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COLL 4.5 Reports and accounts

Application

COLL 4.5.1 R RP

The rules and guidance in this section apply to an authorised fund manager, a depositary and any other director of an ICVC.

Explanation

COLL 4.5.2 G RP

In order to provide the unitholders with regular and relevant information about the progress of the authorised fund, the authorised fund manager must:

  1. (1)

    prepare a short report and a long report half-yearly and annually;

  2. (2)

    send the short report to all unitholders; and

  3. (3)

    make the long report available to unitholders on request.

Preparation of long and short reports

COLL 4.5.3 R RP
  1. (1)

    The authorised fund manager must for each annual accounting period and half-yearly accounting period, prepare a short report and a long report for a scheme.

  2. (2)

    For a scheme which is an umbrella, the authorised fund manager must prepare a short report for each sub-fund but this is not necessary for the umbrella as a whole.

  3. (3)

    Where the first annual accounting period of a scheme is less than 12 months, a half-yearly report need not be prepared.

  4. (4)

    [deleted]1

ICVC requirements

COLL 4.5.4 G RP
  1. (1)

    The OEIC Regulations contain requirements for the preparation of annual and half-yearly reports and make the directors of an ICVC responsible for the preparation of annual and half-yearly reports on the ICVC.

  2. (2)

    Regulations 66 (Reports: preparation), 67 (Reports: accounts) and 68 (Reports: voluntary revision) of the OEIC Regulations also contain a number of other requirements relating to reports and accounts of an ICVC.

Contents of a short report

COLL 4.5.5 R
  1. (1)

    The short report for an authorised fund, or for a scheme which is an umbrella, its sub-fund, must contain for the relevant period:

    1. (a) 4
      1. (i)

        the name of the scheme or sub-fund;4

      2. (ii)

        its stated investment objectives and the policy and strategy pursued for achieving those objectives;4

      3. (iii)

        4a brief assessment of its risk profile;

      4. (iv)

        in the case of a UCITS scheme, the figure for the synthetic risk and reward indicator disclosed in its most up-to-date key investor information document and any subsequent changes to that figure during that period; and4

      5. (v)

        the name and address of the authorised fund manager;4

    2. (b)

      a review of the scheme or sub-fund's investment activities and investment performance during the period;

    3. (c)

      a performance record consistent with COLL 4.5.10R (1) (Comparative table) so as to enable a unitholder to put into context the results of the investment activities of the scheme during the period;

    4. (d)

      sufficient information to enable unitholders to form a view on where the portfolio is invested at the end of the period and the extent to which that has changed over the period;

    5. (e)

      any other significant information which would reasonably enable unitholders to make an informed judgement on the activities of the scheme or sub-fund during the period and the results of those activities at the end of the period; and

    6. (f)

      a statement that the latest long report is available on request.

  2. (1A)

    4The short report of a UCITS scheme which is a feeder UCITS must also include:

    1. (a)

      in relation to each annual accounting period only,7 a statement on the aggregate charges of the feeder UCITS and the master UCITS;

    2. (b)

      a description of how the annual and half-yearly long reports of its master UCITS can be obtained; and

    3. (c)

      where the master UCITS is a UCITS scheme, a description of how its annual and half-yearly short reports can be obtained.

    [Note: article 63(2) of the UCITS Directive]4

  3. (1B)

    7The short report of a feeder NURS must also include:

    1. (a)

      in relation to each annual accounting period only, a statement on the aggregate charges of the feeder NURS and its qualifying master scheme;

    2. (b)

      a description of how the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme can be obtained; and

    3. (c)

      where the qualifying master scheme is a UCITS scheme or non-UCITS retail scheme, a description of how the annual and half-yearly short reports of its qualifying master scheme can be obtained.

  4. (2)

    The authorised fund manager must take reasonable steps to ensure that the short report is structured and written in such a way that it can be easily understood by the average investor.

  5. (3)

    The short report must form a separate stand-alone document which must not include any extraneous material.

