CIS 2.1 Introduction

1. (1)

   The persons to whom each respective rule and guidance in this chapter applies, are stated either at the beginning of the rule or guidance or at the beginning of the section that contains the rule or guidance.

2. (2)

   However, to assist the understanding of this chapter, CIS 2.1.5 G indicates which provisions in this chapter are relevant for ICVCs and which are relevant for AUTs.

This chapter assists in achieving the regulatory objective of protecting consumers (as envisaged by section 2 and 5 of the Act). In particular, this chapter:

1. (1)

   lays down some requirements about provisions which must be included in the instrument of incorporation of each ICVC and in the trust deed of every AUT resulting in a similar degree of protection for all investors in an ICVC or in an AUT;

2. (2)

   lays down the types to only one of which each authorised fund must belong (see CIS 2.1.4 R); 1

3. (3)

   provides rules which deal with the classes of shares (in ICVCs) and units (in AUTs) which may be issued and sold to investors; those rules will ensure that investors in each class are treated equally and fairly;

4. (4)

   provides rules and guidance on the inclusion of the word "guaranteed" or anything implying a degree of capital security in the name of an authorised fund.

1. (1)

   Schemes within CIS 2.1.4 R (1) are UCITS schemes complying with CIS 5 which sets out the extended investment powers available under UCITS Amending Directive 2001/108/EC.

2. (2)

   Schemes within CIS 2.1.4 R(2), (7), and umbrella schemes consisting of sub-funds equivalent to CIS 2.1.4 R(2), (7) type schemes are also UCITS schemes but they must comply with the investment rules in CIS 5A. Such schemes may convert to the CIS 2.1.4 R (1) type at any time, however, they must so convert within the timescales set out in transitional provision 14.

3. (3)

   Schemes within CIS 2.1.4 R(3) - (6), (8), (9) and type (10) where it is a non-UCITS compliant scheme are non-UCITS schemes. The investment rules in CIS 5A apply and transitional provision 14 has no application to them.1