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The Open-Ended Investment Companies Regulations 2001

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Point in time view as at 01/04/2013.

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PART IU.K. GENERAL

U.K.

Citation, commencement and extentU.K.

1.—(1) These Regulations may be cited as the Open-Ended Investment Companies Regulations 2001.

(2) These Regulations come into force—

(a)for the purpose of regulation 6, on the day on which sections 247 and 248 of the Act come into force for the purpose of making rules;

(b)for the purposes of regulations 7, 12, 13, 18(1) and (3), 74, 77 and 80 to 82, so far as relating to the making of applications for authorisation orders to be made on or after the day mentioned in sub-paragraph (c), on the day on which section 40 of the Act comes into force;

(c)for all remaining purposes, on the day on which section 19 of the Act comes into force.

[F1(3) Except as otherwise provided, these Regulations extend to the whole of the United Kingdom.]

Textual Amendments

InterpretationU.K.

2.—(1) In these Regulations, except where the context otherwise requires—

  • “the Act" means the Financial Services and Markets Act 2000;

  • F2...

  • “the 1986 Act" means the Insolvency Act 1986 M1;

  • [F3“the 1989 Order” means the Insolvency (Northern Ireland) Order 1989;]

  • [F3“the 2006 Act” means the Companies Act 2006;]

  • “annual general meeting" has the meaning given in regulation 37(1);

  • “annual report" has the meaning given in regulation 66(1)(a);

  • “the appropriate registrar" means—

    (a)

    the registrar of companies for England and Wales if the company’s instrument of incorporation states that its head office is to be situated in England and Wales, or that it is to be situated in Wales;

    (b)

    the registrar of companies for Scotland if the company’s instrument of incorporation states that its head office is to be situated in Scotland;

    (c)

    [F4the registrar of companies for Northern Ireland if the company’s instrument of incorporation states that its head office is to be situated in Northern Ireland;]

  • “authorisation order" means an order made by the Authority under regulation 14;

  • [F5“the Authority” means the FCA;]

  • “bearer shares" has the meaning given in regulation 48;

  • F6...

  • “court", in relation to any proceedings under these Regulations involving an open-ended investment company the head office of which is situated—

    (a)

    in England and Wales [F7or Northern Ireland], means the High Court; and

    (b)

    in Scotland, means the Court of Session;

  • “depositary", in relation to an open-ended investment company, has the meaning given in regulation 5(1);

  • “the designated person" means the person designated in the company’s instrument of incorporation for the purposes of paragraph 4 of Schedule 4 to these Regulations;

  • [F8“electronic communication” has the meaning given in section 15(1) of the Electronic Communications Act 2000;]

  • “[F9FCA rules]" means any rules made by the Authority under regulation 6(1);

  • “larger denomination share" has the meaning given in regulation 45(5);

  • “officer", in relation to an open-ended investment company, includes a director or any secretary or manager;

  • [F10“open-ended investment company” means—

    (a)

    a body incorporated by virtue of regulation 3(1), or

    (b)

    a body treated as so incorporated by virtue of—

    (i)

    regulation 85(3)(a) (bodies incorporated under earlier British regulations), or

    (ii)

    Schedule 3 to the Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (transitional provisions: Northern Ireland open-ended investment companies);]

  • F6...

  • “prospectus" has the meaning given in regulation 6(2);

  • “relevant provision" means any requirement imposed by or under the Act;

  • “register of shareholders" means the register kept under paragraph 1(1) of Schedule 3 to these Regulations;

  • “scheme property", in relation to an open-ended investment company, means the property subject to the collective investment scheme constituted by the company;

  • “share certificate" has the meaning given in regulation 46(1);

  • “smaller denomination share" has the meaning given in regulation 45(5);

  • [F11“sub-fund” means a separate part of the property of an umbrella company that is pooled separately;]

  • “transfer documents" has the meaning given in paragraph 5(3) [F12and (3A)] of Schedule 4 to these Regulations;

  • F13...

  • F14...

  • “umbrella company" means an open-ended investment company whose instrument of incorporation provides for such pooling as is mentioned in section 235(3)(a) of the Act (collective investment schemes) in relation to separate parts of the scheme property and whose shareholders are entitled to exchange rights in one part for rights in another; and

  • F6...

(2) In these Regulations any reference to a shareholder of an open-ended investment company is a reference to—

(a)the person who holds the share certificate, or other documentary evidence of title relating to that share mentioned in regulation 48; and

(b)the person whose name is entered on the company’s register of shareholders in relation to any share other than a bearer share.

(3) In these Regulations, unless the contrary intention appears, expressions which are also used in [F15the Companies Acts (as defined in section 2 of the Companies Act 2006)] have the same meaning as in [F16those Acts].

Textual Amendments

Marginal Citations

PART IIU.K. FORMATION, SUPERVISION AND CONTROL

GeneralU.K.

Open-ended investment companyU.K.

3.—(1) If the Authority makes an authorisation order then, immediately upon the coming into effect of the order, the body to which the authorisation order relates is to be incorporated as an open-ended investment company (notwithstanding that, at the point of its incorporation by virtue of this paragraph, the body will not have any shareholders or property).

(2) The name of an open-ended investment company is the name mentioned in the authorisation order made in respect of the company or, if it changes its name in accordance with these Regulations and [F9FCA rules], its new name.

Textual Amendments

Registration by the AuthorityU.K.

4.—(1) Upon making an authorisation order under regulation 14, the Authority must forthwith register—

(a)the instrument of incorporation of the company;

(b)a statement of the address of the company’s head office;

(c)a statement, with respect to each person named in the application for authorisation as director of the company, of the particulars set out in regulation 13; and

(d)a statement of the corporate name and registered or principal office of the person named in the application for authorisation as the depositary of the company.

(2) In this regulation any reference to the instrument of incorporation of a company is a reference to the instrument of incorporation supplied for the purposes of regulation 14(1)(c).

Safekeeping of scheme property by depositaryU.K.

5.—(1) Subject to paragraph (2), all the scheme property of an open-ended investment company must be entrusted for safekeeping to a person appointed for the purpose (“a depositary").

(2) Nothing in paragraph (1)—

(a)applies to any scheme property designated for the purposes of this regulation by [F9FCA rules];

(b)prevents a depositary from—

(i)entrusting to a third party all or some of the assets in its safekeeping; or

(ii)in a case falling within sub-paragraph (i), authorising the third party to entrust all or some of those assets to other specified persons.

(3) Schedule 1 to these Regulations makes provision with respect to depositaries of open-ended investment companies.

Textual Amendments

[F9FCA rules] U.K.

6.—(1) The Authority’s powers to make rules under section 247 (trust scheme rules) and section 248 (scheme particulars rules) of the Act in relation to authorised unit trust schemes are, subject to the provisions of these Regulations, exercisable in relation to open-ended investment companies—

(a)for like purposes; and

(b)subject to the same conditions.

(2) In these Regulations any document which a person is required to submit and publish by virtue of rules made by the Authority under paragraph (1) for like purposes to those in section 248 of the Act is referred to as a prospectus.

Textual Amendments

Modification or waiver of [F9FCA rules] U.K.

7.—(1) The Authority may, on the application or with the consent of any person to whom any [F9FCA rules] apply, direct that all or any of the [F9FCA rules]—

(a)are not to apply to him as respects a particular open-ended investment company; or

(b)are to apply to him as respects such a company with such modifications as may be specified in the direction.

(2) The Authority may, on the application or with the consent of an open-ended investment company and its depositary acting jointly, direct that all or any of the [F9FCA rules]—

(a)are not to apply to the company; or

(b)are to apply to the company with such modifications as may be specified in the direction.

(3) [F17Sections 138A(3) to (7) and 138B of the Act] (modification or waiver of rules) have effect in relation to a direction under paragraph (1) as they have effect in relation to a direction under [F18section 138A(1)] of the Act but with the following modifications—

(a)subsection (4)(a) is to be read as if the words “by the authorised person" were omitted;

(b)any reference to the authorised person (except in subsection (4)(a)) is to be read as a reference to the person mentioned in paragraph (1); and

(c)[F19section 138B(3)(c)] is to be read, in relation to a shareholder, as if the word “commercial" were omitted.

(4) [F20Sections 138A(3) to (7) and 138B of the Act] have effect in relation to a direction under paragraph (2) as they have effect in relation to a direction under [F21section 138A(1)] of the Act but with the following modifications—

(a)[F22section 138A(4)(a)] is to be read as if the words “by the authorised person" were omitted;

(b)[F23section 138B(3)(c) and (5)] are to be read as if the reference to the authorised person were a reference to each of the company and its depositary;

(c)[F24section 138B(3)(c)] is to be read, in relation to a shareholder, as if the word “commercial" were omitted; and

(d)[F25section 138A(7)] is to be read as if the reference to the authorised person were a reference to the company and its depositary acting jointly.

Textual Amendments

Notices: generalU.K.

8.  Subject to the provisions of these Regulations—

(a)section 387 of the Act (warning notices) applies to a warning notice given under any provision of these Regulations in the same way as it applies to a warning notice given under any provision of the Act;

(b)section 388 of the Act (decision notices) applies to a decision notice given under any provision of these Regulations in the same way as it applies to a decision notice given under any provision of the Act;

(c)section 389 of the Act (notices of discontinuance) applies to the discontinuance of the action proposed in a warning notice or the action to which a decision notice relates given under any provision of these Regulations in the same way as it applies to a warning notice or decision notice given under any provision of the Act;

(d)section 390 of the Act (final notices) applies to a decision notice given under any provision of these Regulations in the same way as it applies to a decision notice given under any provision of the Act.

PublicationU.K.

9.  Section 391 of the Act (publication) applies to the notices mentioned in regulation 8 in the same way as it applies to any such notice given under any provision of the Act.

The Authority’s proceduresU.K.

10.  Section 395 of the Act [F26(the FCA’s and the PRA’s procedures)] applies to the procedure relating to the Authority’s functions in relation to supervisory notices, warning notices and decision notices given under any provision of these Regulations.

Textual Amendments

The TribunalU.K.

F2711.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F28Umbrella companiesU.K.

Textual Amendments

Segregated liability of sub-fundsU.K.

11A.—(1) In the case of an umbrella company, the assets of a sub-fund belong exclusively to that sub-fund and shall not be used to discharge the liabilities of or claims against the umbrella company or any other person or body, or any other sub-fund, and shall not be available for any such purpose whether such liability or claim was incurred before, on or after the date this regulation first applies to such umbrella company.

(2) Any liability incurred on behalf of or attributable to any sub-fund of an umbrella company shall be discharged solely out of the assets of that sub-fund.

(3) Any provision, whether contained in an instrument of incorporation, agreement, contract or otherwise, shall be void to the extent that it is inconsistent with paragraph (1) or (2) and any application of, or agreement to apply, assets in contravention of either such paragraph shall be void.