  6. (4)

    The inclusion in a single document of the short reports of more than one of an authorised fund manager's schemes with the same accounting periods, or of more than one sub-fund in an umbrella, is not a contravention of (3) if each such report is discrete and easily identifiable.

  7. (5)

    The authorised fund manager must ensure that the information given in the short report is consistent with the long report for the relevant accounting period prepared under COLL 4.5.7 R (Contents of the annual long report) or COLL 4.5.8 R(Contents of the half-yearly long report).

Significant information to be contained in the short report

COLL 4.5.6 G

For the purpose of COLL 4.5.5R (1)(d) and COLL 4.5.5R (1)(e) the authorised fund manager should consider including the following as sufficient and significant information:

  1. (1)

    particulars of any fundamental change to the scheme which required unitholder approval by meeting during the period;

  2. (2)

    particulars of any significant change to the operation of the scheme requiring pre-notification, but this need only be given if the change impacts on the unitholders' ability to make an informed judgement on the activities of the scheme;

  3. (3)

    particulars of any other developments in relation to the investment policy and strategy 3of the scheme,3 or the instruments used by it during the period;

  4. (4)

    the total expense ratio at the end of the period4 or, in the case of a UCITS scheme, the ongoing charges figure together with (where appropriate) any performance-related fee payable to the authorised fund manager or any investment adviser;6

  5. (5)

    particulars of any qualification of the reports of the auditor and depositary; and

  6. (6)

    particulars of any income or distribution relating to the period.

Contents of the annual long report

COLL 4.5.7 R RP

  1. (1)

    An annual long report on an authorised fund, other than a scheme which is an umbrella, must contain:

    1. (a)

      the

      3

      accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;

    2. (b)

      the report of the authorised fund manager in accordance with COLL 4.5.9 R (Authorised fund manager's report);

    3. (c)

      comparative information12 in accordance with COLL 4.5.10 R (Comparative information12);

      1212
    4. (d)

      the report of the depositary in accordance with COLL 4.5.11 R (Report of the depositary); and

    5. (e)

      the report of the auditor in accordance with COLL 4.5.12 R (Report of the auditor).

  2. (2)

    An annual long report on a scheme which is an umbrella must be prepared for the umbrella as a whole and2 must contain:

    1. (a)

      for each sub-fund:

      1. (i)

        the

        3

        accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;

      2. (ii)

        the report of the authorised fund manager in accordance with COLL 4.5.9 R; and

      3. (iii)

        comparative information12 in accordance with COLL 4.5.10 R;

        12
    2. (b)

      [deleted]12

      12
    3. (c)

      the report of the depositary in accordance with COLL 4.5.11 R; and

    4. (d)

      the report of the auditor in accordance with COLL 4.5.12 R.

  3. (3)

    The directors of an ICVC or the authorised fund manager9 of an AUT or ACS9 must ensure that the accounts referred to in (1)(a),2 (2)(a) and (4)(a)2 give a true and fair view of the net

    923

    revenue

    3

    and the net capital

    3

    gains

    3

    or

    3

    losses on the scheme property of the authorised fund, or, in the case of (2)(a) and (4)(a)2, the sub-fund, for the annual accounting period in question and the financial position of the authorised fund or sub-fund as at the end of that period.

  4. (4)

    The authorised fund manager of a scheme which is an umbrella may, in addition to complying with (2), prepare a further annual long report for any one or more individual sub-funds of the scheme, in which case it must contain:2

    1. (a)

      in relation to the sub-fund:2

      1. (i)

        the

        3

        accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;2

      2. (ii)

        the report of the authorised fund manager in accordance with COLL 4.5.9 R; and2

      3. (iii)

        comparative information12 in accordance with COLL 4.5.10 R;2

        12
    2. (b)

      the report of the depositary in accordance with COLL 4.5.11 R; and2

    3. (c)

      the report of the auditor in accordance with COLL 4.5.12 R.2

  5. (5)

    4An annual long report of a UCITS scheme which is a feeder UCITS must also include:

    1. (a)

      a statement on the aggregate charges of the feeder UCITS and the master UCITS; and

    2. (b)

      a description of how the annual long report of its master UCITS can be obtained.

