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CIS 8.3 Restrictions and other requirements relating to payments: ICVCs

Promotional payments

CIS 8.3.1R

No payment or benefit, other than a payment or benefit to the ACD not prohibited by any other of the rules in this sourcebook, may be made out of or given at the expense of the scheme property to any person in consideration of that person acquiring (whether directly, indirectly, absolutely or conditionally) or promoting the sale of, or agreeing so to acquire or to promote the sale of, shares in the ICVC.

Performance fees

CIS 8.3.2R

No payment may be made out of the scheme property of an ICVC and no redemption charge may be made if the amount or frequency of the payment or the amount of the redemption charge is intended to depend upon fluctuations in:

  1. (1)

    the value of the scheme property; or

  2. (2)

    the income attributable to it; or

  3. (3)

    the price of a share of any class,

as compared with fluctuations in the value or price of property of any description or in an index or other factor designated for the purpose.

Movable and immovable property

CIS 8.3.3R

An ICVC (other than a property scheme) must not incur any expense for the use by it of any movable or immovable property except to the extent that such property is necessary for the direct pursuit of its business.

Set up costs

CIS 8.3.4R
  1. (1)

    When (2) applies, costs of the authorisation and incorporation of an ICVC and of its initial offer or issue of shares (or initial offer or issue of shares in respect of a sub-fund) may, subject to CIS 8.3.1 R (Promotional payments), be amortised over a period not exceeding five years.

  2. (2)

    Amortisation under (1) is only permitted if, on or before 30 November 2000, it had commenced and been disclosed in the prospectus.

Allocation of payments to capital or income

CIS 8.3.5R
  1. (1)

    Any broker'scommission, fiscal charges and other disbursements, which are necessary to be incurred in effecting transactions for the ICVC, and normally shown in contract notes, confirmation notes or difference accounts, may be charged to the capital account.

  2. (2)

    Any:

    1. (a)

      interest on borrowings and charges incurred in effecting, terminating, negotiating or varying the terms of borrowings;

    2. (b)

      taxation and duties payable in respect of scheme property; and

    3. (c)

      costs of the types described in CIS 8.3.4 R (Set up costs);

    may be paid from capital property or income property as the ICVC considers appropriate.

  3. (3)

    All other payments out of the scheme property must be made from income property in the first instance, but a transfer of the debit item from the income account to the capital account may be made if the expense is considered to be capital in nature.

  4. (4)

    The ACD and the depositary may agree that all or any part so agreed of:

    1. (a)

      any payments permitted by CIS 8.2.3 R (Payments by an ICVC to the ACD); and

    2. (b)

      any other charges and expenses of the ICVC;

    may be treated as a capital expense and, if met from the income account in the first instance, a transfer of the relevant debit made from the income account to the capital account.