(4) An umbrella company may allocate any assets or liabilities which —

(a)it receives or incurs on behalf of its sub-funds or in order to enable the operation of the sub-funds; and

(b)are not attributable to any particular sub-fund,

between its sub-funds in a manner which it considers is fair to shareholders.

(5) A sub-fund of an umbrella company is not a legal person separate from that umbrella company but the property of a sub-fund is subject to orders of the court as it would have been had the sub-fund been a separate legal person.

(6) Without prejudice to paragraphs (1) and (2) and save as provided in regulation 33C(7), an umbrella company may sue and be sued in respect of a particular sub-fund and may exercise the same rights of set-off in relation to that sub-fund as apply in respect of companies.

Cross sub-fund investmentU.K.

11B.  Notwithstanding section 658 of the Companies Act 2006 and any rule of law which prohibits or restricts a company from acquiring its own shares, an umbrella company may, for the account of any of its sub-funds, and in accordance with [F9FCA rules], acquire by subscription or transfer for consideration, shares of any class or classes, however described, representing other sub-funds of the same umbrella company.]

Textual Amendments

AuthorisationU.K.

Applications for authorisationU.K.

12.—(1) Any application for an authorisation order in respect of a proposed open-ended investment company—

(a)must be made in such manner as the Authority may direct;

(b)must state with respect to each person proposed in the application as a director of the company the particulars set out in regulation 13;

(c)must state the corporate name and registered or principal office of the person proposed in the application as depositary of the company; and

(d)must contain or be accompanied by such other information as the Authority may reasonably require for the purpose of determining the application.

(2) At any time after receiving an application and before determining it the Authority may require the applicant to furnish additional information.

(3) Different directions may be given and different requirements imposed in relation to different applications.

(4) Any information to be furnished to the Authority under this regulation must be in such form or verified in such manner as it may specify.

(5) A person commits an offence if—

(a)for the purposes of or in connection with any application under this regulation; or

(b)in purported compliance with any requirement imposed on him by or under this regulation;

he furnishes information which he knows to be false or misleading in a material particular or recklessly furnishes information which is false or misleading in a material particular.

(6) A person guilty of an offence under paragraph (5) is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both.

Particulars of directorsU.K.

13.—(1) Subject to paragraph (2), an application for an authorisation order must contain the following particulars with respect to each person proposed as a director of the company—

(a)in the case of an individual, his present name, any former name, his usual residential address, his nationality, his business occupation (if any), particulars of any other directorships held by him or which have been held by him and his date of birth;

(b)in the case of a body corporate [F29or firm that is a legal person under the law by which it is governed], its corporate or firm name and the address of its registered or principal office.

(2) The application need not contain particulars of a directorship—

(a)which has not been held by a director at any time during the 5 years preceding the date on which the application is delivered to the Authority;

(b)which is held by a director in a body corporate which is dormant and, if he also held that directorship for any period during those 5 years, which was dormant for the whole of that period; or

(c)which was held by a director for any period during those 5 years in a body corporate which was dormant for the whole of that period.

(3) For the purposes of paragraph (2), a body corporate is dormant during a period in which no significant transaction occurs; and it ceases to be dormant on the occurrence of such a transaction.

(4) In paragraph (1)(a)—

(a)name means a person’s Christian name (or other forename) and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them;

(b)the reference to a former name does not include—

(i)in the case of a peer, or an individual normally known by a British title, the name by which he was known previous to the adoption of or succession to the title;

(ii)in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more; or

(iii)in the case of a married woman, the name by which she was known previous to the marriage; and

(c)the reference to directorships is a reference to directorships in any body corporate whether or not incorporated in [F30the United Kingdom].

(5) In paragraph (3) the reference to a significant transaction is, in relation to a company within the meaning of [F31section 1 of the 2006 Act], a reference to a significant accounting transaction within the meaning of [F32section 1169(2) [F31of that Act], other than a transaction to which subsection (3) of that section applies].

Textual Amendments

AuthorisationU.K.

14.—(1) Where an application is duly made under regulation 12, the Authority may make an authorisation order in respect of an open-ended investment company if—

(a)it is satisfied that the company will, on the coming into effect of the authorisation order, comply with the requirements in regulation 15;

(b)it is satisfied that the company will, at that time, comply with the requirements of [F9FCA rules];

(c)it has been provided with a copy of the proposed company’s instrument of incorporation and a certificate signed by a solicitor to the effect that the instrument of incorporation complies with Schedule 2 to these Regulations and with such of the requirements of [F9FCA rules] as relate to the contents of that instrument of incorporation; and

(d)it has received a notification under regulation 18(3) from the appropriate registrar.

(2) If the Authority makes an order under paragraph (1), it must give written notice of the order to the applicant.

(3) In determining whether the requirement referred to in regulation 15(5) is satisfied in respect of any proposed director of a company, the Authority may take into account—

(a)any matter relating to any person who is or will be employed by or associated with the proposed director, for the purposes of the business of the company;

(b)if the proposed director is a body corporate, any matter relating to any director or controller of the body, to any other body corporate in the same group or to any director or controller of any such other body corporate;

(c)if the proposed director is a partnership, any matter relating to any of the partners; and

(d)if the proposed director is an unincorporated association, any matter relating to any member of the governing body of the association or any officer or controller of the association.

(4) [F33Subject to paragraph (4A)] an application must be determined by the Authority before the end of the period of six months beginning with the date on which it receives a completed application.

[F34(4A) Where the application relates to an open-ended investment company which is a UCITS, it must be determined by the Authority before the end of two months beginning with the date on which it receives the application.]

(5) The Authority may determine an incomplete application if it considers it appropriate to do so and, if it does so, it must determine the application within the period of twelve months beginning with the date on which it first receives the application.

(6) The applicant may withdraw his application, by giving the Authority written notice, at any time before the Authority determines it.

(7) An authorisation order must specify the date on which it is to come into effect.

(8) Schedule 2 to these Regulations makes provision with respect to the contents, alteration and binding nature of the instrument of incorporation of an open-ended investment company.

Textual Amendments

Requirements for authorisationU.K.

15.—(1) The requirements referred to in regulation 14(1)(a) are as follows.

(2) The company and its instrument of incorporation must comply with the requirements of these regulations and [F9FCA rules].

(3) The head office of the company must be situated [F35in England and Wales (or Wales), in Scotland or in Northern Ireland].

(4) The company must have at least one director.

(5) The directors of the company must be fit and proper persons to act as such.

(6) If the company has only one director, that director must be a body corporate which is an authorised person and which has permission under F36... the Act to act as sole director of an open-ended investment company.

(7) If the company has two or more directors, the combination of their experience and expertise must be such as is appropriate for the purposes of carrying on the business of the company.

(8) The person appointed as the depositary of the company—

(a)must be a body corporate incorporated in the United Kingdom or another EEA State;

(b)must have a place of business in the United Kingdom;

(c)must have its affairs administered in the country in which it is incorporated;

(d)must be an authorised person;

(e)must have permission under Part IV of the Act to act as the depositary of an open-ended investment company; and

(f)must be independent of the company and of the persons appointed as directors of the company.

(9) The name of the company must not be undesirable or misleading.

(10) The aims of the company must be reasonably capable of being achieved.

(11) The company must meet one or both of the following requirements—

(a)shareholders are entitled to have their shares redeemed or repurchased upon request at a price related to the net value of the scheme property and determined in accordance with the company’s instrument of incorporation and [F9FCA rules]; or

(b)shareholders are entitled to sell their shares on an investment exchange at a price not significantly different from that mentioned in sub-paragraph (a).

Textual Amendments

Representations against refusal of authorisationU.K.

16.—(1) If the Authority proposes to refuse an application made under regulation 12, it must give the applicant a warning notice.

(2) If the Authority decides to refuse the application—

(a)it must give the applicant a decision notice; and

(b)the applicant may refer the matter to the [F37Upper Tribunal].

Textual Amendments

CertificatesU.K.

17.—(1) If an open-ended investment company which complies with the conditions necessary to enable it to enjoy the rights conferred by [F38the UCITS directive] so requests, the Authority may issue a certificate to the effect that the company complies with those conditions.

(2) Such a certificate may be issued on the making of an authorisation order in respect of the company or at any subsequent time.

Textual Amendments

NamesU.K.

Registrar’s approval of namesU.K.

18.—(1) Where, in respect of a proposed open-ended investment company, it appears to the Authority that the requirements of regulation 14(1)(a) to (c) are or will be met, the Authority must notify the appropriate registrar of the name by which it is proposed that the company should be incorporated.

(2) Every open-ended investment company must obtain the Authority’s approval to any proposed change in the name by which the company is incorporated and the Authority must notify the appropriate registrar of the proposed name.

(3) If it appears to the appropriate registrar that the provisions of regulation 19(1) are not contravened in relation to the proposed name, he must notify the Authority to that effect.

Prohibition on certain namesU.K.

19.—(1) No open-ended investment company is to have a name that—

(a)includes any of the following words or expressions, that is to say—

(i)limited, unlimited or public limited company, or their Welsh equivalents (“cyfyngedig", “anghyfyngedig" and “cwmni cyfyngedig cyhoeddus" respectively); or

(ii)European Economic Interest Grouping or any equivalent set out in Schedule 3 to the European Economic Interest Grouping Regulations 1989 M2;

(b)includes an abbreviation of any of the words or expressions referred to in sub-paragraph (a); or

(c)is the same as any other name appearing in the registrar’s index of company names.

(2) In determining for the purposes of paragraph (1)(c) whether one name is the same as another, there are to be disregarded—

(a)the definite article, where it is the first word of the name;

(b)the following word and expressions where they appear at the end of the name—

  • “company" or its Welsh equivalent (“cwmni");

  • “and company" or its Welsh equivalent (“a’r cwmni");

  • “company limited" or its Welsh equivalent (“cwmni cyfyngedig");

  • “limited" or its Welsh equivalent (“cyfyngedig");

  • “unlimited" or its Welsh equivalent (“anghyfyngedig");

  • “public limited company" or its Welsh equivalent (“cwmni cyfyngedig cyhoeddus");

  • “European Economic Interest Grouping" or any equivalent set out in Schedule 3 to the European Economic Interest Grouping Regulations 1989;

  • “investment company with variable capital" or its Welsh equivalent (“cwmni buddsoddi â chyfalaf newidiol");

  • “open-ended investment company" or its Welsh equivalent (“cwmni buddsoddiant penagored");

(c)abbreviations of any of those words or expressions where they appear at the end of the name; and

(d)type and case of letters, accents, spaces between letters and punctuation marks;

and “and" and “&" are to be taken as the same.

Marginal Citations

M2S.I. 1989/638. The Regulations were modified by virtue of section 2(1) of the European Economic Area Act 1994 (c. 51) so that, for any limitation in the Regulations that proceeds by reference to the Communities, there is substituted a corresponding limitation relating to the European Economic Area.