[Note: article 63(2) of the UCITS Directive]4

  1. (6)

    An annual long report of a feeder NURS must also include:7

    1. (a)

      a statement on the aggregate charges of the feeder NURS and its qualifying master scheme; and7

    2. (b)

      a description of how the annual long report (or nearest equivalent document for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme can be obtained.7

  2. (7)

    13An annual long report of a UCITS scheme must also include:

    1. (a)
      1. (i)

        the total amount of remuneration paid by the authorised fund manager to its staff for the financial year, split into fixed and variable remuneration;

      2. (ii)

        the number of beneficiaries; and

      3. (iii)

        where relevant, any amount paid directly by the UCITS scheme itself, including any performance fee;

    2. (b)

      the aggregate amount of remuneration broken down by categories of UCITS Remuneration Code staff;

    3. (c)

      a description of how the remuneration and the benefits have been calculated;

    4. (d)

      the outcome of the reviews referred to in SYSC 19E.2.7R(1) and SYSC 19E.2.8R, including any irregularities that have occurred; and

    5. (e)

      details of any material changes to the adopted remuneration policy since the previous annual long report was prepared.

    [Note: article 69(3) second paragraph of the UCITS Directive]

COLL 4.5.7A G RP
  1. (1)

    13The FCA recognises that the annual long report, including the remuneration related disclosures in COLL 4.5.7R(7), may be required to be made available to unitholders before the completion of the authorised fund manager’s first annual performance period in which it has to comply with the UCITS Remuneration Code.

  2. (2)

    Under (1), the FCA expects the authorised fund manager to make best efforts to comply with COLL 4.5.7R(7) to the extent possible.

  3. (3)

    The authorised fund manager, having made best efforts to achieve compliance with COLL 4.5.7R(7), may omit to disclose information relating to remuneration where the information:

    1. (a)

      is not available to the authorised fund manager for the relevant annual accounting period; or

    2. (b)

      is available but will not provide materially relevant, reliable, comparable and clear information to unitholders about the remuneration policy of the authorised fund manager, as it affects the particular UCITS scheme.

  4. (4)

    Where disclosure is omitted, the authorised fund manager should explain the basis for that omission.

Additional information that may need to be included in the annual and half-yearly long report of a UCITS scheme

COLL 4.5.8-A G

11The annual and half-yearly long reports of a UCITS scheme may be required to contain additional matters not referred to in COLL 4.5.7 R and COLL 4.5.8 R, such as those required by the ESMA Guidelines on ETFs and other UCITS issues, which can be found at http://www.esma.europa.eu/system/files/2012-832en_guidelines_on_etfs_and_other_ucits_issues.pdf.

Contents of the half-yearly long report

COLL 4.5.8 R RP

  1. (1)

    A half-yearly long report on an authorised fund, other than for a scheme which is an umbrella, must contain:

    1. (a)

      the

      3

      accounts for the half-yearly accounting period which must be prepared in accordance with the requirements of the IMA SORP; and

    2. (b)

      the report of the authorised fund manager in accordance with COLL 4.5.9 R (Authorised fund manager's report).

  2. (2)

    A half-yearly long report on a scheme which is an umbrella must be prepared for the umbrella as a whole and2 must contain:

    1. (a)

      for each sub-fund:

      1. (i)

        the 2

        3

        accounts for the half-yearly accounting period2 which must be prepared in accordance with the requirements of the IMA SORP; and

        2
      2. (ii)

        the report of the authorised fund manager in accordance with COLL 4.5.9 R; and

    2. (b)

      [deleted]12

      12
  3. (3)

    The authorised fund manager of a scheme which is an umbrella may, in addition to complying with (2), prepare a further half-yearly long report for any one or more individual sub-funds of the scheme. Such reports must contain the

    3

    accounts and the report of the authorised fund manager that would be required by (1) if the sub-fund were a separate authorised fund.2

  4. (4)

    4The half-yearly long report of a UCITS scheme which is a feeder UCITS must also include a description of how the half-yearly and annual reports of its master UCITS can be obtained.

