This chapter applies to:

1. (1)

   an authorised fund manager of an AUT, ACS1 or an ICVC;

2. (2)

   any other director of an ICVC;

3. (3)

   a depositary of an AUT, ACS1 or an ICVC; and

4. (4)

   an ICVC,

where such AUT, ACS1 or ICVC is a UCITS scheme or a non-UCITS retail scheme.

This section applies to an authorised fund manager, an ICVC and any other director of an ICVC

1. (1)

   A prospectus must be drawn up in English and published as a document by the authorised fund manager and, for an ICVC, it must be approved by the directors.

2. (2)

   The authorised fund manager must ensure that the prospectus:

   1. (a)

      contains the information required by COLL 4.2.5 R (Table: contents of the prospectus);

   2. (aa)

      29for a non-UCITS retail scheme managed by a full-scope UK AIFM, contains the information required by:

      1. (i)

         29FUND 3.2.2R and FUND 3.2.3R (Prior disclosure of information to investors); and

      2. (ii)

         29FUND 3.2.5R and FUND 3.2.6R (Periodic disclosure), unless the up-to-date information has been published in the scheme’s most recent annual report or half-yearly report;

   3. (b)

      does not contain any provision which is unfairly prejudicial to the interests of unitholders generally or to the unitholders of any class of units;

   4. (c)

      does not contain any provision that conflicts with any applicable rule29; and

   5. (d)

      is kept up-to-date and that revisions are made to it, whenever appropriate.

1. (1)

   The authorised fund manager of an AUT, ACS21 or an ICVC16 must:

   16
   1. (a)

      provide16 a copy of the scheme's most recent prospectus drawn up and published in accordance with COLL 4.2.2 R (Publishing the prospectus) free of charge to any person on request; and

      16
   2. (b)

      file a copy of the scheme's original prospectus, together with all revisions thereto, with the FCA and, where a UCITS scheme is managed by an EEA UCITS management company, with that company's Home State regulator on request.

      1616
2. (1A)

   16Except where an investor requests a paper copy or the use of electronic communications is not appropriate, the prospectus may be provided in a durable medium or by means of a website that meets the website conditions.

3. (2)

   [deleted]16

   16
4. (3)

   An authorised fund manager must, upon the request of a unitholder in a UCITS scheme that it manages, provide information supplementary to the prospectus of that scheme relating to:

   1. (a)

      the quantitative limits applying to the risk management of that scheme;

   2. (b)

      the methods used in relation to (a); and

   3. (c)

      any recent development of the risk and yields of the main categories of investment.

1. (1)

   16The authorised fund manager of a UCITS scheme that is a feeder UCITS must:

   1. (a)

      where requested by an investor, provide a copy of the prospectus of its master UCITS free of charge; and

   2. (b)

      file a copy of the prospectus of its master UCITS and any amendments thereto with the FCA.

2. (2)

   Except where an investor requests a paper copy or the use of electronic communications is not appropriate, the prospectus of the master UCITS may be provided in a durable medium other than paper or by means of a website that meets the website conditions.

1. (1)

   18The authorised fund manager of a feeder NURS must, where requested by an investor or the FCA , provide such person with a copy of the prospectus of its qualifying master scheme free of charge.

2. (2)

   18Except where an investor requests a paper copy or the use of electronic communications is not appropriate, the prospectus of the qualifying master scheme may be provided in a durable medium other than paper, or by means of a website that meets the website conditions.20

1. (1)

   The authorised fund manager:

   1. (a)

      must ensure that the prospectus of the authorised fund does not contain any untrue or misleading statement or omit any matter required by the rules in this sourcebook to be included in it; and

   2. (b)

      is liable to pay compensation to any person who has acquired any units in the authorised fund and suffered loss in respect of them as a result of such statement or omission; this is in addition to any liability incurred apart from under this rule.