Registrar’s index of company namesU.K.

20.—(1) Upon making an authorisation order in respect of an open-ended investment company or upon approving any change in the name of such a company, the Authority must notify the appropriate registrar of the name by which the company is incorporated or, as the case may be, of the company’s new name.

F39(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

AlterationsU.K.

The Authority’s approval for certain changes in respect of a companyU.K.

21.—(1) An open-ended investment company must give written notice to the Authority of —

(a)any proposed alteration to the company’s instrument of incorporation [F40other than one to which regulation 22A applies];

(b)any proposed alteration to the company’s prospectus which, if made, would be significant;

(c)any proposed reconstruction or amalgamation involving the company [F41other than a proposed merger to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2010 applies];

(d)any proposal to wind up the affairs of the company [F42or a sub-fund of that company] otherwise than by the court;

(e)any proposal to replace a director of the company, to appoint any additional director or to decrease the number of directors in post; and

(f)any proposal to replace the depositary of the company.

(2) Any notice given under paragraph (1)(a) must be accompanied by a certificate signed by a solicitor to the effect that the change in question will not affect the compliance of the instrument of incorporation with Schedule 2 to these Regulations and with such of the requirements of [F9FCA rules] as relate to the contents of that instrument.

(3) Effect must not be given to any proposal falling within paragraph (1) unless—

(a)the Authority, by written notice, has given its approval to the proposal; or

(b)one month, beginning with the date on which notice of the proposal was given, has expired without the company or the depositary having received from the Authority a warning notice under regulation 22 in respect of the proposal.

(4) No change falling within paragraph (1)(e) may be made if any of the requirements set out in regulation 15(4) to (7) and (8)(f) would not be satisfied if the change were made and no change falling within paragraph (1)(f) may be made if any of the requirements in regulation 15(8) would not be satisfied if the change were made.

Textual Amendments

Procedure when refusing approval of proposed changesU.K.

22.—(1) If the Authority proposes to refuse approval of a proposal to replace the depositary, or any director, of an open-ended investment company, it must give a warning notice to the company.

(2) If the Authority proposes to refuse approval of any other proposal falling within regulation 21, it must give separate warning notices to the company and its depositary.

(3) To be valid the warning notice must be received by that person before the end of one month beginning with the date on which notice of the proposal was given.

(4) If, having given a warning notice to a person, the Authority decides to refuse approval—

(a)it must give him a decision notice; and

(b)he may refer the matter to the [F43Upper Tribunal].

(5) If, having given a warning notice to a person, the Authority decides to approve the proposal, it must give him a [F44written] notice.

Textual Amendments

[F45The Authority’s approval for conversion of a feeder UCITSU.K.

22A.—(1) An open-ended investment company must give written notice to the Authority of any proposal to amend its instrument of incorporation to enable it to convert into a UCITS which is not a feeder UCITS.

(2) Any notice given in respect of such a proposal must be accompanied by—

(a)a certificate signed by a solicitor to the effect that the amendment will not affect the compliance of the instrument of incorporation with Schedule 2 to these Regulations and with such of the requirements of [F9FCA rules] as relate to the contents of that instrument; and

(b)the specified information.

(3) Paragraph (4) applies where—

(a)the notice given under subsection (1) relates to a proposal to amend the instrument of incorporation of an open-ended investment company which is a feeder UCITS to enable it to convert into a UCITS which is not a feeder UCITS following the winding-up of its master UCITS; and

(b)the proceeds of the winding-up are to be paid to the company before the date on which it proposes to start investing in accordance with the new investment objectives and policy provided for in its amended instrument of incorporation.

(4) Where this paragraph applies, the Authority may only approve the proposal subject to the conditions set out in section 283A(5) and (6) of the Act.

(5) The Authority must, within fifteen working days from the date on which it received the notice under paragraph (1), give—

(a)written notice that it approves the proposed amendments to the instrument of incorporation, or

(b)a warning notice under regulation 22 that it proposes to refuse approval of the proposed amendments.

(6) Effect is not to be given to any proposal of which notice has been given under subsection (1) unless the Authority, by written notice, has given its approval to the proposal.

(7) If the Authority proposes to refuse approval of the proposal it must give separate warning notices to the company and to its depositary.

(8) If, having given a warning notice to a person, the Authority decides to refuse approval—

(a)it must give that person a decision notice; and

(b)that person may refer the matter to the Tribunal.

(9) In this regulation, “specified” means specified in—

(a)rules made by the Authority to implement the UCITS directive, or

(b)any directly applicable Community regulation or decision made under the UCITS directive.]

Textual Amendments

Ending of authorisationU.K.

Ending of authorisationU.K.

23.—(1) The Authority may revoke an authorisation order if it appears to it that—

(a)any requirement for the making of the order is no longer satisfied;

(b)the company, any of its directors or its depositary—

(i)has contravened any relevant provision; or

(ii)has, in purported compliance with any such provision, knowingly or recklessly given the Authority information which is false or misleading in a material particular;

(c)no regulated activity has been carried on in relation to the company for the previous twelve months; or

(d)it is desirable to revoke the authorisation order in order to protect the interests of shareholders or potential shareholders in the company.

(2) For the purposes of paragraph (1)(d), the Authority may take into account any matter relating to—

(a)the company or its depositary;

(b)any director or controller of the depositary;

(c)any person employed by or associated, for the purposes of the business of the company, with the company or its depositary;

(d)any director of the company;

(e)any person exercising influence over any director of the company or its depositary;

(f)any body corporate in the same group as any director of the company or its depositary;

(g)any director of any such body corporate;

(h)any person exercising influence over any such body corporate;

(i)any person who would be such a person as is mentioned in regulation 14(3)(a) to (d) were it to apply to a director as it applies to a proposed director.

(3) Before revoking any authorisation order that has come into effect, the Authority must ensure that such steps as are necessary and appropriate to secure the winding up of the company (whether by the court or otherwise) have been taken.

ProcedureU.K.

24.—(1) If the Authority proposes to make an order revoking an authorisation order (“a revoking order"), it must give separate warning notices to the company and its depositary.

(2) If, having given warning notices, the Authority decides to make a revoking order it must without delay give the company and its depositary a decision notice and either of them may refer the matter to the [F46Upper Tribunal].

(3) Sections 393 and 394 of the Act apply to a warning notice or a decision notice given in accordance with this regulation.

Textual Amendments

Powers of interventionU.K.

DirectionsU.K.

25.—(1) The Authority may give a direction under this regulation if it appears to the Authority that—

(a)one or more requirements for the making of an authorisation order are no longer satisfied;

(b)the company, any of its directors or its depositary—

(i)has contravened or is likely to contravene any relevant provision; or

(ii)has, in purported compliance with any such provision, knowingly or recklessly given the Authority information which is false or misleading in a material particular; or

(c)it is desirable to give a direction in order to protect the interests of shareholders or potential shareholders in the company.

(2) A direction under this regulation may—

(a)require the company to cease the issue or redemption, or both the issue and redemption, of shares or any class of shares in the company;

(b)in the case of a director of the company who is the designated person, require that director to cease transfers to or from, or both to and from, his own holding of shares, or of any class of shares, in the company;

(c)in the case of an umbrella company, require that investments made in respect of one or more parts of the scheme property which are pooled separately be realised and, following the discharge of such liabilities of the company as are attributable to the relevant part or parts of the scheme property, that the resulting funds be distributed to shareholders in accordance with [F9FCA rules];

(d)require any director of the company to present a petition to the court to wind up the company; or

(e)require that the affairs of the company be wound up otherwise than by the court.

(3) Subject to paragraph (4), if the authorisation order is revoked, the revocation does not affect the operation of any direction under this regulation which is then in force; and a direction under this regulation may be given in relation to a company in the case of which an authorisation order has been revoked if a direction under this regulation was already in force at the time of revocation.

(4) Where a winding-up order has been made by the court, no direction under this regulation is to have effect in relation to the company concerned.

(5) For the purposes of paragraph (1)(c), the Authority may take into account any matter relating to any of the persons mentioned in regulation 23(2).

(6) If a person contravenes a direction under this regulation, [F47section 138D] (actions for damages) applies to the contravention as it applies to a contravention mentioned in that section.

(7) The Authority may, on its own initiative or on the application of the company or its depositary, revoke or vary a direction given under this regulation if it appears to the Authority—

(a)in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force;

(b)in the case of variation, that the direction should take effect or continue in force in a different form.

Textual Amendments

Applications to the courtU.K.

26.—(1) This regulation applies if the Authority could give a direction under regulation 25 in relation to an open-ended investment company.

(2) The Authority may apply to the court for an order removing the depositary or any director of the company and replacing any such person with a person or persons nominated by the Authority.

(3) The Authority may nominate a person for the purposes of paragraph (2) only if it is satisfied that, if the order were made, the requirements of paragraphs (4) to (7) or, as the case may be, of paragraph (8) of regulation 15 would be met.

(4) If it appears to the Authority that there is no person whom it may nominate for the purposes of paragraph (2), it may apply to the court for an order removing the director in question or the depositary (or both) and appointing an authorised person to wind up the company.

(5) On an application under this regulation the court may make such order as it thinks fit.

(6) The court may, on the application of the Authority, rescind any such order as is mentioned in paragraph (4) and substitute such an order as is mentioned in paragraph (2).

(7) The Authority must—

(a)give written notice of the making of an application under this section to—

(i)the company;

(ii)its depositary; and

(iii)where the application seeks the removal of any director of the company, that director; and

(b)take such steps as it considers appropriate for bringing the making of the application to the attention of the shareholders of the company.

Procedure on giving directions under regulation 25 and varying them on Authority’s own initiativeU.K.

27.—(1) A direction takes effect—

(a)immediately, if the notice given under paragraph (3) states that that is the case;

(b)on such date as may be specified in the notice; or

(c)if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A direction may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to the ground on which it is exercising its power under regulation 25, considers that it is necessary for the direction to take effect immediately (or on that date).

(3) If the Authority proposes to give a direction under regulation 25, or gives such a direction with immediate effect, it must give separate written notices to the company and its depositary.

(4) The notice must—

(a)give details of the direction;

(b)inform the person to whom it is given of when the direction takes effect;

(c)state the Authority’s reasons for giving the direction and for its determination as to when the direction takes effect;

(d)inform the person to whom it is given that he may make representations to the Authority within such period as may be specified in it (whether or not he has referred the matter to the [F48Upper Tribunal]); and

(e)inform him of his right to refer the matter to the [F48Upper Tribunal].

(5) If the direction imposes a requirement under regulation 25(2)(a) or (b), the notice must state that the requirement has effect until—

(a)a specified date; or

(b)a further direction.

