost if it’s a new bond?

Section 5

Does the bond outsource any of its functions to third party providers? (herein referred to as "Third Parties")
i) Does the bond conduct ongoing reviews of the quality of the outsourced services?
ii) Who is responsible for overseeing these services performed by Third Parties?
iii) Has the bond identified any issues with the provision of the outsourced services by the Third Party? If so, How were these issues resolved?

Section 6

Section 7

Section 8

Supply Chain & Operations

Product Due Diligence

Loan Structuring

Security & Guarantees

Monitoring & Reporting

Exit Strategy

This section focuses on governance, policies, and board-level oversight. Avoid repeating operational detail already provided in Part 2.

Trustee Disclaimer

By completing this assessment, you acknowledge and agree that Enigma Security Trustees Limited acts solely in its capacity as Security Trustee and has no discretion to act, and no obligation to act, without express instructions from the noteholders.

For the avoidance of doubt:

• The Trustee is not required to take any steps without prior consultation with, and instruction from, the noteholders.
• The Trustee’s primary role is to act as the main point of contact between the noteholders and the issuer/obligor.
• The Trustee has no obligation to act independently of the noteholders, and any actions undertaken on the Trustee’s part will be chargeable in accordance with the terms of engagement.
• There are no additional regulatory responsibilities imposed upon the Trustee beyond its normal fiduciary duties, which are limited to acting in the interests of the noteholders (or taking advice from the noteholders).
• In practice, if matters arise requiring consideration or action, the Trustee will convene a meeting of the noteholders and arrange for a resolution/vote before acting.