1.Neither:
an investment company, nor
a management company or depositary acting on behalf of a unit trust,
may borrow.
However, a UCTIS may acquire foreign currency by means of a ‘back-to-back’ loan.
2.By way of derogation from paragraph 1, a Member State may authorize a UCITS to borrow:
(a)up to 10 %
(a)of its assets, in the case of an investment company, or
of the value of the fund, in the case of a unit trust,
provided that the borrowing is on a temporary basis;
(b)up to 10 % of its assets, in the case of an investment company, provided that the borrowing is to make possible the acquisition of immovable property essential for the direct pursuit of its business; in this case the borrowing and that referred to in subparagraph (a) may not in any case in total exceed 15 % of the borrower's assets.
1.A UCITS must re-purchase or redeem its units at the request of any unit-holder.
2.By way of derogation from paragraph 1:
(a)a UCITS may, in the cases and according to the procedures provided for by law, the fund rules or the investment company's instruments of incorporation, temporarily suspend the re-purchase or redemption of its units. Suspension may be provided for only in exceptional cases where circumstances so require, and suspension is justified having regard to the interests of the unit-holders;
(b)the Member States may allow the competent authorities to require the suspension of the re-purchase or redemption of units in the interest of the unit-holders or of the public.
3.In the cases mentioned in paragraph 2 (a), a UCITS must without delay communicate its decision to the competent authorities and to the authorities of all Member States in which it markets its units.
The rules for the valuation of assets and the rules for calculating the sale or issue price and the re-purchase or redemption price of the units of a UCITS must be laid down in the law, in the fund rules or in the investment company's instruments of incorporation.
The distribution or reinvestment of the income of a unit trust or of an investment company shall be effected in accordance with the law and with the fund rules or the investment company's instruments of incorporation.
A UCITS unit may not be issued unless the equivalent of the net issue price is paid into the assets of the UCITS within the usual time limits. This provision shall not preclude the distribution of bonus units.
1.Without prejudice to the application of Articles 19 and 21, neither:
an investment company, nor
a management company or depositary acting on behalf of a unit trust
may grant loans or act as a guarantor on behalf of third parties.
[F12. Paragraph 1 shall not prevent such undertakings from acquiring transferable securities, money market instruments or other financial instruments referred to in Article 19(1)(e), (g) and (h) which are not fully paid.]
Textual Amendments
F1 Substituted by Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), with regard to investments of UCITS.
Neither:
an investment company, nor
a management company or depositary acting on behalf of a unit trust
may carry out uncovered sales of transferable securities, money market instruments or other financial instruments referred to in Article 19(1)(e), (g) and (h).]
Textual Amendments
F1 Substituted by Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), with regard to investments of UCITS.
The law or the fund rules must prescribe the remuneration and the expenditure which a management company is empowered to charge to a unit trust and the method of calculation of such remuneration.
The law or an investment company's instruments of incorporation must prescribe the nature of the cost to be borne by the company.