(6) If the direction imposes a requirement under regulation 25(2)(d) or (e), the petition must be presented (or, as the case may be, the company must be wound up)—

(a)by a date specified in the notice; or

(b)if no date is specified, as soon as possible.

(7) The Authority may extend the period allowed under the notice for making representations.

(8) If, having considered any representations made by a person to whom the notice was given, the Authority decides—

(a)to give the direction in the way proposed, or

(b)if it has been given, not to revoke the direction,

it must give separate written notices to the company and its depositary.

(9) If, having considered any representations made by a person to whom the notice was given, the Authority decides—

(a)not to give the direction in the way proposed,

(b)to give the direction in a way other than that proposed, or

(c)to revoke a direction which has effect,

it must give separate written notices to the company and its depositary.

(10) A notice given under paragraph (8) must inform the person to whom it is given of his right to refer the matter to the [F49Upper Tribunal].

(11) A notice under paragraph (9)(b) must comply with paragraph (4).

(12) If a notice informs a person of his right to refer a matter to the [F50Upper Tribunal], it must give an indication of the procedure on such a reference.

(13) This regulation applies to the variation of a direction on the Authority’s own initiative as it applies to the giving of a direction.

(14) For the purposes of paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8) of the Act.

(15) Section 395 of the Act [F51(the FCA’s and PRA’s procedures)] has effect as if subsection (13) included a reference to a notice given in accordance with paragraph (3), (8) or (9)(b).

Textual Amendments

Procedure: refusal to revoke or vary directionU.K.

28.—(1) If on an application under regulation 25(7) for a direction to be revoked or varied the Authority proposes—

(a)to vary the direction otherwise than in accordance with the application, or

(b)to refuse to revoke or vary the direction,

it must give the applicant a warning notice.

(2) If the Authority decides to refuse to revoke or vary the direction—

(a)it must give the applicant a decision notice; and

(b)the applicant may refer the matter to the [F52Upper Tribunal].

Textual Amendments

Procedure: revocation of direction and grant of request for variationU.K.

29.—(1) If the Authority decides on its own initiative to revoke a direction under regulation 25 it must give separate written notices of its decision to the company and its depositary.

(2) If on an application made under regulation 25(7) for a direction to be revoked or varied, the Authority decides to revoke or vary it in accordance with the application, it must give the applicant written notice of its decision.

(3) A notice under this regulation must specify the date on which the decision takes effect.

(4) The Authority may publish such information about the revocation or variation, in such way, as it considers appropriate.

[F53InformationU.K.

Textual Amendments

Information for home state regulatorU.K.

29A.—(1) Paragraph (2) applies if, in accordance with rules made by the Authority to implement Article 66 of the UCITS directive, the Authority is informed by an open-ended investment company which is a master UCITS that a feeder UCITS which invests in shares of the master UCITS is an EEAUCITS.

(2) The Authority must immediately inform the home state regulator of the feeder UCITS of the investment made by that UCITS in the master UCITS.]

[F53Information for feeder UCITSU.K.

29B.—(1) The Authority must immediately inform any authorised open-ended investment company which is a feeder UCITS of an open-ended investment company or authorised unit trust scheme (the master UCITS) of—

(a)any failure of which the Authority becomes aware by the master UCITS to comply with a provision made in implementation of Chapter VIII of the UCITS directive;

(b)any warning notice or decision notice given to the master UCITS in relation to a contravention of any provision made in implementation of Chapter VIII of the UCITS directive by or under any enactment or in rules of the Authority;

(c)any information reported to the Authority pursuant to rules of the Authority made to implement Article 106(1) of the UCITS directive which relates to the master UCITS, or to one or more of its directors, its operator, trustee, depository or auditor.

(2) The Authority must immediately inform any authorised open-ended investment company which is a feeder UCITS of an EEAUCITS of any information received from the home state regulator of the EEAUCITS in relation to—

(a)any failure by the EEAUCITS to comply with any requirement in Chapter VIII on the UCITS directive;

(b)any decision or measure imposed on the EEAUCITS under provisions implementing Chapter VIII of the UCITS directive;

(c)any information reported to the home state regulator pursuant to Article 106(1) of the UCITS directive relating to the EEAUCITS, to one or more of its directors, its management company, trustee, depositary or auditor.

(3) Where the Authority has the information described in paragraph (1)(a), (b) or (c) in relation to an authorised open-ended investment company which is a master UCITS in relation to one or more feeder UCITS which are EEAUCITS, the Authority must immediately give that information to the home state regulator of each feeder UCITS established outside the United Kingdom.]

InvestigationsU.K.

Power to investigateU.K.

30.—(1) The Authority or the Secretary of State may appoint one or more competent persons to investigate and report on the affairs of, or of any director or depositary of, an open-ended investment company if it appears to either of them that it is in the interests of shareholders or potential shareholders of the company to do so or that the matter is of public concern.

(2) A person appointed under paragraph (1) to investigate the affairs of, or of any director or depositary of, a company may also, if he thinks it necessary for the purposes of that investigation, investigate the affairs of (or of the directors, depositary, trustee or operator of)—

(a)an open-ended investment company the directors of which include any of the directors of the company whose affairs are being investigated by virtue of that paragraph;

(b)an open-ended investment company the directors of which include any of the directors of the depositary whose affairs are being investigated by virtue of that paragraph;

(c)an open-ended investment company the depositary of which is—

(i)the same as the depositary of the company whose affairs are being investigated by virtue of that paragraph; or

(ii)the depositary whose affairs are being investigated by virtue of that paragraph;

(d)an open-ended investment company the directors of which include—

(i)the director whose affairs are being investigated by virtue of that paragraph; or

(ii)any director of a body corporate which is the director whose affairs are being investigated by virtue of that paragraph;

(e)a collective investment scheme the manager, depositary or operator of which is a director of the company whose affairs are being investigated by virtue of that paragraph;

(f)a collective investment scheme the trustee of which is—

(i)the same as the depositary of the company whose affairs are being investigated by virtue of that paragraph; or

(ii)the depositary whose affairs are being investigated by virtue of that paragraph; or

(g)a collective investment scheme the manager, depositary or operator of which is—

(i)the director whose affairs are being investigated by virtue of that paragraph; or

(ii)a director of a body corporate which is the director whose affairs are being investigated by virtue of that paragraph.

(3) If the person (“A") appointed to conduct an investigation under this regulation considers that a person (“B") is or may be able to give information which is relevant to the investigation, A may require B—

(a)to produce to A any documents in B’s possession or under his control which appear to A to be relevant to that investigation;

(b)to attend before A; and

(c)otherwise to give A all such assistance in connection with the investigation which B is reasonably able to give;

and it is B’s duty to comply with that requirement.

(4) Subsection (5) to (9) of section 170 of the Act (investigations: general) apply if—

(a)the Authority appoints a person under this regulation to conduct an investigation on its behalf; or

(b)the Secretary of State appoints a person under this regulation to conduct an investigation on his behalf;

as they apply in the cases mentioned in subsection (1) of that section.

(5) Section 174 of the Act (admissibility of statements made to investigators) applies to a statement made by a person in compliance with a requirement imposed on him under this regulation as it applies to a statement mentioned in that section.

(6) Subsections (2) to (4) and (6) of section 175 (information and documents: supplemental provisions) and section 177 of the Act (offences) have effect as if this regulation were contained in Part XI of the Act (information gathering and investigations).

(7) Subsections (1) to (9) of section 176 of the Act (entry of premises under warrant) apply in relation to a person appointed under paragraph (1) as if—

(a)references to an investigator were references to a person so appointed;

(b)references to an information requirement were references to a requirement imposed under this regulation by a person so appointed;

(c)the premises mentioned in section 176(3)(a) were the premises of a person whose affairs are the subject of an investigation under this regulation or of an appointed representative of such a person.

(8) No person may be required under this regulation to disclose information or produce a document in respect of which he owes an obligation of confidence by virtue of carrying on a banking business unless—

(a)the imposition of the requirement is authorised by the Authority or the Secretary of State (as the case may be) or the person to whom the obligation of confidence is owed; or

(b)the person to whom it is owed is—

(i)a director or depositary of any open-ended investment company which is under investigation; or

(ii)any other person whose own affairs are under investigation.

Winding upU.K.

Winding up by the courtU.K.

31.—(1) Where an open-ended investment company is wound up as an unregistered company under Part V of the 1986 Act [F54or Part 6 of the 1989 Order], the provisions of that Act [F55or that Order] apply for the purposes of the winding up with the following modifications.

(2) A petition for the winding up of an open-ended investment company may be presented by the depositary of the company as well as by any person authorised under [F56section 124 of the 1986 Act or Article 104 of the 1989 Order] (application for winding up) or [F57section 124A of that Act or Article 104A of that Order] (petition for winding up on grounds of public interest), as those sections [F58or Articles] apply by virtue of Part V of that Act [F59or Part 6 of that Order], to present a petition for the winding up of the company.

(3) Where a petition for the winding up of an open ended investment company is presented by a person other than the Authority—

(a)that person must serve a copy of the petition on the Authority; and

(b)the Authority is entitled to be heard on the petition.

(4) If, before the presentation of a petition for the winding up by the court of an open-ended investment company as an unregistered company under Part V of the 1986 Act [F60or Part 6 of the 1989 Order], the affairs of the company are being wound up otherwise than by the court—

(a)[F61section 129(2) of that Act or Article 109(2) of that Order] (commencement of winding up by the court) is not to apply; and

(b)any winding up of the company by the court is to be deemed to have commenced—

(i)at the time at which the Authority gave its approval to a proposal mentioned in paragraph (1)(d) of regulation 21; or

(ii)in a case falling within paragraph (3)(b) of that regulation, on the day following the end of the one-month period mentioned in that paragraph.

Textual Amendments

Dissolution on winding up by the courtU.K.

32.—(1) Section 172(8) of the 1986 Act [F62or Article 146(7) of the 1989 Order] (final meeting of creditors and vacation of office by liquidator), as that section applies by virtue of Part V of that Act [F63or Part 6 of that Order] (winding up of unregistered companies) has effect, in relation to open-ended investment companies, as if the reference to the registrar of companies was a reference to the Authority.

(2) Where, in respect of an open-ended investment company, the Authority receives—

(a)a notice given for the purposes of section 172(8) of the 1986 Act [F64or Article 146(7) of the 1989 Order] (as aforesaid); or

(b)a notice from the official receiver that the winding up, by the court, of the company is complete;

the Authority must, on receipt of the notice, forthwith register it and, subject to the provisions of this regulation, at the end of the period of three months beginning with the day of the registration of the notice, the company is to be dissolved.

(3) The Secretary of State may, on the application of the official receiver or any other person who appears to the Secretary of State to be interested, give a direction deferring the date at which the dissolution of the company is to take effect for such period as the Secretary of State thinks fit.

