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(1)In this Part “an open-ended investment company” means a collective investment scheme which satisfies both the property condition and the investment condition.
(2)The property condition is that the property belongs beneficially to, and is managed by or on behalf of, a body corporate (“BC”) having as its purpose the investment of its funds with the aim of—
(a)spreading investment risk; and
(b)giving its members the benefit of the results of the management of those funds by or on behalf of that body.
(3)The investment condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme—
(a)expect that he would be able to realize, within a period appearing to him to be reasonable, his investment in the scheme (represented, at any given time, by the value of shares in, or securities of, BC held by him as a participant in the scheme); and
(b)be satisfied that his investment would be realized on a basis calculated wholly or mainly by reference to the value of property in respect of which the scheme makes arrangements.
(4)In determining whether the investment condition is satisfied, no account is to be taken of any actual or potential redemption or repurchase of shares or securities under—
(a)Chapter VII of Part V of the M1Companies Act 1985;
(b)Chapter VII of Part VI of the M2Companies (Northern Ireland) Order 1986;
(c)corresponding provisions in force in another EEA State; or
(d)provisions in force in a country or territory other than an EEA state which the Treasury have, by order, designated as corresponding provisions.
(5)The Treasury may by order amend the definition of “an open-ended investment company” for the purposes of this Part.