2. (2)

   The authorised fund manager is not in breach of (1)(a) and is not liable to pay compensation under (1)(b) if, at the time when the prospectus was made available to the public, it had taken reasonable care to determine that the statement was true and not misleading, or that the omission was appropriate, and that:

   1. (a)

      it continued to take such reasonable care until the time of the relevant acquisition of units in the scheme; or

   2. (b)

      the acquisition took place before it was reasonably practicable to bring a correction to the attention of potential purchasers; or

   3. (c)

      it had already taken all reasonable steps to ensure that a correction was brought to the attention of potential purchasers; or

   4. (d)

      the person who acquired the units was not materially influenced or affected by that statement or omission in making the decision to invest.

3. (3)

   The authorised fund manager is also not in breach of (1)(a) and is not liable to pay compensation under (1)(b) if:

   1. (a)

      before the acquisition a correction had been published in a manner calculated to bring it to the attention of persons likely to acquire the units in question; or

   2. (b)

      it took all reasonable steps to secure such publication and had reasonable grounds to conclude that publication had taken place before the units were acquired.

4. (4)

   The authorised fund manager is not liable to pay compensation under (1)(b) if the person who acquired the units knew at the time of the acquisition that the statement was untrue or misleading or knew of the omission.

5. (5)

   For the purposes of this rule a revised prospectus will be treated as a different prospectus from the original one.

6. (6)

   References in this rule to the acquisition of units include references to contracting to acquire them.

This section applies to an authorised fund manager.

1. (1)

   The authorised fund manager, must, by way of an extraordinary resolution, obtain prior approval from the unitholders for any proposed change to the scheme which, in accordance with (2), is a fundamental change.

2. (2)

   A fundamental change is a change or event which:

   1. (a)

      changes the purposes or nature of the scheme; or

   2. (b)

      may materially prejudice a unitholder; or

   3. (c)

      alters the risk profile of the scheme; or

   4. (d)

      introduces any new type of payment out of scheme property.

1. (1)

   The authorised fund manager must give prior written notice to unitholders, in respect of any proposed change to the operation of a scheme that, in accordance with (2), constitutes a significant change.

2. (2)

   A significant change is a change or event which is not fundamental in accordance with COLL 4.3.4 R but which:

   1. (a)

      affects a unitholder's ability to exercise his rights in relation to his investment; or

   2. (b)

      would reasonably be expected to cause the unitholder to reconsider his participation in the scheme; or

   3. (c)

      results in any increased payments out of the scheme property to an authorised fund manager or any other director of an ICVC or an associate of either; or

   4. (d)

      materially increases other types of payment out of scheme property.

3. (3)

   The notice period in (1) must be of a reasonable length (and must not be less than 60 days).

1. (1)

   3In the case of a UCITS scheme, the appointment of a new ACD of an ICVC under COLL 6.5.3 R (Appointment of an ACD) or the replacement of the authorised fund manager of an AUT or ACS5 who proposes to retire under COLL 6.5.8 R (Retirement of an authorised fund manager of an AUT or ACS)5 must, if in either case the new authorised fund manager is established in a different EEA State to the outgoing authorised fund manager, be treated as a significant change in accordance with COLL 4.3.6 R.

   55
2. (2)

   Paragraph (1) does not apply:

   1. (a)

      if the appointment of the new authorised fund manager is the subject of an extraordinary resolution approved by a meeting of unitholders; or

   2. (b)

      following the termination of the appointment of the ACD of an ICVC under COLL 6.5.4 R (2) or COLL 6.5.4 R (3) (Termination of appointment of an ACD), if the directors of the ICVC other than the ACD, or the depositary if there are no such directors, consider that it would be in the best interests of unitholders to appoint a new ACD without delay.

1. (1)

   The authorised fund manager must inform unitholders in an appropriate manner and timescale of any notifiable changes that are reasonably likely to affect, or have affected, the operation of the scheme.

2. (2)

   A notifiable change is a change or event, other than a fundamental change under COLL 4.3.4 R or a significant change under COLL 4.3.6 R, which a unitholder must be made aware of unless the authorised fund manager concludes that the change is insignificant.