(4) An appeal to the court lies from any decision of the Secretary of State on an application for a direction under paragraph (3).

(5) Paragraph (3) does not apply to a case where the winding-up order was made by the court in Scotland, but in such a case the court may, on an application by any person appearing to the court to have an interest, order that the date at which the dissolution of the company is to take effect be deferred for such period as the court thinks fit.

(6) It is the duty of the person—

(a)on whose application a direction is given under paragraph (3);

(b)in whose favour an appeal with respect to an application for such a direction is determined; or

(c)on whose application an order is made under paragraph (5);

not later than seven days after the giving of the direction, the determination of the appeal or the making of the order, to deliver to the Authority for registration a copy of the direction or determination or, in respect of an order, a certified copy of the interlocutor.

(7) If a person without reasonable excuse fails to deliver a copy as required by paragraph (6), he is guilty of an offence.

(8) A person guilty of an offence under paragraph (7) is liable, on summary conviction—

(a)to a fine not exceeding level 1 on the standard scale; and

(b)on a second or subsequent conviction instead of the penalty set out in sub-paragraph (a), to a fine of £100 for each day on which the contravention is continued.

Textual Amendments

Dissolution in other circumstancesU.K.

33.—(1) Where the affairs of an open-ended investment company have been wound up otherwise than by the court, the Authority must, as soon as is reasonably practicable after the winding up is complete, register that fact and, subject to the provisions of this regulation, at the end of the period of three months beginning with the day of the registration, the company is to be dissolved.

(2) The court may, on the application of the Authority or the company, make an order deferring the date at which the dissolution of the company is to take effect for such period as the court thinks fit.

(3) It is the duty of the company, on whose application an order of the court under paragraph (2) is made, to deliver to the Authority, not later than seven days after the making of the order, a copy of the order for registration.

(4) Where any company, the head office of which is situated [F65in England and Wales (or Wales) or in Northern Ireland], is dissolved by virtue of paragraph (1), any sum of money (including unclaimed distributions) standing to the account of the company at the date of the dissolution must on such date as is determined in accordance with [F9FCA rules], be paid into court.

(5) Where any company, the head office of which is situated in Scotland, is dissolved by virtue of paragraph (1), any sum of money (including unclaimed dividends and unapplied or undistributable balances) standing to the account of the company at the date of the dissolution must—

(a)on such date as is determined in accordance with [F9FCA rules], be lodged in an appropriate bank or institution as defined in section 73(1) of the Bankruptcy (Scotland) Act 1985 M3 (interpretation) in the name of the Accountant of the Court; and

(b)thereafter be treated as if it were a sum of money lodged in such an account by virtue of section 193 of the 1986 Act (unclaimed dividends (Scotland)), as that section applies by virtue of Part V of that Act.

Textual Amendments

Marginal Citations

M31985 c. 66; the definition of “appropriate bank or institution" was substituted by section 108(1) of, and paragraph 20 of Schedule 6 to, the Banking Act 1987 (c. 22).

[F66Winding up of a master UCITSU.K.

33A.—(1) Paragraphs (2) and (3) apply if a master UCITS is wound up.

(2) If the Authority considers that an open-ended investment company which is a feeder UCITS of the master UCITS may be wound up under section 221 of the 1986 Act, the Authority must present a petition to the Court for the feeder UCITS to be wound up unless one of the conditions referred to in paragraph (4) is satisfied.

(3) If paragraph (2) does not apply, the Authority must require the directors of any open ended investment company which is a feeder UCITS of the master UCITS to submit a proposal under regulation 21 to wind up the affairs of the company unless one of the conditions referred to in paragraph (4) is satisfied.

(4) The conditions set out in paragraphs (2) and (3) are—

(a)the Authority approves under section 283A of the Act the investment by the feeder UCITS of at least 85% of its assets in units of another UCITS or master UCITS; or

(b)the Authority approves under regulation 22A an amendment of the instrument of incorporation of the company which would enable it to convert into a UCITS which is not a feeder UCITS.]

Textual Amendments

[F66Merger or division of a master UCITSU.K.

33B.—(1) Paragraph (2) applies if a master UCITS—

(a)merges with another UCITS, or

(b)is divided into two or more UCITS.

(2) The Authority must require the directors of any open-ended investment company which is a feeder UCITS of the master UCITS to prepare a proposal to wind up the affairs of the feeder UCITS under regulation 21 unless—

(a)the Authority approves under section 283A of the Act the investment by the company of at least 85% of its assets in the units of—

(i)the master UCITS which results from the merger;

(ii)one of the UCITS resulting from the division; or

(iii)another UCITS or master UCITS; or

(b)the Authority approves under regulation 22A an amendment of the instrument of incorporation of the company which would enable it to convert into a UCITS which is not a feeder UCITS.]

Textual Amendments

[F67Winding up of sub-fundsU.K.

33C.—(1) Save as provided in paragraphs (2) and (3), a sub-fund may be wound up as if it were an open-ended investment company in accordance with the provisions of regulations 31 to 33 provided that the appointment of the liquidator or any provisional liquidator and the powers and duties of the liquidator or any provisional liquidator shall be confined to the sub-fund which is being wound up and its affairs, business and property.

(2) Notwithstanding paragraph (1), sections 226 to 228 of the 1986 Act shall not apply where a sub-fund is wound up in accordance with the provisions of this regulation.

(3) The provisions of Part 5 of the 1986 Act with respect to staying, sisting or restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding-up order extend, in the case of a sub-fund, where the application to stay, sist or restrain is presented by a creditor, to actions and proceedings against the umbrella company of that sub-fund, or any of the other sub-funds of that umbrella company, in respect of a liability of that sub-fund.

(4) Notwithstanding regulation 11A(5), a sub-fund shall be treated as if it were a separate legal person for the purposes of winding up.

(5) For the purposes of paragraph (1), in regulations 31 to 33—

(a)a reference to an open-ended investment company is taken to be a reference to a sub-fund; and

(b)a reference to a company, save in relation to the term “unregistered company”, is taken to be a reference to a sub-fund.

(6) For the purposes of paragraph (1), in the provisions of the 1986 Act to which reference is made in regulations 31 to 33—

(a)references to an unregistered company and to a company are taken to be references to a sub-fund;

(b)a reference to creditors is taken to be a reference to the creditors of a sub-fund; and

(c)a reference to members is taken to be a reference to the holders of the shares in a sub-fund.

(7) Subject to paragraph (8), regulation 11A(6) shall not apply after the appointment of a liquidator or a provisional liquidator.

(8) Where an order has been made for the winding-up of a sub-fund, no action or proceedings shall be commenced or proceeded with against the umbrella company or the sub-fund in respect of any liability of the sub-fund, except by leave of the court and subject to such terms as the court may impose.]

Textual Amendments

PART IIIU.K. CORPORATE CODE

OrgansU.K.

DirectorsU.K.

34.—(1) On the coming into effect of an authorisation order in respect of an open-ended investment company, the persons proposed in the application under regulation 12 as directors of the company are deemed to be appointed as its first directors.

[F68(2) Subject to regulations 21 and 26, any subsequent appointment as a director of a company must be made by the company in general meeting, save that the directors of the company may appoint a person to act as director to fill any vacancy until such time as the next annual general meeting of the company takes place or, if the company does not hold annual general meetings, the directors of the company may appoint a person to act as director]

(3) Any act of a director is valid notwithstanding—

(a)any defect that may thereafter be discovered in his appointment or qualifications; or

(b)that it is afterwards discovered that his appointment had terminated by virtue of any provision contained in [F9FCA rules] which required a director to retire upon attaining a specified age.

(4) The business of a company must be managed—

(a)where a company has only one director, by that director; or

(b)where a company has more than one director, by the directors but subject to any provision contained in [F9FCA rules] as to the allocation between the directors of responsibilities for the management of the company (including any provision there may be as to the allocation of such responsibility to one or more directors to the exclusion of others).

(5) Subject to the provisions of these Regulations, [F9FCA rules] and the company’s instrument of incorporation, the directors of a company may exercise all the powers of the company.

Textual Amendments

[F69Removal of certain directors by ordinary resolutionU.K.

34A.—(1) The directors of an open-ended investment company must, on a members' requisition, forthwith proceed duly to convene an extraordinary general meeting of the company and this applies notwithstanding anything in the company’s instrument of incorporation.

(2) A members' requisition is a requisition—

(a)by members of the company holding at the date of the deposit of the requisition [F70at least the required percentage] of such of the paid-up capital of the company as at that date carries the right of voting at general meetings of the company; and

(b)which states as the object of the meeting the removal of one or more directors appointed in accordance with regulation 34(2) and which must be signed by the requisitionists and deposited at the registered office of the company.

[F71(2A) The required percentage is 10% unless more than twelve months has elapsed since the end of the last general meeting—

(a)called in pursuance of a members’ requisition under this regulation, or

(b)in relation to which the members of the company had (by virtue of an enactment, the company’s instrument of incorporation or otherwise) rights with respect to the circulation of a resolution no less extensive than they would have had if the meeting had been called at their request,

in which case the required percentage is 5%.]

(3) A company may by ordinary resolution at an extraordinary general meeting convened in accordance with paragraph (1) remove any director or directors appointed in accordance with regulation 34(2).

(4) This regulation is not to be treated as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as director or as derogating from any power to remove a director which exists apart from this regulation.]

Textual Amendments

Directors to have regard to interests of employeesU.K.

35.—(1) The matters to which a director of an open-ended investment company must have regard in the performance of his functions include the interests of the company’s employees in general, as well as the interests of its shareholders.

(2) The duty imposed by this regulation on a director is owed by him to the company (and the company alone) and is enforceable in the same way as any other fiduciary duty owed to a company by its directors.

Inspection of directors’ service contractsU.K.

36.—(1) Every open-ended investment company must keep at an appropriate place—

(a)in the case of each director whose contract of service with the company is in writing, a copy of that contract; and

(b)in the case of each director whose contract of service with the company is not in writing, a written memorandum setting out its terms.

(2) All copies and memoranda kept by a company in accordance with paragraph (1) must be kept at the same place.

(3) The following are appropriate places for the purposes of paragraph (1)—

(a)the company’s head office;

[F72(b)a place that is situated in the part of the United Kingdom in which the company is registered, which has been notified to the Authority as being the company’s alternative inspection location.]

(4) Every copy and memorandum required by paragraph (1) to be kept must be open to the inspection of any shareholder of the company.

(5) If such an inspection is refused, the court may by order compel an immediate inspection of the copy or memorandum concerned.

[F73(6) Every copy and memorandum required to be kept by paragraph (1) must be made available, for inspection, by the company at the company’s annual general meeting or, if the company does not hold annual general meetings, sent to any shareholder at his request within ten days of the company’s receipt of such request.]

