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

CIS 7.3 Functions of the ACD

CIS 7.3.1R
  1. (1)

    This rule (CIS 7.3.1 R) does not apply at any time when the ACD is the sole director of the ICVC.

  2. (2)

    The ACD must carry out such functions as are necessary in order to ensure compliance with the rules in this sourcebook that impose obligations upon the ICVC or the ACD. The ACD's duties under this paragraph are not restricted by (3).

  3. (3)

    The functions to be carried out by the ACD include:

    1. (a)

      making decisions as to the constituents of the scheme property of the ICVC in accordance with the investment objectives and policy of the ICVC;

    2. (b)

      instructing the depositary from time to time in writing how rights attaching to the ownership of the scheme property are to be exercised, but not in any case where, under CIS 7.4.5 R (Exercise of rights in respect of the scheme property), the depositary has the right to exercise (or not exercise) voting rights after consultation with the directors;

    3. (c)

      taking all reasonable steps, and exercising due diligence, to ensure that the shares in the ICVC are priced in accordance with CIS 4 (Single-pricing and dealing);

    4. (d)

      taking action immediately to rectify any breach of CIS 4 and, where the breach relates to the incorrect pricing of shares or to the late payment in respect of the issue of shares, rectification must, unless the depositary otherwise directs, extend to the reimbursement or payment, or arranging the reimbursement or payment, of money:

      1. (i)

        by the ACD to shareholders and former shareholders;

      2. (ii)

        by the ACD to the ICVC; or

      3. (iii)

        by the ICVC to the ACD;

      but rectification need not, unless the depositary otherwise directs, extend to any such reimbursement or payment where it appears to the depositary that the incorrect pricing, or late payment in respect of issue, is of minimal significance; and

    5. (e)

      ensuring that the ICVC complies with the obligations imposed by, and, when appropriate, exercises the powers provided by, the following provisions of the OEIC regulations:

      1. (i)

        21 : (The Authority's approval for certain changes in respect of ICVC);

      2. (ii)

        36 : (Inspection of directors' service contracts);

      3. (iii)

        46 : (Share certificates), subject to regulation 47 (exceptions from regulation 46);

      4. (iv)

        48 : (Bearer shares);

      5. (v)

        50 : (Power to close register);

      6. (vi)

        54(1) : (Name to appear in correspondence etc);

      7. (vii)

        55 : (Particulars to appear in correspondence etc);

      8. (viii)

        Schedule 3 : (Register of shareholders) excluding paragraph 12 of Schedule 4; and

      9. (ix)

        Schedule 4: (Share transfers).

Valuation and pricing : for ICVCs

CIS 7.3.2G

For the purposes of CIS 7.3.1 R (3)(c)and (d), CIS 7 Annex 1 G contains guidance on the valuation and pricing of authorised funds, including:

  1. (1)

    pricing controls and the valuation of the scheme property;

  2. (2)

    recording and reporting of incorrect pricing; and

  3. (3)

    procedures to be adopted following incorrect prices, including action that should be taken to rectify any breach.

Maintenance of records

CIS 7.3.3R
  1. (1)

    The ACD must make and retain such accounting and other records for the ICVC as are necessary:

    1. (a)

      to enable the ICVC to comply with the OEIC regulations and the rules in this sourcebook; and

    2. (b)

      to demonstrate at any time that such compliance has been achieved.

  2. (2)

    The ACD must make and retain for a period of six years from the date each record is made a daily record of the shares in the ICVC held, acquired or disposed of by the ACD, including the classes of such shares, and of the balance of any acquisitions and disposals.1

  3. (3)

    Unless the policy of the ACD stated in the prospectus is neither to require a dilution levy nor to make a dilution adjustment, it must make and retain for a period of six years from the date each record is made a daily record of:

    1. (a)

      how it calculates and estimates dilution; and

    2. (b)

      its policy and method for determining the amount of any dilution levy or dilution adjustment.1

Maintenance of capital

CIS 7.3.4R

If, at any time after the size of the ICVC's capital (as provided for the purposes of sub-paragraph 4(1)(c) of Schedule 2 to the OEIC regulations in paragraph 4(2) of that Schedule) has reached the minimum size provided in its instrument of incorporation, the size of that capital either falls below that minimum or exceeds the maximum size provided in the instrument of incorporation, the ACD must immediately notify the FSA of that fact.