The Individual Savings Account Regulations 1998

General investment rules U.K.

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

(a) in the case of units in authorised unit trusts and parts of umbrella schemes, at the price for issue of units, within the meaning, and complying with the requirements, of regulation 4.16 of the Financial Services (Regulated Schemes) Regulations 1991 M1 ;

(b) in the case of shares in an open-ended investment company, at the price of a share within the meaning of regulation 4.08 of the Financial Services (Open-Ended Investment Companies) Regulations 1997 M2 ; and

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

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

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

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

(b) be purchased from—

(i) an account investor, or

(ii) the spouse of an account investor,

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

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

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

(ii) in the case where the account manager is [F1 the Director of Savings], an account with [F1 the Director of Savings],

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

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

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

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

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

Textual Amendments

F1 Words in reg. 6(4)(ii) substituted (6.4.1999) by The Individual Savings Account (Amendment) Regulations 1998 (S.I. 1998/3174), regs. 1, 4

Marginal Citations

M1 Made by the Securities and Investments Board (Release 148) under powers to make regulations in sections 52, 81, 85 to 88 and 90 of the Financial Services Act 1986 (c.60), transferred from the Secretary of State to the Securities and Investments Board by the Financial Services Act 1986 (Delegation) (No. 2) Order 1988 (S.I. 1988/738) and the Financial Services Act 1986 (Delegation) (No. 2) Order 1991 (S.I. 1991/1256).

M2 Made by the Securities and Investments Board (Release 168) under powers to make regulations in sections 81 and 85 of the Financial Services Act 1986, transferred from the Secretary of State to the Securities and Investments Board by the Financial Services Act 1986 (Delegation) (No. 2) Order 1988 (S.I. 1988/738) and the Financial Services Act 1986 (Delegation) (No. 2) Order 1991 (S.I. 1991/1256), and extended by the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 (S.I. 1996/2827).