(7) Paragraph (1) applies to a variation of a director’s contract of service as it applies to the contract.

Textual Amendments

General meetingsU.K.

37.—(1) Subject to paragraph (2) [F74and regulation 37A], every open-ended investment company [F74incorporated before 6 April 2005] must in each year hold a general meeting (“annual general meeting") in addition to any other meetings, whether general or otherwise, it may hold in that year.

(2) If a company holds its first annual general meeting within 18 months of the date on which the authorisation order made by the Authority in respect of the company comes into effect, paragraph (1) does not require the company to hold any other meeting as its annual general meeting in the year of its incorporation or in the following year.

(3) Subject to paragraph (2) [F75and regulation 37A], not more than 15 months may elapse between the date of one annual general meeting of a company and the date of the next.

Textual Amendments

[F76Election to dispense with annual general meetingsU.K.

37A.—(1) The directors of an open-ended investment company may elect to dispense with the holding of an annual general meeting by giving sixty days' written notice to all the company’s shareholders.

(2) An election has effect for the year in which it is made and subsequent years, but does not affect any liability already incurred by reason of default in holding an annual general meeting.]

Textual Amendments

Capacity of companyU.K.

38.—(1) The validity of an act done by an open-ended investment company cannot be called into question on the ground of lack of capacity by reason of anything in these Regulations, [F9FCA rules] or the company’s instrument of incorporation.

(2) Nothing in paragraph (1) affects the duty of the directors to observe any limitation on their powers.

Textual Amendments

Power of directors and general meeting to bind the companyU.K.

39.—(1) In favour of a person dealing in good faith, the following powers, that is to say—

(a)the power of the directors of an open-ended investment company (whether or not acting as a board) to bind the company, or authorise others to do so; and

(b)the power of such a company in general meeting to bind the company, or authorise others to do so;

are deemed to be free of any limitation under the company’s constitution.

(2) For the purposes of this regulation—

(a)a person deals with a company if he is party to any transaction or other act to which the company is a party;

(b)subject to paragraph (4), a person is not to be regarded as acting in bad faith by reason only of his knowing that, under the company’s constitution, an act is beyond any of the powers referred to in paragraph (1)(a) or (b); and

(c)subject to paragraph (4), a person is presumed to have acted in good faith unless the contrary is proved.

(3) The reference in paragraph (1) to any limitation under the company’s constitution on the powers therein set out includes any limitation deriving from these Regulations, from [F9FCA rules] or from a resolution of the company in general meeting or of a meeting of any class of shareholders.

(4) Sub-paragraphs (b) and (c) of paragraph (2) do not apply where—

(a)by virtue of a limitation deriving from these Regulations or from [F9FCA rules], an act is beyond any of the powers referred to in paragraph (1)(a) or (b); and

(b)the person in question—

(i)has actual knowledge of that fact; or

(ii)has deliberately failed to make enquiries in circumstances in which a reasonable and honest person would have done so.

(5) Paragraph (1) does not affect any liability incurred by the directors or any other person by reason of the directors exceeding their powers.

Textual Amendments

No duty to enquire as to capacity etc.U.K.

40.  Subject to regulation 39(4)(b)(ii), a party to a transaction with an open-ended investment company is not bound to enquire—

(a)as to whether the transaction is permitted by these Regulations, [F9FCA rules] or the company’s instrument of incorporation; or

(b)as to any limitation on the powers referred to in regulation 39(1)(a) or (b).

Textual Amendments

Exclusion or deemed noticeU.K.

F7741.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Restraint and ratification by shareholdersU.K.

42.—(1) A shareholder of an open-ended investment company may bring proceedings to restrain the doing of an act which but for regulation 38(1) would be beyond the company’s capacity.

(2) Paragraph (1) of regulation 39 does not affect any right of a shareholder of an open-ended investment company to bring proceedings to restrain the doing of an act which is beyond any of the powers referred to in that paragraph.

(3) No proceedings may be brought under paragraph (1) in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company; and paragraph (2) does not have the effect of enabling proceedings to be brought in respect of any such act.

(4) Any action by the directors of a company—

(a)which, but for regulation 38(1), would be beyond the company’s capacity; or

(b)which is within the company’s capacity but beyond the powers referred to in regulation 39(1)(a);

may only be ratified by a resolution of the company in general meeting.

(5) A resolution ratifying such action does not affect any liability incurred by the directors or any other person, relief from any such liability requiring agreement by a separate resolution of the company in general meeting.

(6) Nothing in this regulation affects any power or right conferred by or arising under [F78section 138D] (actions for damages) or section 380, 382 or 384 of the Act (injunctions and restitution orders).

Textual Amendments

Events affecting company statusU.K.

43.—(1) Where either of the conditions mentioned in paragraph (2) is satisfied, an open-ended investment company is not entitled to rely against other persons on the happening of any of the following events—

(a)any alteration of the company’s instrument of incorporation;

(b)any change among the directors of the company;

(c)as regards service of any document on the company, any change in the situation of the head office of the company; or

(d)the making of a winding-up order in respect of the company or, in circumstances in which the affairs of a company are to be wound up otherwise than by the court, the commencement of the winding up.

(2) The conditions referred to in paragraph (1) are that—

(a)the event in question had not been officially notified at the material time and is not shown by the company to have been known at that time by the other person concerned; and

(b)if the material time fell on or before the 15th day after the date of official notification (or where the 15th day was a non-business day, on or before the next day that was a business day), it is shown that the other person concerned was unavoidably prevented from knowing of the event at that time.

(3) In this regulation “official notification" means the notification in the Gazette (by virtue of regulation 78) of any document containing the information referred to in paragraph (1) above, and “officially notified" is to be construed accordingly.

Invalidity of certain transactions involving directorsU.K.

44.—(1) This regulation applies where—

(a)an open-ended investment company enters into a transaction to which the parties include a director of the company or any person who is an associate of such a director; and

(b)in connection with the transaction, the directors of the company (whether or not acting as a board) exceed any limitation on their powers under the company’s constitution.

(2) The transaction is voidable at the instance of the company.

(3) Whether or not the transaction is avoided, any such party to the transaction as is mentioned in paragraph (1)(a), and any director of the company who authorised the transaction, is liable—

(a)to account to the company for any gain which he has made directly or indirectly by the transaction; and

(b)to indemnify the company for any loss or damage resulting from the transaction.

(4) Nothing in paragraphs (1) to (3) is to be construed as excluding the operation of any other enactment or rule of law by virtue of which the transaction may be called into question or any liability to the company may arise.

(5) The transaction ceases to be voidable if—

(a)restitution of any money or other asset which was the subject-matter of the transaction is no longer possible;

(b)the company is indemnified for any loss or damage resulting from the transaction;

(c)rights which are acquired, bona fide for value and without actual notice of the directors concerned having exceeded their powers, by a person who is not a party to the transaction would be affected by the avoidance; or

(d)the transaction is ratified by resolution of the company in general meeting.

(6) A person other than a director of the company is not liable under paragraph (3) if he shows that at the time the transaction was entered into he did not know that the directors concerned were exceeding their powers.

(7) This regulation does not affect the operation of regulation 39 in relation to any party to the transaction not within paragraph (1)(a); but where a transaction is voidable by virtue of this regulation and valid by virtue of that regulation in favour of such a person, the court may, on the application of that person or of the company, make such order affirming, severing or setting aside the transaction, on such terms as appear to the court to be just.

(8) For the purposes of this regulation—

(a)“associate", in relation to any person who is a director of the company, means that person’s spouse, [F79civil partner,] child or stepchild (if under 18), employee, partner or any body corporate of which that person is a director; and if that person is a body corporate, any subsidiary undertaking or director of that body corporate (including any director or employee of such subsidiary undertaking);

(b)“transaction" includes any act; and

(c)the reference in paragraph (1)(b) to any limitation on directors’ powers under the company’s constitution includes any limitation deriving from these Regulations, from [F9FCA rules] or from a resolution of the company in general meeting or of a meeting of any class of shareholders.

Textual Amendments

SharesU.K.

SharesU.K.

45.—(1) An open-ended investment company may issue more than one class of shares.

(2) A shareholder may not have any interest in the scheme property of the company.

(3) The rights which attach to each share of any given class are—

(a)the right, in accordance with the instrument of incorporation, to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the scheme property;

(b)the right, in accordance with the instrument of incorporation, to vote at any general meeting of the company or at any relevant class meeting; and

(c)such other rights as may be provided for, in relation to shares of that class, in the instrument of incorporation of the company.

(4) In respect of any class of shares, the rights referred to in paragraph (3) may, if the company’s instrument of incorporation so provides, be expressed in two denominations; and in the case of any such class, one (the “smaller") denomination is to be such proportion of the other (the “larger") denomination as is fixed by the instrument of incorporation.

(5) In respect of any class of shares within paragraph (4), any share to which are attached rights expressed in the smaller denomination is to be known as a smaller denomination share; and any share to which are attached rights expressed in the larger denomination is to be known as a larger denomination share.

(6) In respect of any class of shares, the rights which attach to each share of that class are—

(a)except in respect of a class of shares within paragraph (4), equal to the rights that attach to each other share of that class; and

(b)in respect of a class of shares within that paragraph, equal to the rights that attach to each other share of that class of the same denomination.

(7) In respect of any class of shares within paragraph (4), the rights that attach to any smaller denomination share of that class are to be a proportion of the rights that attach to any larger denomination share of that class and that proportion is to be the same as the proportion referred to in paragraph (4).

Share certificatesU.K.

46.—(1) Subject to regulations 47 and 48, an open-ended investment company must prepare documentary evidence of title to its shares (“share certificates") as follows—

(a)in respect of any new shares issued by it;

(b)where a shareholder has transferred part only of his holding back to the company, in respect of the remainder of that holding;

(c)where a shareholder has transferred part only of his holding to the designated person, in respect of the remainder of that holding;

(d)where a company has registered a transfer of shares made to a person other than the company or a person designated as mentioned in sub-paragraph (c)—

(i)in respect of the shares transferred to the transferee; and

(ii)in respect of any shares retained by the transferor which were evidenced by any certificate sent to the company for the purposes of registering the transfer;

(e)in respect of any holding of bearer shares for which a certificate evidencing title has already been issued but where the certificate has been surrendered to the company for the purpose of being replaced by two or more certificates which between them evidence title to the shares comprising that holding; and

(f)in respect of any shares for which a certificate has already been issued but where it appears to the company that the certificate needs to be replaced as a result of having been lost, stolen or destroyed or having become damaged or worn out.

(2) A company must exercise due diligence and take all reasonable steps to ensure that certificates prepared in accordance with paragraph (1)(a) to (e) are ready for delivery as soon as reasonably practicable.

