Private OFC Operational Readiness: Custody Coordination, Governance Calendar & Reporting Hygiene (Practical Guide)
- Ivor Ngo
- Mar 16
- 3 min read
Last updated: 16 March 2026
The Open-ended Fund Company (OFC: It Is Not “Just Another Company”
Private OFCs often fail operationally because they are treated like standard companies. Because an OFC is a regulated fund vehicle, it requires "fund-grade" operational hygiene to maintain its legal and tax standing.
The Mandatory Framework:
The Investment Manager: Unlike a regular company, an OFC must appoint an SFC-licensed (or registered) Investment Manager. This is the core of the "control story."
The Custodian: Assets must be segregated. You cannot simply hold fund assets in a personal or general corporate account.
The Board of Directors: At least two individual directors, one of whom must be independent of the Custodian.
The Operational Rhythm:
Custody/Safekeeping Coordination: Ensuring the Custodian is looped into every trade and asset acquisition.
Governance Rhythm: Formal Board approvals for fund-level decisions, documented in minutes that satisfy both the SFC and the IRD.
Reporting & Audit Trails: Because OFCs are variable capital vehicles, your "share register" and "capital account" must be tracked with precision to avoid "messy" tax calculations.
The Bank Story: Banks view OFCs as "Institutional" clients. Your documentation must prove that the Manager and Custodian are actually in control.
For the legal framework and regulatory requirements, see TITUS’s OFC guide:
This post is the operations companion: how to set up the day-to-day system so it runs cleanly.
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1) Decide your key operators early (especially the custodian)
In practice, the Custodian decision is the "operational anchor" for the entire vehicle. It drives the following:
- cash movement workflows
- safekeeping and segregation mechanics (Note: Proper segregation is a statutory requirement to protect the structure from being treated as a personal piggy bank by the IRD).
- reporting and audit trail expectations
- what assets are practical to hold and how they’re evidenced
If you leave custody to “later”, you’ll end up rewriting procedures and documents.
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2) Build the governance calendar (so decisions are always evidencable)
A workable OFC governance rhythm usually includes:
- a board approval matrix (what needs board sign-off)
- scheduled board/committee meetings (monthly/quarterly)
- an approvals log for investments and cash movements
- conflicts and related-party review rules
- consistent documentation storage (minutes and resolutions)
IMSG supports corporate governance and corporate secretaryship:
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3) Bank readiness: align the story across documents and operations
For OFCs, banks and counterparties want to see a coherent picture:
- structure chart (OFC + any sub-funds + service providers)
- mandate and expected transaction flows
- who controls what (signatories and approvals)
- how custody and cash movements are controlled
- source-of-wealth/source-of-funds documentation
Typical bank onboarding timing reference:
IMSG supports bank account setup and bank review completion:
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4) Accounting, valuation rhythm and audit readiness
Operational hygiene usually means:
- consistent bookkeeping
- management accounts (monthly or quarterly)
- documented valuation approach (especially for illiquid assets)
- audit planning early (don’t wait for year-end)
- tax planning and filing based on the actual operating model
IMSG provides accounting support, audit coordination and tax advisory:
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5) Where IMSG fits vs where legal fits
IMSG (operations):
- company secretarial and annual maintenance
- accounting/audit/tax coordination
- bank onboarding support and ongoing “bank review” support
- reporting cadence and record hygiene
TITUS (legal):
- OFC legal framework and documentation
- regulatory mapping and compliance design where needed
TITUS investment funds page:
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Next step: book a quick call
If you’re considering a private OFC (or already running one and want to tighten operations), book a quick call with Vivien Chung (Director, IMSG). If legal structuring questions arise, we can bring in Michael Titus (Principal, TITUS).
Send 2–3 time slots and we’ll coordinate an online meeting:Email: comsec@imsg.com.hkWhatsapp: +852 91782759
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Disclaimer: This article is for general information only and does not constitute legal, tax or accounting advice. IMSG provides corporate services and administration and does not provide legal advice. Specific advice should be sought for your particular circumstances.
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