1. (1)

   3In the case of a UCITS scheme, the appointment of a new authorised fund manager as a result of:

   1. (a)

      in the case of an ICVC, the termination of the appointment of the previous ACD under COLL 6.5.4 R (2) or COLL 6.5.4 R (3) (Termination of appointment of an ACD); or

   2. (b)

      in the case of an AUT or ACS5, the replacement of the authorised fund manager5 under COLL 6.5.7 R (2) (Replacement of an authorised fund manager of an AUT or ACS);5

      55

   must, if the new authorised fund manager is established in a different EEA State to the outgoing authorised fund manager, be notified to unitholders.

2. (2)

   The new authorised fund manager must immediately notify unitholders of its appointment under (1) in an appropriate manner.

3Where the authorised fund manager of either a feeder UCITS or a feeder NURS4 is notified of any change in respect of its master UCITS or qualifying master scheme4which has the effect of a change to the feeder UCITS or feeder NURS4, the authorised fund manager must:

1. (1)

   classify it as a fundamental change, significant change or a notifiable change to the feeder UCITS or feeder NURS4 in accordance with the rules in this section; and

2. (2)
   1. (a)

      for a fundamental change, obtain approval from the unitholders by way of an extraordinary resolution; or4

   2. (b)

      for a significant change, give written notice to unitholders of that change; or

   3. (c)

      for a notifiable change, comply with COLL 4.3.8 R (Notifiable changes)4.

3The actions required by COLL 4.3.11 R (2)(a) and (b) must be carried out as soon as reasonably practicable after the authorised fund manager of the feeder UCITS or feeder NURS4 has been informed of the relevant change to the master UCITS or qualifying master scheme4.

This section applies to an authorised fund manager, a depositary and any other director of an ICVC.

1. (1)

   The authorised fund manager, the depositary or the other directors of an ICVC may convene a general meeting of unitholders at any time.

2. (2)

   The unitholders may request the convening of a general meeting by a requisition which must:

   1. (a)

      state the objects of the meeting;

   2. (b)

      be dated;

   3. (c)

      be signed by unitholders who, at that date, are registered as the unitholders of units representing not less than one-tenth in value (or such lower proportion stated in the instrument constituting the fund4 ) of all of the units then in issue; and

      4
   4. (d)

      be deposited at the head office of the ICVC or with the depositary of an AUT or ACS.3

      3
3. (3)

   The authorised fund manager, the depositary or the other directors of an ICVC must on receipt of a requisition that complies with (2), immediately convene a general meeting of the authorised fund for a date no later than eight weeks after receipt of the requisition.

4. (4)

   5The advisory committee of a charity authorised investment fund may also request the convening of a general meeting of unitholders by giving notice in accordance with COLL 14.3.5R.

This section applies, unless the context otherwise requires, to class meetings by reference to the units of the class concerned and the unitholders and prices of such units.

1. (1)

   Unless a unit in the authorised fund is a participating security, in this section "unitholders" means unitholders as at a cut-off date selected by the authorised fund manager which is a reasonable time before notices of the relevant meeting are sent out.

2. (2)

   If any unit in the authorised fund is a participating security, a registered unitholder of such a unit is entitled to receive a notice of a meeting or a notice of an adjourned meeting under COLL 4.4.5 R (Notice of general meetings), if entered on the register at the close of business on a day to be determined by the authorised fund manager, which must not be more than 21 days before the notices of the meeting are sent out.

3. (3)

   For the purposes of (2), in COLL 4.4.6 R (Quorum) to COLL 4.4.11 R (Chairman, adjournments and minutes) "unitholders" in relation to those units means:

   1. (a)

      the persons entered on the register at a time to be determined by the authorised fund manager and stated in the notice of the meeting, which must not be more than 48 hours before the time fixed for the meeting; or

   2. (b)

      in the case of bearer shares in an ICVC, shareholders5 of bearer shares5which were in issue at the time applicable under (a).

