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According to Guideline 60 of the EIOPA Guidelines on system of governance, the decision whether a function or activity is critical or important should be made on the basis of whether this function or activity is essential to the operation of the undertaking as it would be unable to deliver its services to policyholders without the function or activity. Within the "EIOPA Final Report on Public Consultation No. 14/017 on Guidelines on the System of Governance" in the explanatory text for Guideline 60 (paragraph 2.290) it is clarified that where functions or activities are partially outsourced it is relevant whether these outsourced parts are per se critical or important. In the explanatory text for Guideline 60 (paragraph 2.291), there is also list of examples of critical or important functions or activities which would include the investment of assets or portfolio management. Consequently a management agreement with a third party relating to the management of a part of the insurers investment portfolio (either through a segregated managed account or the purchase of a regulated investment fund) would be considered as outsourcing of a critical or important function or activity depending on the affected part of the portfolio. For example, it could be considered as not critical or important in case only a very small proportion of the undertaking's investment portfolio falls within the outsourcing agreement. The specific implementation of the outsourcing (e.g. outsourcing through a segregated managed account or the purchase of a regulated investment fund) is not directly relevant for the purpose of defining the outsourced investment management as critical or important. Nevertheless, in case of participation in an investment fund please see also Q&A 1450.