[Note: article 63(2) second subparagraph of the UCITS Directive]

  1. (5)

    The half-yearly long report of a feeder NURS must also include a description of how the half-yearly and annual long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme can be obtained.7

2Annual and half-yearly long reports for sub-funds of an umbrella

COLL 4.5.8A G RP

2The authorised fund manager may, but need not, prepare annual and half-yearly long reports for any individual sub-fund of an umbrella in accordance with COLL 4.5.7R (4) and COLL 4.5.8R (3) and make them available on request to any unitholder investing in the relevant sub-fund. However, if the authorised fund manager does so, this does not relieve it of its duty:

  1. (1)

    to prepare annual and half-yearly long reports on the umbrella as a whole (COLL 4.5.7R (2) and COLL 4.5.8R (2)); and

  2. (2)

    to make available and publish the annual and half-yearly long reports for the umbrella as a whole (COLL 4.5.14 R).

Signing of annual and half-yearly reports

COLL 4.5.8B R RP

3The annual reports in COLL 4.5.7R (1) and (2), and the half-yearly reports in COLL 4.5.8R (1) and (2), must:

  1. (1)

    in the case of an ICVC, if there is:

    1. (a)

      more than one director, be approved by the board of directors and signed on their behalf by the ACD and at least one other director; or

    2. (b)

      no director other than the ACD, be signed by the ACD;

  2. (2)

    in the case of an AUT or ACS9, if the authorised fund manager has:

    1. (a)

      more than one director, be signed by at least two directors of the authorised fund manager; or

    2. (b)

      only one director, be signed by the director of the authorised fund manager.

Authorised fund manager's report

COLL 4.5.9 R RP

The matters set out in (1) to (13)2 must be included in any authorised fund manager's report, except where otherwise indicated:

2
  1. (1)

    the names and addresses of :

    1. (a)

      the authorised fund manager;

    2. (b)

      the depositary;

    3. (c)

      the registrar;

    4. (d)

      any investment adviser;

    5. (e)

      the auditor; and

    6. (f)

      for a scheme which invests in immovables, the standing independent valuer;

  2. (2)

    (for an ICVC), the names of any directors other than the ACD;

  3. (3)

    a statement of the authorised status of the scheme;

  4. (4)

    (for an ICVC) a statement that the unitholders of the ICVC are not liable for the debts of the ICVC;

  5. (5)

    the investment objectives of the authorised fund;

  6. (6)

    the policy and strategy pursued

    3

    for achieving those objectives;

  7. (7)

    a review of the investment activities during the period to which the report relates;

  8. (7A)

    a portfolio statement prepared in accordance with the requirements of the IMA SORP;

    3
  9. (7B)

    in the case of an umbrella which has more than one sub-fund, particulars in the form of a table showing, as at the end of the period to which the report relates:12

    1. (a)

      for each sub-fund, the number of units in that sub-fund that were held by a second sub-fund of that umbrella; and

    2. (b)

      the value of each such holding;

    or, alternatively, a statement that there were no such holdings as at the end of that period;

  10. (8)

    particulars of any fundamental changes in accordance with COLL 4.3.4 R (Fundamental change requiring prior approval by meeting) made since the date of the last report;

  11. (9)

    particulars of any significant changes which have occurred in accordance with COLL 4.3.6 R (Significant change requiring pre-event notification) since the date of the last report;

  12. (9A)

    4in the case of a UCITS scheme, the figure for the synthetic risk and reward indicator disclosed in its most recent key investor information document and any changes to that figure that have taken place during the period;

  13. (10)

    any other information which would enable unitholders to make an informed judgement on the development of the activities of the authorised fund during this period and the results of those activities as at the end of that period;

  14. (11)

    for a report on an umbrella prepared in accordance with COLL 4.5.7R (2)2 or COLL 4.5.8R (2)2 , information required by (1) to (10) must be given for each sub-fund, if it would vary from that given in respect of the umbrella as a whole;5