1. (1)

   Where the authorised fund manager, the depositary or the other directors of an ICVC decide to convene a general meeting of unitholders:

   1. (a)

      each unitholder must be given at least 14 days written notice, inclusive of the date on which the notice is first served and the day of the meeting; and

   2. (b)

      the notice must specify the place, day and hour of the meeting and the terms of the resolutions to be proposed and a copy of the notice must be sent to the depositary.

2. (2)

   The accidental omission to give notice to, or the non-receipt of notice by, any unitholder does not invalidate the proceedings at any meeting.

3. (3)

   Notice of an adjourned meeting of unitholders must be given to each unitholder, stating that while two unitholders present in person or proxy are required to constitute a quorum at the adjourned meeting, this may be reduced to one in accordance with COLL 4.4.6R (3), should two such unitholders not be present after a reasonable time of convening of the meeting.

4. (4)

   Paragraph (1)(a) does not apply to the notice of an adjourned meeting.

1. (1)

   The quorum required to conduct business at a meeting of unitholders is two unitholders, present in person or by proxy.

2. (2)

   If after a reasonable time from the time for the start of the meeting, a quorum is not present, the meeting:

   1. (a)

      if convened on the requisition of unitholders, must be dissolved; and

   2. (b)

      in any other case, must stand adjourned to:

      1. (i)

         a day and time which is seven or more days after the day and time of the meeting; and

      2. (ii)

         in the case of a physical meeting or a hybrid meeting, a place to be appointed by the chairman.

3. (3)

   If, at an adjourned meeting under (2)(b), a quorum is not present after a reasonable time from the time for the meeting, one person entitled to be counted in a quorum present at the meeting shall constitute a quorum.

1. (1)

   Except where an extraordinary resolution is specifically required or permitted, any resolution of unitholders is passed by a simple majority of the votes validly cast at a general meeting of unitholders.

2. (2)

   In the case of an equality of, or an absence of, votes cast, the chairman is entitled to a casting vote.

3. (3)

   Where a resolution (including an extraordinary resolution) is required to conduct business at a meeting of unitholders and every unitholder is prohibited under COLL 4.4.8R (4) from voting, it shall not be necessary to convene such a meeting and a resolution may, with the prior written agreement of the depositary to the process, instead be passed with the written consent of unitholders representing 50% or more, or for an extraordinary resolution 75% or more, of the units of the scheme in issue.1

1. (1)

   On a show of hands every unitholder who is present in person has one vote.

2. (2)

   On a poll:

   1. (a)

      votes may be given either personally or by proxy or in another manner permitted by the instrument constituting the fund;4

      4
   2. (b)

      the voting rights for each unit must be the proportion of the voting rights attached to all of the units in issue that the price of the unit bears to the aggregate price or prices of all of the units in issue:

      1. (i)

         if any unit is a participating security, at the time determined under COLL 4.4.4R (2) (Special meaning of Unitholder in COLL 4.4);

      2. (ii)

         otherwise at the date specified in COLL 4.4.4R (1); and

   3. (c)

      a unitholder need not use all his votes or cast all his votes in the same way.

3. (3)

   For joint unitholders, the vote of the most senior who votes, whether in person or by proxy, must be accepted to the exclusion of the votes of the other joint unitholders. For this purpose seniority must be determined by the order in which the names stand in the register of unitholders.1

   1
4. (4)

   No director of the ICVC or the authorised fund manager of an AUT or ACS3 can be counted in the quorum of, and no such director or the authorised fund manager of an AUT or ACS3 nor any of their associates may vote at, any meeting of the authorised fund.

   33
5. (5)

   The prohibition in (4) does not apply to any units held on behalf of, or jointly with, a person who, if himself the registered unitholder, would be entitled to vote and from whom the director, the authorised fund manager of an AUT or ACS3 or its associate have received voting instructions.

