The Individual Savings Account Regulations 1998

General investment rules U.K.

6.—(1) All transactions by way of purchase by an account manager of investments under an account shall be made—

[F1 (a) in the case of an authorised fund which is a dual priced unit trust, at the manager’s price for the sale of the relevant class of units within the meaning of, and complying with the requirements of, rule 15.4.4 of the Collective Investment Schemes Sourcebook;]

[F1 (b) in the case of an authorised fund which is a single priced unit trust or an open-ended investment company, at the price of a unit or share within the meaning of, and complying with the requirements of, rule 4.3.11 of the Collective Investment Schemes Sourcebook; and]

(c) in the case of all other account investments, at the price for which those investments might reasonably be expected to be purchased in the open market.

[F2 (1ZA) In paragraph (1)(a) and (b)—

“the Collective Investment Scheme Sourcebook” means the sourcebook of that name made by the Financial Services Authority under the Financial Services and Markets Act 2000;

“a dual priced unit trust” means an authorised unit trust in respect of which the manager gives different prices for buying and selling units at the same time;

“a single priced unit trust” means an authorised unit trust in respect of which the manager gives the same price for buying and selling units at the same time.]

(2) All other transactions by way of sale or otherwise by an account manager in investments under an account shall be made at the price for which those investments might reasonably be expected to be sold or otherwise transacted, as the case may be, in the open market.

(3) Investments, or rights in respect of investments, may not at any time—

(a) be purchased or made otherwise than out of cash which an account manager holds under an account at that time, and which has been allocated to the particular component of that account, for which those investments or rights are qualifying investments; or

(b) be purchased from—

(i) an account investor, or

(ii) the spouse of an account investor,

so as to become account investments under an account to which the account investor subscribes or has subscribed.

(4) Subject to paragraphs (5) and (6), an account investor’s cash subscription and any other cash held by an account manager under an account shall be held only in sterling and be deposited in—

(i) an account with a deposit-taker, or a deposit account or a share account with a building society, or

(ii) in the case where the account manager is [F3 the Director of Savings], an account with [F3 the Director of Savings],

which is designated as an ISA account for the purposes of these Regulations only.

(5) An account manager who is a European institution, a relevant authorised person or an assurance undertaking may hold an account investor’s cash subscription and other cash held under an account in the currency of the EEA State in which he has his principal place of business and may deposit such cash in an account, which is designated as mentioned in paragraph (4), with any person authorised under the law of that State to accept deposits.

(6) Cash by way of dividends, interest, distributions, and other rights or proceeds in respect of qualifying investments for any component shall at all times be recorded and accounted for separately from that for any other component, and may be invested only—

(a) in qualifying investments for the same component; or

(b) by way of cash deposit in accordance with paragraphs (4) and (5).

Textual Amendments

F1 Reg. 6(1)(a)(b) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), arts. 1(2)(b), 171(2)

F2 Reg. 6(1ZA) inserted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), arts. 1(2)(b), 171(3)

F3 Words in reg. 6(4)(ii) substituted (6.4.1999) by The Individual Savings Account (Amendment) Regulations 1998 (S.I. 1998/3174), regs. 1, 4