    225
  15. (12)

    for a UCITS scheme which invests a substantial proportion of its assets in other schemes, a statement as to the maximum proportion of management fees charged to the scheme itself and to other schemes in which that scheme invests; and2

    2
  16. (13)

    for a report on an individual sub-fund of a scheme which is an umbrella prepared in accordance with COLL 4.5.7R (4) or COLL 4.5.8R (3), a statement that the latest long report prepared for the umbrella as a whole is available on request.52

    5

Comparative information12

COLL 4.5.10 R RP

The comparative information12 required by COLL 4.5.7 R12 (Contents of the annual long report) and COLL 8.3.5A R (Contents of the annual report) must be shown for the last three annual accounting periods (or all of the authorised fund'sannual accounting periods, if fewer than three) and must set out:

12 12
  1. (1)

    [deleted]12

    12
  2. (1A)

    for a unit of each class in issue, a comparative table as at the end of the period to which the report relates, prepared in accordance with the requirements of the IMA SORP and showing at least:12

    1. (a)

      the performance record of a unit of that class;

    2. (b)

      an indication of the actual charges and costs borne by the class;

    3. (c)

      the net income distributed (or, for accumulation units, allocated) for the unit, taking account of any sub-division or consolidation of units that occurred during that period;

    4. (d)

      the net asset value of the unit as at the end of the period;

    5. (e)
      1. (i)

        (for a report of the directors of an ICVC) the number of units of the class in issue as at the end of the period; or

      2. (ii)

        (for a report of the authorised fund manager of an AUT or an ACS) the number of units of the class that are in existence or treated as in existence as at the end of the period; and

    6. (f)

      the highest and the lowest prices of the unit during the period;

  3. (2)

    [deleted]12

    12
  4. (2A)

    for the scheme property, its total net asset value as at the end of the period; and 12

  5. (3)

    if, in the period covered by the information:12

    12
    1. (a)

      the authorised fund has been the subject of any event (such as a scheme of arrangement) having a material effect on the size of the authorised fund, but excluding any issue or cancellation of units for cash; or

    2. (b)

      there have been changes in the investment objective and policy12 of the authorised fund;

      12
    3. (c)

      [deleted]12

      12

an indication, related in the body of the table to the relevant year in the table, of the date of the event or change in the investment objective and policy, and a brief description of its nature.12

COLL 4.5.10A G RP
  1. (1)

    The figure for the "return before operating charges" shown in the comparative table required by COLL 4.5.10R (1A) should include all costs and charges actually borne by the class of units it describes.

  2. (2)

    The indication of actual costs and charges borne by a class of units should cover pro-rata allocations of the operating charges borne by the scheme (e.g. annual management fee, fees and expenses payable to the depositary, auditors and FCA, costs of buying and selling units in an underlying scheme, etc.), any performance-related fee and direct transaction-related costs where known to the AFM (e.g. dealing commission on equity transactions and stamp duty). Where possible, the operating charges should be presented as a single figure in both pence per unit and as a percentage of net asset value.

Report of the depositary

COLL 4.5.11 R RP

  1. (1)

    The depositary must make an annual report to unitholders which must be included in the annual report.

  2. (2)

    The annual report must contain:

    1. (a)

      a description, which may be in summary form, of the duties of the depositary under COLL 6.6.4 (General duties of the depositary) and in respect of the safekeeping of the scheme property; and

    2. (b)

      a statement whether, in any material respect:

      1. (i)

        the issue, sale, redemption and cancellation, and calculation of the price of the units and the application of the authorised fund's revenue

        33

        , have not been carried out in accordance with the rules in this sourcebook and, where applicable, the OEIC Regulations and the instrument constituting the fund;10 and

        10
      2. (ii)

        the investment and borrowing powers and restrictions applicable to the authorised fund have been exceeded.