   3
6. (6)

   For the purpose of this section, units held, or treated as held, by the authorised fund manager or any other director of the ICVC, must not, except as mentioned in (5), be regarded as being in issue.

1. (1)

   A resolution put to the vote of a general meeting must be determined on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

   1. (a)

      the chairman;

   2. (b)

      at least two unitholders; or

   3. (c)

      the depositary.

2. (2)

   Unless a poll is demanded in accordance with (1), a declaration by the chairman as to the result of a resolution is conclusive evidence of the fact.

1. (1)

   A unitholder may appoint another person to attend a general meeting and vote in his place.

2. (2)

   Unless the instrument constituting the fund4 provides otherwise, a unitholder may appoint more than one proxy to attend on the same occasion but a proxy may vote only on a poll.

   4
3. (3)

   Every notice calling a meeting of a scheme must contain a reasonably prominent statement that a unitholder entitled to attend and vote may appoint a proxy.

4. (4)

   For the appointment to be effective, any document relating to the appointment of a proxy must not be required to be received by the ICVC or any other person more than 48 hours before the meeting or adjourned meeting

1. (1)

   A meeting of unitholders must have a chairman, nominated:1

   1
   1. (a)

      in the case of an AUT or ACS3, by the depositary;31

      3
   2. (b)

      in the case of an ICVC, by a director other than the ACD or an associate of the ACD or, if no such nomination is made, by the depositary.1

2. (2)

   If the chairman is not present after a reasonable time from the time for the meeting, the unitholders present must choose one of them to be chairman.

3. (3)

   The chairman:

   1. (a)

      may, with the consent of any meeting of unitholders at which a quorum is present; and

   2. (b)

      must, if so directed by the meeting;

      adjourn the meeting from time to time and from place to place

4. (4)

   Business must not be transacted at any adjourned meeting, except business which might have lawfully been transacted at the original meeting.

5. (5)

   The authorised fund manager must ensure that:

   1. (a)

      minutes of all resolutions and proceedings at every meeting of unitholders are made and kept; and

   2. (b)

      any minute made in (a) is signed by the chairman of the meeting of unitholders.

6. (6)

   Any minute referred to in (5)(b) is conclusive evidence of the matters stated in it.

1. (1)

   Where this sourcebook requires any notice or document to be served upon a unitholder, it is duly served :

   1. (a)

      for units held by a registered unitholder, if it is:

      1. (i)

         sent by post to or left at1 the unitholder's address as appearing in the register; or

         1
      2. (ii)

         sent1 by using an electronic medium in accordance with COLL 4.4.13 R (Other notices); or

         1
   2. (b)

      for units represented by bearer certificates, if given in the manner provided for in the prospectus.

2. (2)

   Any notice or document served by post is deemed to have been served on the second business day following the day on which it is posted.

3. (3)

   Any document left at a registered address or delivered other than by post is deemed to have been served on that day.

1. (1)

   Any document or notice to be served on or information to be given to, any person, including the FCA , must be in legible form.

2. (2)

   For the purposes of this rule, any form is legible form which:

   1. (a)

      is consistent with the ICVC's, the directors', the authorised fund manager's or the depositary's knowledge of how the recipient of the document wishes or expects to receive the document;

   2. (b)

      is capable of being provided in hard copy by the authorised fund manager, the depositary or any other director of the ICVC;

   3. (c)

      enables the recipient to know or record the time of receipt; and

   4. (d)

      is reasonable in the context.

3. (3) 2
   1. (a)

      2In this sourcebook, any requirement that a document be signed may be satisfied by an electronic signature or electronic evidence of assent.

   2. (b)

      In relation to an AUT or ACS3, where transfer of title to units is to be effected on the authority of an electronic communication, the authorised fund manager3 must take reasonable steps to ensure that any electronic communication purporting to be made by the unitholder or his agent is in fact made by that person.

      3

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

1. (1)

   The authorised fund manager must for each annual accounting period and half-yearly accounting period, prepare a 15long report for a scheme.

