The Authorised Investment Funds (Tax) Regulations 2006

[F1 The genuine diversity of ownership condition U.K.

Textual Amendments

F1 Pt. 4A inserted (6.4.2008) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705), regs. 1, 5

The genuine diversity of ownership condition U.K.

69J.— (1) The genuine diversity of ownership condition is that the open-ended investment company must meet conditions A to F throughout the accounting period.

This is subject to paragraphs (8) and (9).

(2) Condition A is that the company’s instrument of incorporation and prospectus in issue for the time being—

(a) contain a statement that shares in the company will be widely available, and

(b) specify the intended categories of investor.

(3) Condition B is that the specification of intended categories of investor referred to in paragraph (2)(b) does not have the effect of limiting the intended investors to a limited number of specific persons or specific groups of connected persons.

(4) Condition C is that shares in the company—

(a) must be marketed and made available sufficiently widely to reach the intended categories of investors, and

(b) must be marketed and made available in a manner appropriate to attract those categories of persons.

(5) Condition D is—

(a) that a person may easily acquire shares in the company, and may acquire the shares in the same way as a person may acquire shares or units in other authorised investment funds that are widely available, or

(b) in the case of a qualified investor scheme, that a person qualified to invest may, without difficulty, obtain information about the company and acquire shares in it.

(6) Condition E is that the minimum investment is not unreasonably high in view of the risk profile of the company or the intended categories of investors.

(7) Condition F is that, in comparison with charges imposed on larger investors, charges imposed on smaller investors will not be greater than is commercially normal and reasonable.

(8) The open-ended investment company meets the genuine diversity of ownership condition if—

(a) an investor in the company is a unit trust scheme (a “feeder fund”), and

(b) paragraphs (2) to (7) are met in relation to the company after taking into account the intended investors in the feeder fund.

(9) If paragraph (8) applies—

(a) the open-ended investment company and the feeder fund must have the same manager (or proposed manager),

(b) a notice under regulation 69O must be accompanied by the feeder fund’s trust deed and prospectus in issue, and

(c) paragraphs (7) and (8) of regulation 69P apply in relation to the feeder fund’s trust deed and prospectus as they apply to the open-ended investment company’s instrument of incorporation and prospectus (or, as the case may be, to the proposed company’s instrument of incorporation and prospectus).

(10) For the purposes of this regulation—

(a) sections 993 and 994 of ITA 2007 (connected persons) apply in the case of a person chargeable to income tax, and

(b) section 839 of ICTA (connected persons) applies in the case of a person chargeable to corporation tax.]