(3) Certificates need be prepared in the circumstances referred to in paragraph (1)(e) and (f) only if the company has received—

(a)a request for a new certificate;

(b)the old certificate (if there is one);

(c)such indemnity as the company may require; and

(d)such reasonable sum as the company may require in respect of the expenses incurred by it in complying with the request.

(4) Each share certificate must state—

(a)the number of shares the title to which is evidenced by the certificate;

(b)where the company has more than one class of shares, the class of shares title to which is evidenced by the certificate; and

(c)except in the case of bearer shares, the name of the holder.

(5) Where, in respect of any class of shares, the rights that attach to shares of that class are expressed in two denominations, the reference in paragraph (4)(a) (as it applies to shares of that class) to the number of shares is a reference to the total of—

(6)In paragraph (5)—

(a)N is the relevant number of the larger denomination shares of the class in question;

(b)n is the relevant number of the smaller denomination shares of that class; and

(c) p is the number of smaller denomination shares of that class that are equivalent to one larger denomination share of that class.

(7) Nothing in these Regulations is to be taken as preventing the total arrived at under paragraph (5) being expressed on the certificate as a single entry representing the result derived from the formula set out in that paragraph.

(8) In England and Wales [F80or Northern Ireland], a share certificate specifying any shares held by any person which is—

(a)under the common seal of the company; or

(b)authenticated in accordance with regulation 59;

is prima facie evidence of that person’s title to the shares.

(9) In Scotland, a share certificate specifying any shares held by any person which is—

(a)under the common seal of the company; or

(b)subscribed by the company in accordance with the Requirements of Writing (Scotland) Act 1995 M4;

is, unless the contrary is shown, sufficient evidence of that person’s title to the shares.

Textual Amendments

Marginal Citations

Exceptions from regulation 46U.K.

47.—F81(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Nothing in regulation 46 requires a company to prepare share certificates in the following cases.

(3) Case 1 is any case where the company’s instrument of incorporation states that share certificates will not be issued and contains provision as to other procedures for evidencing a person’s entitlement to shares.

(4) Case 2 is any case where a shareholder has indicated to the company in writing that he does not wish to receive a certificate.

(5) Case 3 is any case where shares are issued or transferred to the designated person.

(6) Case 4 is any case where shares are issued or transferred to a nominee of a recognised investment exchange who is designated for the purposes of this paragraph in the rules of the investment exchange in question.

Textual Amendments

Bearer sharesU.K.

48.  An open-ended investment company may, if its instrument of incorporation so provides, issue shares (“bearer shares") evidenced by a share certificate, or by any other documentary evidence of title for which provision is made in its instrument of incorporation, which indicates—

(a)that the holder of the document is entitled to the shares specified in it; and

(b)that no entry will be made on the register of shareholders identifying the holder of those shares.

Register of shareholdersU.K.

49.  Schedule 3 to these Regulations makes provision with respect to the register of shareholders of an open-ended investment company.

Power to close registerU.K.

F8250.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Power of court to rectify registerU.K.

51.—(1) An application to the court may be made under this regulation if—

(a)the name of any person is, without sufficient cause, entered in or omitted from the register of shareholders of an open-ended investment company;

(b)default is made as to the details contained in any entry on the register in respect of a person’s holding of shares in the company; or

(c)default is made or unnecessary delay takes place in amending the register so as to reflect the fact of any person having ceased to be a shareholder.

(2) An application under this regulation may be made by the person aggrieved, by any shareholder of the company or by the company itself.

(3) The court may refuse the application or may order rectification of the register of shareholders and payment by the company of any damages sustained by any party aggrieved.

(4) On such an application the court may decide any question necessary or expedient to be decided for rectification of the register of shareholders including, in particular, any question relating to the right of a person who is a party to the application to have his name entered in or omitted from the register (whether the question arises as between shareholders and alleged shareholders or as between shareholders or alleged shareholders on the one hand and the company on the other hand).

Share transfersU.K.

52.  Schedule 4 to these Regulations makes provision for the transfer of registered and bearer shares in an open-ended investment company.

OperationU.K.

Power incidental to carrying on businessU.K.

53.  An open-ended investment company has power to do all such things as are incidental or conducive to the carrying on of its business.

Name to appear in correspondence etc.U.K.

54.—(1) Every open-ended investment company must [F83disclose its name in characters that can be read with the naked eye in all letters of the company, in all other documents issued by the company in the course of business, and on its website.]

F84(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Particulars to appear in correspondence etc.U.K.

55.—(1) Every open-ended investment company must have the following particulars [F85disclosed in characters that can be read with the naked eye in all letters of the company, in all other documents issued by the company in the course of business, and on its websites]—

(a)the company’s place of registration;

(b)the number with which it is registered;

(c)the address of its head office; and

(d)the fact that it is an investment company with variable capital.

(2) Where, in accordance with regulation 72, the Authority makes any change of existing registered numbers in respect of any open-ended investment company then, for a period of three years beginning with the date on which the notification of the change is sent to the company by the Authority, the requirement of paragraph (1)(b) is, notwithstanding regulation 72(4), satisfied by the use of either the old number or the new.

Textual Amendments

Contracts: England and Wales [F86or Northern Ireland] U.K.

56.  Under the law of England and Wales [F87or Northern Ireland] a contract may be made—

(a)by an open-ended investment company by writing under its common seal; or

(b)on behalf of such a company, by any person acting under its authority (whether expressed or implied);

and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of such a company.

Textual Amendments

Execution of documents: England and Wales [F88or Northern Ireland] U.K.

57.—(1) Under the law of England and Wales [F89or Northern Ireland] the following provisions have effect with respect to the execution of documents by an open-ended investment company.

(2) A document is executed by a company by the affixing of its common seal.

(3) A company need not have a common seal, however, and the following provisions of this regulation apply whether it does or not.

(4) A document that is signed by at least one director and expressed (in whatever form of words) to be executed by the company has the same effect as if executed under the common seal of the company.

(5) A document executed by a company which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it is to be presumed, unless a contrary intention is proved, to be delivered upon its being executed.

(6) In favour of a purchaser, a document is deemed to have been duly executed by a company if it purports to be signed by at least one director or, in the case of a director which is a body corporate, it purports to be executed by that director; and, where it makes it clear on its face that it is intended by the person or persons making it to be a deed, it is deemed to have been delivered upon its being executed.

(7) In paragraph (6), “purchaser" means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

Textual Amendments

[F90Execution of deeds or other documents by attorney] U.K.

58.—(1) Under the law of England and Wales [F91or Northern Ireland] an open-ended investment company may, [F92by instrument executed as a deed], empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf F93....

(2) A deed executed by such an attorney on behalf of the company [F94has effect as if executed by the company.]

Textual Amendments

Authentication of documents: England and WalesU.K.

F9559.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Official seal for share certificatesU.K.

60.—(1) An open-ended investment company which has a common seal may have, for use for sealing shares issued by the company and for sealing documents creating or evidencing shares so issued, an official seal which is a facsimile of its common seal with the addition on its face of the word “ securities ”.

(2) The official seal when duly affixed to a document has the same effect as the company’s common seal.

F96(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Personal liability for contracts and deedsU.K.

61.—(1) A contract, which purports to be made by or on behalf of an open-ended investment company at a time before the coming into effect of an authorisation order in relation to that company, has effect (subject to any agreement to the contrary) as a contract made with the person purporting to act for the company or as agent for it, and he is accordingly personally liable under the contract.

(2) Paragraph (1) applies—

(a)to the making of a deed under the law of England and Wales [F97or Northern Ireland]; and

(b)to the undertaking of an obligation under the law of Scotland;

as it applies to the making of a contract.

(3) If a company enters into a transaction at any time after the authorisation order made in respect of the company has been revoked and the company fails to comply with its obligations in respect of that transaction within 21 days of being called upon to do so, the person who authorised the transaction is liable, and where the transaction was authorised by two or more persons they are jointly and severally liable, to indemnify the other party to the transaction in respect of any loss or damage suffered by him by reason of the company’s failure to comply with those obligations.

Textual Amendments

Exemptions from liability to be voidU.K.

62.—(1) This regulation applies to any provision, whether contained in the instrument of incorporation of an open-ended investment company or in any contract with the company or otherwise—

(a)which exempts any officer of the company or any person (whether or not an officer of the company) employed by the company as auditor from, or indemnifies him against, any liability which by virtue of any rule of law 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 the company; or

(b)which exempts the depositary of the company from, or indemnifies him against, any liability for any failure to exercise due care and diligence in the discharge of his functions in respect of the company.

(2) Except as provided by the following paragraph, any such provision is void.

(3) This regulation does not prevent a company—

(a)from purchasing and maintaining for any such officer, auditor or depositary insurance against any such liability; or

(b)from indemnifying any such officer, auditor or depositary against any liability incurred by him—

(i)in defending any proceedings (whether civil or criminal) in which judgment is given in his favour or he is acquitted; or

(ii)in connection with any application under regulation 63 in which relief is granted to him by the court.

Power of court to grant relief in certain casesU.K.

63.—(1) This regulation applies to—

(a)any proceedings for negligence, default, breach of duty or breach of trust against an officer of an open-ended investment company or a person (whether or not an officer of the company) employed by the company as auditor; or

(b)any proceedings against the depository of such a company for failure to exercise due care and diligence in the discharge of his functions in respect of the company.

(2) If, in any proceedings to which this regulation applies, it appears to the court hearing the case—

(a)that the officer, auditor or depositary is or may be liable in respect of the cause of action in question;

(b)that, nevertheless, he has acted honestly and reasonably; and

(c)that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused from the liability sought to be enforced against him;

the court may relieve him, either wholly or partly, from his liability on such terms as it may think fit.

(3) If any such officer, auditor or depositary has reason to apprehend that any claim will or might be made against him in proceedings to which this regulation applies, he may apply to the court for relief.

(4) The court, on an application under paragraph (3), has the same power to relieve the applicant as under this regulation it would have had if it had been a court before which the relevant proceedings against the applicant had been brought.

(5) Where a case to which paragraph (2) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant or defender ought in pursuance of that paragraph to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant or defender on such terms as to costs or otherwise as the judge may think proper.

Punishment for fraudulent tradingU.K.

64.—(1) If any business of an open-ended investment company is carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, every person who was knowingly a party to the carrying on of the business in that manner is guilty of an offence and liable—

(a)on conviction on indictment, to imprisonment not exceeding a term of [F98ten] years or to a fine or to both;

[F99(b)on summary conviction—

(i)in England and Wales, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum (or both);

(ii)in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum (or both).]

(2) This regulation applies whether or not the company has been, or is in the course of being, wound up (whether by the court or otherwise).

Textual Amendments

Power to provide for employees on cessation or transfer of businessU.K.

65.—(1) The powers of an open-ended investment company include power to make the following provision for the benefit of persons employed or formerly employed by the company, that is to say, provision in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company.

(2) The power conferred by paragraph (1) is exercisable notwithstanding that its exercise is not in the best interests of the company.

