COLL 6.8 Income: accounting, allocation and distribution

This section applies to an authorised fund manager.

COLL 6.8.4 R (1) (Unclaimed, de minimis and joint unitholder distributions) also applies to the depositary of an authorised fund.

Except in the case of COLL 6.8.2 R (1) (Accounting periods) and COLL 6.8.3 R (1) (Income allocation and distribution), COLL 6.8 applies as if each sub-fund were a separate authorised fund.

An authorised fund must have:

1. (a)

   an annual accounting periods;

2. (b)

   a half-yearly accounting period; and

3. (c)

   an accounting reference date.

A half-yearly accounting period begins with the first day of an annual accounting period and ends on:

1. (a)

   the day which is six months before the last day of that annual accounting period; or

2. (b)

   some other reasonable date as set out in the prospectus of the scheme.1

The first annual accounting period of a scheme must begin:

1. (a)

   on the first day of any period of initial offer; or

2. (b)

   in any other case, on the date of the relevant authorisation order;

and in either case must end on the next accounting reference date, except where (4) applies.1

When the accounting reference date of a scheme falls less than six months after the beginning of the first annual accounting period, that period may be extended until the subsequent accounting reference date.1

Each annual accounting period of a scheme subsequent to the first period is to run for a period of 12 months, beginning on the next day after the accounting reference date, except where (6) applies.1

Following a revision to the prospectus of the scheme that includes a change to the accounting reference date, the annual accounting period may be shortened, or extended by up to six months, so as to end on the new accounting reference date.1

The authorised fund manager must consult the depositary and the scheme's auditor before shortening or extending an accounting period in accordance with (4) or (6).1

An authorised fund must have an annual income allocation date, which must be within four months of the accounting reference date.

An authorised fund may have interim income allocation dates and one or more interim accounting periods for each of those dates2 and, if it does, the interim income allocation date must be within four months of the end of the relevant interim accounting period(s).2

An authorised fund must have a distribution account to which the income property is transferred at the end of the relevant accounting period.

If income is allocated and distributed during an accounting period:

1. (a)

   with effect from the end of the relevant accounting period, the amount of income allocated to unit classes that accumulate income becomes part of the capital property and requires an adjustment to the proportion of the value of the scheme property to which they relate if other classes of units are in issue during the period;

2. (b)

   the adjustment in (a) must ensure the price of units remains unchanged despite the transfer of income; and

3. (c)

   the amount of any interim distribution may not be more than the amount which, in the opinion of the authorised fund manager, would be available for allocation if the interim accounting period and all previous interim accounting periods in the same annual accounting period, taken together, were an annual accounting period.

Any distribution remaining unclaimed after a period of six years, or such longer time specified by the prospectus, must become part of the capital property.

The authorised fund manager and the depositary may agree a de minimis amount in respect of which a distribution of income is not required, and how any such amounts are to be treated.

Distributions made to the first named joint unitholder on the register will be as effective a discharge to the trustee and manager, as if the first named joint unitholder had been a sole unitholder.