2. (2)

   [deleted]15

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

1. (1)

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

   1. (a)

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

      3
   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 accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;

         3
      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 revenue3 and the net capital3 gains or 3losses 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.

   9233
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 accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;2

         3
      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 of the payments out of scheme property as set out in the prospectus (in this rule “charges”)20 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]

3. (8)

   20An annual long report of an authorised fund must also contain a statement setting out a description of the assessment of value required by COLL 6.6.20R including:

   1. (a)

      20a separate discussion and conclusion for the matters covered in each paragraph of COLL 6.6.21R, and for each other matter that formed part of the assessment, covering the considerations taken into account in the assessment, a summary of its findings and the steps undertaken as part of or as a consequence of the assessment;

   2. (b)

      20an explanation for any case in which benefits from economies of scale that were identified in the assessment have not been passed on to unitholders;

   3. (c)

      20an explanation for any case in which unitholders hold units in a class that is subject to higher charges than those applying to other classes of the same scheme with substantially similar rights;

   4. (d)

      20the conclusion of the authorised fund manager’s assessment of whether the charges are justified in the context of the overall value delivered to the unitholders in the scheme; and

   5. (e)

      20if the assessment has identified that the charges are not justified in the context of the overall value delivered to the unitholders, a clear explanation of what action has been or will be taken to address the situation.

4. (9)

   20An AFM need not include the statement required by (8) in its annual long report if it makes the statement available to unitholders annually in a composite report covering two or more of the authorised funds it manages, published in the same manner as the annual long report.

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

      3
   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 accounts for the half-yearly accounting period2 which must be prepared in accordance with the requirements of the IMA SORP; and

         32
      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

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.

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

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 or a KII-compliant NURS that does not have a significant exposure to immovables19, the figure for the synthetic risk and reward indicator disclosed in its most recent key investor information document or NURS-KII document19 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

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:

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

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.

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

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

      22
   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

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.

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

11

1This section applies to an ICVC, an authorised fund manager of an AUT, ACS2 or ICVC and any other director of an ICVC where, in each case, the AUT, ACS2 or ICVC is:6

1. (1)

   a UCITS scheme; or6

2. (2)

   a non-UCITS retail scheme that is offered to retail clients if the authorised fund manager or ICVC draws up a NURS-KII document instead of a key information document for the scheme.6

1. (1)

   An authorised fund manager must6 draw up a short document in English containing key investor information6 for investors:6

   1. (a)

      in each UCITS scheme which it manages (a key investor information document); and6

   2. (b)

      in each KII-compliant NURS which it manages (a NURS-KII document).6

2. (2)

   The words "key investor information" must be clearly stated in the key investor information document and NURS-KII document6.

3. (3)

   Key investor information must include appropriate information about the essential characteristics of the UCITS scheme or KII-compliant NURS6 which is to be provided to investors so that they are reasonably able to understand the nature and risks of the investment product that is being offered to them and, therefore, to take investment decisions on an informed basis.

4. (4)

   Key investor information must provide information on the following essential elements in respect of the UCITS scheme or KII-compliant NURS6:

   1. (a)

      identification of the scheme5 and that the FCA is the competent authority of the scheme4;

   2. (b)

      a short description of its investment objectives and investment policy;

   3. (c)

      past performance presentation or, where relevant, performance scenarios;

   4. (d)

      costs and associated charges; and

   5. (e)

      risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the scheme.

5. (5)

   The essential elements referred to in (4) must be comprehensible to the investor without any reference to other documents.

6. (6)

   A key investor information document or NURS-KII document6 must clearly specify where and how to obtain additional information relating to the proposed investment, including but not limited to where and how the prospectus and the annual and half-yearly reports can be obtained on request and free of charge at any time, and the language in which that information is available to investors.

