The authorised fund manager may, with the prior agreement of the depositary, and must without delay, if the depositary so requires, temporarily1 suspend the issue, cancellation, sale and redemption of units in an authorised fund (referred to in this chapter as "dealings in units"), where due to exceptional circumstances it is in the interest of all the unitholders in the authorised fund.
immediately inform the FSA, stating the reason for its action; and
as soon as practicable give written confirmation of the suspension and the reasons for it to:
In making the notification set out in (2A), the authorised fund manager must ensure that it:
The authorised fund manager must ensure that it publishes (on its website or by other general means) sufficient details to keep unitholders appropriately informed about the suspension including, if known, its likely duration.1
During a suspension:1
- (4) 1
The authorised fund manager and the depositary must formally review the suspension at least every 28 days and inform the FSA of the results of this review and any change to the information provided in (2).1
The authorised fund manager must inform the FSA of the proposed restart of dealings in units and immediately after the restart must confirm this by giving notice to the FSA and the authorities mentioned in (2)(b)(ii).
The authorised fund manager may agree, during the suspension, to deal in units in which case all deals accepted during, and outstanding prior to, the suspension will be undertaken1 at a price calculated at the first valuation point after restart of dealing1 in units, subject to (8).11
If an authorised fund operates limited redemption arrangements, and the event in (1) has affected a valuation point, the authorised fund manager must declare an additional valuation point as soon as possible after the restart of dealings in units.
an authorised fund manager of a UCITS scheme which is a master UCITS temporarily suspends the issue, cancellation, sale and redemption of its units, whether at its own initiative or at the request of the FSA; or
an operator of an EEA UCITS scheme which is a master UCITS temporarily suspends the issue, cancellation, sale or redemption of its units, whether at its own initiative or at the request of its Home State regulator;
the authorised fund manager of each of its feeder UCITS (which is a UCITS scheme) is entitled to suspend the issue, cancellation, sale or redemption of its units for the same period of time as the master UCITS.
[Note: article 60(3) of the UCITS Directive]
1Suspension should be allowed only in exceptional cases where circumstances so require and suspension is justified having regard to the interests of the unitholders. Difficulties in realising scheme assets or temporary shortfalls in liquidity may not on their own be sufficient justification for suspension. In such circumstances the authorised fund manager and depositary would need to be confident that suspension could be demonstrated genuinely to be in the best interests of the unitholders. Before an authorised fund manager and depositary determines that it is the best interests of unitholders to suspend dealing, it should ensure that any alternative courses of action have been discounted.
The authorised fund manager will need to ensure that any suspension, while maintaining unitholders' interests, is temporary, of minimal duration and is consistent with the provisions of the prospectus and the instrument constituting the scheme.
During a suspension, the authorised fund manager should inform any person who requests a sale or redemption of units that all dealings in units have been suspended and that that person has the option to withdraw the request during the period of suspension or have the request executed at the first opportunity after the suspension ends.