F57[24.—(1) (a) The F58[depositary] must enquire into the conduct of the general partners in the management of the investment limited partnership in each annual accounting period and report thereon to the limited partners.

(b) The F58[depositary]’s report shall be delivered to the general partner in good time to enable it to include a copy of the report in the Annual Report required under section 16.

(c) The F58[depositary]’s report shall state whether in the F58[depositary]’s opinion the general partner has managed the investment limited partnership in that period—

(i) in accordance with this Act or regulations made hereunder, directions of the Bank or the partnership agreement the limitations imposed on the investment and borrowing powers of the general partner and F58[depositary] by the partnership agreement or directions of the Bank, and

(ii) otherwise in accordance with the provisions of the partnership agreement and this Act,

and, if it has not done so, in what respect in which it has not done so and the steps which the F58[depositary] has taken in respect thereof.

(2) The F58[depositary] must carry out such additional duties as may be specified by the Bank by means of conditions imposed under section 7(2)(b).

(3) Unless the general partners or any one of them under the partnership agreement is authorised by the Bank under Part 2 of the European Union (Alternative Investment Fund Managers) Regulations 2013 or by the competent authority in its home Member State in accordance with Chapter II of Directive 2011/61/EC of the European Parliament and of the Council of 8 June 2011 or in its Member State of reference in accordance with that Chapter II, the F58[depositary] must—

(a) carry out the instructions of the general partner unless they conflict with this Act or regulations made hereunder, directions of the Bank or the partnership agreement;

(b) ensure that in transactions involving investment limited partnership’s assets any consideration is remitted to it within the usual time limits;

(c) ensure that an investment limited partnership’s income is applied in accordance with this Act or regulations made hereunder, directions of the Bank or the partnership agreement;

(d) ensure that the value of the interests of the partners in the investment limited partnership is calculated in accordance with this Act and the partnership agreement;

(e) ensure that contributions and withdrawals of contributions of partners’ capital are effected in accordance with the partnership agreement and the Act.

(4) Save where any of the general partners or any one of them is or are authorised as mentioned in subsection (3), any provision whether contained in the partnership agreement or in any contract with an investment limited partnership F59[or otherwise] for exempting a F60[…] general partner or auditor of an investment limited partnership from, or indemnifying him against any liability which would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to an investment limited partnership shall be void, so, however, that an investment limited partnership may indemnify any such F60[…] general partner or auditor against any liability incurred by him in defending proceedings in which judgement is given in his favour or in which he is acquitted.

F61[(4A) An investment limited partnership may purchase and maintain for any general partner or auditor of the partnership insurance in respect of any liability referred to in subsection (4).

(4B) In subsections (4) and (4A) a reference to a general partner or auditor includes a reference to any former or current general partner or auditor of an investment limited partnership.]

(5) A F58[depositary] who fails to comply with subsection (1) or (2) or any of paragraphs (a) to (e) of subsection (3) shall be guilty of an offence and shall indemnify any person who thereby suffers loss.]

F62[(6) If a partnership agreement contains a provision to the effect that a partner who fails to perform any of his obligations under, or otherwise breaches any provision of, the partnership agreement may be subject to, or suffer remedies for, or consequences of, the failure or breach that are specified in the partnership agreement or otherwise applicable under any law then those remedies or consequences shall not be unenforceable or rendered inapplicable solely on the basis that they are penal in nature.

(7) Without prejudice to the generality of subsection (6), the remedies or consequences to which that subsection applies include:

(a) reducing, eliminating or forfeiting—

(i) the partnership interest in the investment limited partnership of the partner who has failed to perform, or has breached, the obligation or provision concerned (in this subsection referred to as the "defaulting partner" (and the partners who have neither failed to perform, nor breached, the obligation or provision concerned are referred to in this subsection as the "non-defaulting partners")), or

(ii) any rights of the defaulting partner under the partnership agreement;

(b) subordinating the partnership interest in the investment limited partnership (in this subsection referred to as a "partnership interest") of the defaulting partner to the interests of non-defaulting partners;

(c) effecting a sale or forfeiture of the defaulting partner’s partnership interest;

(d) arranging for the lending by other partners or other persons to the defaulting partner of the amount necessary to meet the relevant commitment of the defaulting partner;

(e) providing for the fixing of the value of the defaulting partner’s partnership interest by means of appraisal or by the application of a formula and the redemption or sale of the defaulting partner’s partnership interest at that value.

(8) A general partner who, on the basis of a provision contained in the partnership agreement, and a failure or breach, referred in subsection (6), purports in good faith—

(a) to make a decision that a partner be subject to, or suffer remedies for, or consequences of, the failure or breach that are specified in the partnership agreement or otherwise applicable under any law,

(b) to make a decision that a partner shall not be subject to, and shall not suffer remedies for, or consequences of, the foregoing failure or breach, or shall only be subject to, or suffer, certain remedies or consequences in that behalf (in this subsection referred to as a "partial decision"), or

(c) to give effect to a decision referred to in paragraph (a) or to a partial decision and, in either case, to take the appropriate steps (if any) required to be taken for that purpose,

shall not be liable for having made any such decision nor, as the case may be, for having given effect to a decision referred to in paragraph (a) or to a partial decision or, in either case, for having taken any aforementioned steps.

(9) References in the preceding subsections to a partnership interest shall be construed as including references to any part of a partnership interest.]