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Status: You are viewing the version of the handbook as on 2005-06-30.

CIS 12.5 Umbrella schemes

Qualification for authorisation

CIS 12.5.1R
  1. (1)

    A proposed ICVCumbrella scheme does not qualify for an authorisation order unless each constituent sub-fund would, if it were the subject of a separate application for an authorisation order, qualify for such an authorisation order.

  2. (2)

    A proposed ICVC that is intended to be an umbrella scheme which is to have a sub-fund which would, if it were a separate ICVC, be a geared futures and options scheme or a property scheme does not qualify for an authorisation order unless each of its proposed sub-funds would, if it were a separate ICVC, be an ICVC of the same category as each of the other sub-funds of the proposed ICVC.

  3. (3)

    A unit trust scheme does not qualify to be authorised as an umbrella scheme unless each constituent part would, if it were the subject of a separate application for an authorisation order, qualify for separate authorisation by such an order.

Base currency

CIS 12.5.2R

Any reference in these CISrules to "base currency" that relates to:

  1. (1)

    a valuation of a sub-fund; or

  2. (2)

    the price of a unit in respect of a sub-fund; or

  3. (3)

    a payment for a unit;

is to be treated as if the reference were to the currency stated in the prospectus as being the currency to be used for the purpose in question in relation to that sub-fund.

Allocation of scheme property

CIS 12.5.3R

In so far as any of the scheme property of an ICVC or an AUT that is an umbrella scheme, or any assets to be received as part of the scheme property, or any costs, charges or expenses to be paid out of the scheme property, are not attributable to one sub-fund only, the scheme property, assets, costs, charges or expenses must be allocated between the sub-funds in a manner which is fair to the holders of the umbrella scheme generally.

Income

CIS 12.5.4R

Except in the case of CIS 9.2.1 R (Accounting period) and CIS 9.2.2 R (Annual income allocation date), CIS 9 applies as if each sub-fund were a separate ICVC or AUT (whichever is appropriate).

An ICVC with only one sub-fund

CIS 12.5.5R
  1. (1)

    If for a period of 24 consecutive months starting at any time after the first issue of a share of an ICVC which is an umbrella scheme, shares of less than two sub-funds are in issue, the directors must take such action as is necessary to change the category of the ICVC or to cause shares of more than one sub-fund to be in issue.

  2. (2)

    If (1) becomes, or is reasonably expected by the directors to become, applicable, the ACD must, before or immediately upon the expiration of the 24 month period, notify the shareholders and the FSA of any action proposed in order to comply with (1).

  3. (3)

    Paragraph (1) does not apply if, on or before the expiration of the 24 month period, winding up of the ICVC has commenced.

Other sourcebook provisions relating to umbrella schemes

CIS 12.5.6G

Rules and some of the guidance elsewhere in this sourcebook relate specifically to umbrella schemes. For ease of understanding the main provisions are referred to in CIS 12.5.8 G.

Investment and borrowing powers

CIS 12.5.7R
  1. (1)

    In relation to an authorised fund which is an umbrella scheme under the rules in CIS 5A, the provisions in CIS 5A apply to each sub-fund as they would for an authorised fund except the following rules which will apply only at the level of the umbrella scheme:

    1. (a)

      CIS 5A.2.13 R (Significant influence for ICVCs);

    2. (b)

      CIS 5A.2.14 R (Significant influence for managers of AUTs); and

    3. (c)

      CIS 5A.2.15 R (Concentration), but sub-funds in an umbrella scheme which are equivalent to a fund of funds scheme or a feeder fund are to be disregarded in this calculation.

  2. (2)

    In relation to an authorised fund which is an umbrella scheme under the rules in CIS 5, the provisions in CIS 5 apply to each sub-fund as they would for an authorised fund, except the following rules which will apply at the level of the umbrella scheme:

    1. (a)

      CIS 5.2.29 R (Significant influence for ICVCs);

    2. (b)

      CIS 5.2.30 R (Significant influence for managers of AUTs); and

    3. (c)

      CIS 5.2.31 R (Concentration).1

CIS 12.5.8G

Main provisions relating specifically to umbrella schemes.

This table belongs to CIS 12.5.6 G.

Rule / Guidance (CIS)

Subject matter

2.4.5A G(2)

What are limited issue shares?

2.4.5B R(3)

Limited issue shares: requirements

2.4.6R(2)

Rights of shareclasses

2.6.3G(2)

What are limited issue units?

2.6.4R(3)

Limited issue units: requirements

3.5.2R(24)

Information to be contained in the prospectus (umbrella schemes)

4.4.3R(1)

Authorised fund manager's obligation to sell

4.7.4R(2)

Forward and historic pricing (single-pricing)

5.1.4(3)G

Investment in collective investment schemes

Table 5.1.6G Note 2

Investment powers

5A.2.12R

Investment in other Collective Investment Schemes

5A.2.16G

Significant influence and concentration

5A.12R

General investment powers and restrictions

8.2.8R

Fee payable on switching

10.3.3(2) and (3)R; 10.3.4(2) & (3)R;

Annual and half-yearly reports

10.4.2(15) and (16)R and 10.4.3R

Report of the directors/manager

10.4.8R

Report of the auditor

10.5.2R(3)

Publication of reports

11.5.2R

Schemes of arrangement

13.1.3R(9)

Suspension and resumption of dealings

14.3R

Termination of a sub-fund

15.4.3R

Manager's obligation to sell

15.7.4R

Forward and historic pricing (dual-pricing)1