Report of the auditor

COLL 4.5.12 R RP

The authorised fund manager must ensure that the report of the auditor to the unitholders includes the following statements:3

3
  1. (1)

    whether, in the auditor's opinion, the accounts have been properly prepared in accordance with the IMA SORP, the rules in this sourcebook, and the instrument constituting the fund;10

    10
  2. (2)

    whether, in the auditor's opinion, the accounts give a true and fair view of the net revenue3and the net capital 3gains or losses on3the scheme property of the authorised fund (or, as the case may be, the scheme property attributable to the sub-fund) for the annual accounting period in question and the financial position of the authorised fund or sub-fund as at the end of that period;

    33
  3. (3)

    whether the auditor is of the opinion that proper accounting records for the authorised fund (or, as the case may be, sub-fund) have not been kept or whether the accounts are not in agreement with those records;

  4. (4)

    whether the auditor has been given all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit; and

  5. (5)

    whether the auditor is of the opinion that the information given in the report of the directors or in the report of the authorised fund manager for that period is consistent with the accounts.

Provision of short report

COLL 4.5.13 R

  1. (1)

    The authorised fund manager must, within four months after the end of each annual accounting period and within two months after the end of each half-yearly accounting period, respectively provide free of charge the short report in accordance with (2).

  2. (2)

    The authorised fund manager must send a copy of the report:

    1. (a)

      to each unitholder (or to the first named of joint unitholders) entered in or entitled to be entered in the register at the close of business on the last day of the relevant accounting period;

      2
    2. (b)

      to each unitholder of bearer units at his request; and2

      2
    3. (c)

      to any other person free of charge on request.2

  3. (3)

    unitholders in a scheme which is an umbrella must be provided with a report relating to the particular sub-fund in which they hold units subject to providing the long report on the umbrella on request in accordance with COLL 4.5.14R (2)(a).

  4. (4)

    The authorised fund manager must provide the reports in (1) and (3) to each unitholder: 11

    1. (a)

      in a durable medium; or11

    2. (b)

      by means of a website that meets the website conditions.11

Publication and availability of annual and half-yearly long report

COLL 4.5.14 R RP

  1. (1)

    The authorised fund manager must, within four months after the end of each annual accounting period and two months after the end of each half-yearly accounting period respectively, make available and publish the long reports2 prepared in accordance with COLL 4.5.7R (1) to (3)2 (Contents of the annual long report) and COLL 4.5.8R (1) to (2)2 (Contents of the half-yearly long report).

    22
  2. (2)

    The reports referred to in (1) must:

    1. (a)

      be supplied free of charge to any person on request2;

      2
    2. (b)

      be available in English, for inspection by the public free of charge during ordinary office hours at a place specified;

    3. (c)

      for a UCITS scheme, be available for inspection by the public at a place designated by the authorised fund manager in each EEA State other than the United Kingdom in which units in the authorised fund are marketed, in English and in at least one of that other EEA State's official languages; and

    4. (d)

      be sent to the FCA and, if the UCITS scheme is managed by an EEA UCITS management company, to that company's Home State regulator on request.4

[Note: article 74 of the UCITS Directive]4

Provision of annual and half-yearly long reports for master and feeder UCITS

COLL 4.5.15 R RP
  1. (1)

    4The authorised fund manager of a UCITS scheme which is a feeder UCITS must:

    1. (a)

      where requested by an investor, provide copies of the annual and half-yearly long reports of its master UCITS free of charge; and

    2. (b)

      file copies of the annual and half-yearly long reports of its master UCITS with the FCA .

  2. (2)

    Except where an investor requests paper copies or the use of electronic communications is not appropriate, the annual and half-yearly long reports of its master UCITS may be provided in a durable medium other than paper or by means of a website that meets the website conditions.

[Note: articles 63(3) and 63(5) of the UCITS Directive]

Provision of annual and half-yearly long reports for qualifying master schemes of feeder NURS

COLL 4.5.16 R RP
  1. (1)

    7The authorised fund manager of a feeder NURS must, where requested by an investor or the FCA , provide to such person copies of the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme free of charge.

  2. (2)

    Except where an investor requests paper copies or the use of electronic communications is not appropriate, the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme may be provided in a durable medium other than paper, or by means of a website that meets the website conditions.8