7. (6A)

   4A key investor information document must also include:

   1. (a)

      a statement that the details of the up-to-date remuneration policy are available by means of a website, including, but not limited to, the following:

      1. (i)

         a description of how remuneration and benefits are calculated; and

      2. (ii)

         the identities of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee, where such a committee exists; and

   2. (b)

      a reference to that website, and that a paper copy of the website information will be made available free of charge upon request.

8. (6B)

   A NURS-KII document must also include a statement that the details of the up-to-date remuneration policy will be made available free of charge upon request, including the following:6

   1. (a)

      a description of how remuneration and benefits are calculated; and6

   2. (b)

      the identities of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee, where such a committee exists.6

9. (7)

   Key investor information must be written in a concise manner and in non-technical language. It must be drawn up in a common format, allowing for comparison, and must be presented in a way that is likely to be understood by retail investors.

10. (8)

    Key investor information for a UCITS scheme6 must be used without alterations or supplements, except translation, in each EEA State where a UCITS marketing notification has been made so as to enable the marketing of the scheme'sunits in that State.

6The following must comply with COLL Appendix 2R (Modifications to the KII Regulation for KII-compliant NURS), which contains a modified version of the KII Regulation for KII-compliant NURS, when producing a NURS-KII document:

1. (1)

   an authorised fund manager of a KII-compliant NURS; and

2. (2)

   an ICVC that is a KII-compliant NURS.

The key investor information document and the NURS-KII document6 must:

1. (1)

   constitute pre-contractual information (see COBS 14.2.1A R (Provision of key investor information document or NURS-KII document6));

2. (2)

   be fair, clear and not misleading; and

3. (3)

   be consistent with the relevant parts of the prospectus.

1. (1)

   An authorised fund manager must keep up to date the essential elements of:6

   1. (a)

      the key investor information document for each UCITS scheme which it manages; or6

   2. (b)

      the NURS-KII document for each KII-compliant NURS which it manages.6

2. (2)

   An authorised fund manager must file the key investor information document for each UCITS scheme or the NURS-KII document for each KII-compliant NURS6 which it manages, and any amendments thereto, with the FCA.

3. (3)

   An authorised fund manager of a feeder UCITS or feeder NURS6 must, in addition to (1) and (2), file the key investor information of its master UCITS or the NURS-KII document of its qualifying master scheme6, and any amendments thereto, with the FCA.

1This section applies to an ICVC, an authorised fund manager of an AUT, ACS2 or ICVC and any other director of an ICVC where, in each case, the AUT, ACS2 or ICVC is a UCITS scheme.

1. (1)

   An authorised fund manager of a UCITS scheme that has been approved by the FCA to operate as a feeder UCITS, including as a feeder UCITS of a different master UCITS, must provide the following information to its unitholders at least 30 calendar days before the date when the feeder UCITS is to start to invest in units of the master UCITS or, if it has already invested in them, the date when its investment will exceed the limit applicable under COLL 5.2.11R (9) (Spread: general):

   1. (a)

      a statement that the FCA has approved the investment of the feeder UCITS in units of that master UCITS;

   2. (b)

      the key investor information of the feeder UCITS and the master UCITS;

   3. (c)

      the date when the feeder UCITS is to start to invest in units of the master UCITS or, if it has already invested in them, the date when its investment will exceed the limit applicable under COLL 5.2.11R (9);

   4. (d)

      a statement that the unitholders have the right, for 30 calendar days from the moment this information is provided, to request the repurchase or redemption of their units without any charges other than those retained by the UCITS scheme to cover disinvestment costs.

2. (2)

   Where a UCITS marketing notification has been made in relation to a feeder UCITS, the authorised fund manager of the feeder UCITS must ensure that an accurate translation of the information in (1) is provided to unitholders in:

   4
   1. (a)

      the official language, or one of the official languages, of the feeder UCITS'Host State; or

   2. (b)

      a language approved by the Host State regulator.

The authorised fund manager of the feeder UCITS must provide to unitholders the information required under COLL 4.8.3 R in a durable medium.

2

2