The Financial Services Act 1986 (Single Property Schemes) (Exemption) Regulations 1989

Pre-emption rights: trust based schemes

14.—(1) Subject to the provisions of paragraph (5), the terms of a trust based scheme must provide that–

(a) no units in the scheme may, after units are first issued following participation in the scheme first being promoted otherwise than in accordance with the provisions of section 76(2) of the Act or otherwise than in accordance with the provisions of regulations made under section 76(3), be issued for a consideration which consists wholly of cash unless each participant whose name appears on the register of participants at such date as may be specified in the document offering the units for issue, being a date which falls within the period of four weeks immediately preceding the date of the offer, has been offered the opportunity to acquire, on the same or more favourable terms, a proportion of the units to be issued which is as nearly as practicable equal to the proportion in value held by him of units in the scheme;

(b) no further units shall be issued unless either–

(i) a period of at least three weeks has elapsed during which the offer referred to in sub-paragraph (a) above has been open for acceptance; or

(ii) the operator has, during that period, received notice of the acceptance or refusal of the offer by every person to whom it was made; and

(c) any offer which is made in the circumstances described in sub-paragraph (a) above is made in the manner described in this regulation.

(2) Subject to the provisions of paragraph (3), the terms of a trust based scheme must provide that an offer made by virtue of the provisions described in paragraph (1) should be in writing and, except where units are held jointly by two or more participants in which case it may be to one of those participants, should be made to a participant either personally or by sending it by prepaid post to any address in the United Kingdom shown in the register in relation to that participant or, if no such address is shown, to any address in the United Kingdom notified by him to the operator as the address for the giving of notice to him.

(3) In a case in which the operator is aware that the estate of a participant has been sequestrated or that a participant has died or has become or been adjudged bankrupt, the terms of the scheme may provide that the offer may be made–

(a) by sending it by prepaid post addressed to the persons claiming to be entitled to the units in consequence of the sequestration, death or bankruptcy by name, or by the title of representatives of the deceased, or trustee or assignee of the bankrupt, or by any like description, at the address in the United Kingdom supplied for the purpose by those so claiming; or

(b) until such an address has been so supplied, by giving notice in any manner in which it might have been given if the death or bankruptcy had not occurred.

(4) In the case of a participant who has not notified the operator of an address in the United Kingdom for the service of notices on him, the terms of the scheme may provide that the offer may be made by causing it, or a notice specifying where a copy of it may be obtained or inspected, to be published in the London, Edinburgh and Belfast Gazettes.

(5) The terms of a trust based scheme may enable a majority representing at least 75% in number of the units held by participants present and voting at a meeting convened in accordance with the provisions of the trust deed to authorise the operator, either conditionally or subject to such conditions, modifications or limitations as may be specified in the authority and either generally or in relation to a particular issue, to issue units pursuant to that authority as if the scheme did not include terms of the kind described in paragraph (1)(a).