(3) The power which a company may exercise by virtue of paragraph (1) may only be exercised by the company—

(a)in a case not falling within sub-paragraph (b) or (c), if sanctioned by a resolution of the company in general meeting;

(b)[F100subject to paragraph (4)] if so authorised by the instrument of incorporation—

(i)in the case of a company that has only one director, by a resolution of that director; and

(ii)in any other case, by such resolution of directors as is required by [F9FCA rules]; or

(c)if the instrument of incorporation requires the exercise of the power to be sanctioned by a resolution of the company in general meeting for which more than a simple majority of the shareholders voting is necessary, by a resolution of that majority;

and in any case after compliance with any other requirements of the instrument of incorporation applicable to the exercise of the power.

[F101(4) A resolution of the directors is not sufficient sanction for payments to or for the benefits of directors, former directors or shadow directors.]

Textual Amendments

ReportsU.K.

Reports: preparationU.K.

66.—(1) The directors of an open-ended investment company must—

(a)prepare a report (“annual report") for each annual accounting period of the company; and

(b)subject to paragraph (2), prepare a report (“half-yearly report") for each half-yearly accounting period of the company.

(2) Where a company’s first annual accounting period is a period of less than 12 months, a half-yearly report need not be prepared for any part of that period.

F102(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Nothing in this regulation or in regulation 67 prejudices the generality of regulation 6(1).

(5) In this regulation any reference to annual and half-yearly accounting periods of a company is a reference to those periods as determined in relation to that company in accordance with [F9FCA rules].

Textual Amendments

Reports: accountsU.K.

67.—(1) The annual report of an open-ended investment company must, in respect of the annual accounting period to which it relates, contain accounts of the company.

(2) The company’s auditors must make a report to the company’s shareholders in respect of the accounts of the company contained in its annual report.

(3) A copy of the auditor’s report must form part of the company’s annual report.

Reports: voluntary revisionU.K.

68.—(1) If it appears to the directors of an open-ended investment company that any annual report of the company did not comply with the requirements of these Regulations or [F9FCA rules], they may prepare a revised annual report.

(2) Where copies of the previous report have been laid before the company in general meeting or delivered to the Authority, the revisions must be confined to—

(a)the correction of anything in the previous report which did not comply with the requirements of these Regulations or [F9FCA rules]; and

(b)the making of any necessary consequential alterations.

Textual Amendments

AuditorsU.K.

69.  Schedule 5 to these Regulations makes provision with respect to the auditors of open-ended investment companies.

Mergers and divisionsU.K.

Mergers and divisionsU.K.

70.  Schedule 6 to these Regulations makes provision with respect to mergers and divisions involving open-ended investment companies [F103other than mergers within the meaning of Article 2.1(p) of the UCITS directive].

Textual Amendments

PART IVU.K. THE AUTHORITY’S REGISTRATION FUNCTIONS

Register of open-ended investment companiesU.K.

71.—(1) The Authority must maintain a register of open-ended investment companies.

(2) The Authority may keep the register in any form it thinks fit provided that it is possible to inspect the information contained on it and to obtain a copy of that information (or any part of it) for inspection.

Companies’ registered numbersU.K.

72.—(1) The Authority must allocate to every open-ended investment company a number, which is to be known as the company’s registered number.

(2) Companies’ registered numbers must be in such form, consisting of one or more sequences of figures or letters, as the Authority may from time to time determine.

(3) The Authority may, upon adopting a new form of registered number, make such changes of existing registered numbers (including numbers allocated by the appropriate registrar) as appear to it to be necessary.

(4) A change in a company’s registered number has effect from the date on which the company is notified by the Authority of the change.

Delivery of documents to the AuthorityU.K.

73.  Any document which is required by these Regulations to be delivered to the Authority to be recorded on the register maintained pursuant to regulation 71 must be delivered in such form as the Authority may from time to time specify.

Keeping of company records by the AuthorityU.K.

74.—(1) The information contained in a document delivered to the Authority under any provision of these Regulations may be recorded and kept by it in any form it thinks fit, provided that it is possible to inspect the information and produce a copy of it F104....

[F105(2) The originals of documents delivered to the Authority under any provision of these Regulations in hard copy form must be kept for three years after they are received by the Authority, after which they may be destroyed provided the information contained in them has been recorded in the register.

(2A) The Authority is under no obligation to keep the originals of documents delivered in electronic form, provided the information contained in them has been recorded in the register.]

(3) Where a company has been dissolved, the Authority may, at any time after the expiration of two years from the date of the dissolution, direct that any records in its custody relating to the company may be removed to the Public Record Office; and records in respect of which such a direction is given must be disposed of in accordance with the enactments relating to that Office and the rules made under them.

(4) Paragraph (3) does not extend to Scotland.

[F106(5) Paragraphs (2) and (2A) apply to documents held by the Authority when this paragraph comes into force as well as to documents subsequently received.]

Textual Amendments

Inspection etc. of records kept by the AuthorityU.K.

75.—[F107(1) Any person may inspect the register kept by the Authority for the purposes of this Part of these Regulations, and may require a copy of any material on the register.

(1A) The Authority may specify the form and manner in which an application is to be made for inspection or a copy under paragraph (1).

(1B) Copies of documents required to be registered under regulation 4 must be provided in hard copy or electronic form, as the applicant requests.

(1C) The Authority is not obliged by paragraph (1B) to provide copies in electronic form of a document that was delivered to the Authority in hard copy form if the document was delivered to the Authority on or before 31st December 2006 and ten years or more elapsed between the date of delivery and the date of receipt of the first application for a copy.

(1D) Subject to paragraphs (1B) and (1C), the Authority may determine the form and manner in which copies are to be provided.

(1E) Copies provided under paragraph (1) in hard copy form must be certified as true copies unless the applicant dispenses with such certification.

(1F) Copies provided under paragraph (1) in electronic form must not be certified as true copies unless the applicant expressly requests such certification.]

(2) The right of inspection extends to the originals of documents delivered to the Authority [F108in hard copy form] only where the record kept by the Authority of the contents of the document is illegible or unavailable.

(3) [F109A copy provided under this regulation], on which is endorsed a certificate signed by a member of the Authority’s staff authorised by it for that purpose certifying that it is an accurate record of the contents of any document delivered to the Authority under these Regulations, is in all legal proceedings admissible in evidence as of equal validity with the original document and as evidence of any fact stated therein of which direct oral evidence would be admissible.

(4) No process for compelling the production of a document kept by the Authority under these Regulations is to issue from any court except with the leave of the court; and any such process must bear on it a statement that it is issued with the leave of the court.

Textual Amendments

Provision by the Authority of documents [F110in electronic form] U.K.

76.  Any requirement of these Regulations as to the supply by the Authority of a document may, if the Authority thinks fit, be satisfied by the communication by the Authority of the information [F111in electronic form].

Textual Amendments

Documents relating to Welsh open-ended investment companiesU.K.

77.—(1) This regulation applies to any document which is delivered to the Authority under these Regulations and relates to an open-ended investment company (whether already registered or to be registered) whose instrument of incorporation states that its head office is to be situated in Wales.

(2) A document to which this regulation applies may be in Welsh but must be accompanied by a certified translation into English.

(3) The requirement for a translation imposed by paragraph (2) does not apply—

(a)to documents of such description as may be specified in [F9FCA rules]; or

(b)to documents in a form prescribed in Welsh (or partly in Welsh and partly in English) by virtue of section 26 of the Welsh Language Act 1993 M5 (powers to prescribe Welsh forms).

(4) An open-ended investment company whose instrument of incorporation states that its head office is to be situated in Wales may deliver to the Authority a certified translation into Welsh of any document in English which relates to the company and which is or has been delivered to the Authority.

(5) In this regulation “certified translation" means a translation which is certified in the manner specified in [F9FCA rules] to be a correct translation.

Textual Amendments

Marginal Citations

Public notice by the Authority of receipt and issue of certain documentsU.K.

F11278.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Exclusion of deemed noticeU.K.

F11379.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART VU.K. MISCELLANEOUS

ContraventionsU.K.

80.  Any of the following persons, that is to say—

(a)a person who contravenes any provision of these Regulations; and

(b)an open-ended investment company (including any director or depositary of such a company) which contravenes any provision of [F9FCA rules],

is to be treated as having contravened rules made under [F114section 137A of the Act (FCA’s general rules)].

Textual Amendments

Offences by bodies corporate etc.U.K.

81.  Section 400 of the Act (offences by bodies corporate etc.) applies to an offence under these Regulations as it applies to an offence under the Act.

Jurisdiction and procedure in respect of offencesU.K.

82.  Section 403 of the Act (jurisdiction and procedure in respect of offences) applies to offences under these Regulations as it applies to offences under the Act.

Evidence of grant of probate etc.U.K.

83.  The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person must be accepted by the company as sufficient evidence of the grant.

[F115Disclosure under the UCITS directiveU.K.

83A.—(1) This regulation applies in relation to a disclosure made by a person who falls within paragraph (2) to comply with requirements set out in rules made by the Authority to implement Chapter VIII of the UCITS directive.

(2) The following persons fall within this paragraph—

(a)the auditor of an open-ended investment company that is a master UCITS;

(b)the depositary of an open-ended investment company that is a master UCITS;

(c)the auditor of an open-ended investment company that is a feeder UCITS;

(d)the depositary of an open-ended investment company that is a feeder UCITS; or

(e)a person acting on behalf of a person within paragraphs (a), (b), (c) or (d) above.

(3) A disclosure to which this section applies is not to be taken as a contravention of any duty to which the person making the disclosure is subject.]

Textual Amendments

Minor and consequential amendmentsU.K.

84.  The provisions mentioned in Schedule 7 to these Regulations (being minor amendments and amendments consequential on the provisions of these Regulations) have effect subject to the amendments specified in that Schedule.

Revocation etc.U.K.

85.—(1) The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 M6 (“the 1996 Regulations") are revoked.

(2) Anything done under or in accordance with the 1996 Regulations has effect as if done under or in accordance with these Regulations.

(3) Without prejudice to the generality of paragraph (2)—

(a)a body incorporated by virtue of regulation 3(1) of the 1996 Regulations is to be treated as if it had been incorporated by virtue of regulation 3(1) of these Regulations;

(b)where an application under regulation 7 of the 1996 Regulations had not been determined by the Authority at the time when this regulation comes into force, it is to be treated as if it were an application made under regulation 12 of these Regulations;

(c)the Authority’s registration functions under Part IV of these Regulations apply to any documents or records delivered to the appropriate registrar pursuant to regulation 4 of, and Schedule 1 to, the 1996 Regulations.

Marginal Citations

Greg Pope

Clive Betts

Two of the Lords Commissioners of Her Majesty’s Treasury

Yn ôl i’r brig

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