PART 4GENERAL PROVISIONS

Withdrawal of accreditationI115

1

The Secretary of State must withdraw the CDFI’s accreditation—

a

with effect from the time of the failure, where the CDFI fails to satisfy the terms of regulation 8;

b

subject to paragraph (2), where the CDFI makes a direct or indirect investment in residential property from the investment fund; and

c

subject to paragraph (3), where the CDFI fails to make an annual report within 12 months of the date on which it was due under paragraph (1) of regulation 13.

2

Paragraph (1)(b) does not apply where—

a

the CDFI can demonstrate that to the best of its knowledge and belief it had not invested in residential property, and

b

the CDFI divested itself of the investment within three months of—

i

the date it discovered that the investment was in residential property, or

ii

the date of receipt of a notice from the Small Business Service that the investment is in residential property,

whichever is the earlier.

3

Paragraph (1)(c) does not apply if in the opinion of the Investment Director the CDFI had reasonable excuse for failing to make an annual return.

4

A withdrawal of an accreditation must be given by notice by the Secretary of State specifying the date from which accreditation is withdrawn and the reasons for the withdrawal.

5

The CDFI must within 30 days of receiving notice under paragraph (4) of withdrawal of accreditation give notice to each of the investors to which it has issued a tax relief certificate in respect of investments made within the specified period stating that accreditation has been withdrawn and specifying the date from which accreditation is withdrawn.

6

For the purpose of paragraph (5) “specified period” means the five years immediately preceding the date from which accreditation is withdrawn.