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COLL 8.2 Constitution



This section applies to an authorised fund manager in respect of a qualified investor scheme.

Classes of unit


A qualified investor scheme may issue such classes of unit as are set out in the instrument constituting the scheme, provided the rights of any class are not unfairly prejudicial as against the interests of the unitholders of any other class of units in that scheme.

Names of schemes, sub-funds, and classes of units

  1. (1)

    The authorised fund manager must ensure that the name of the scheme, a sub-fund or a class of unit is not undesirable or misleading.

  2. (2)

    An authorised fund or a sub-fund may only be named or marketed as a ‘money market fund’ if it is:

    1. (a)

      a short-term money market fund; or

    2. (b)

      a money market fund.4

Undesirable and misleading names


COLL 6.9.6 G (Undesirable or misleading names) contains guidance as to names which may be undesirable or misleading.

Instrument constituting the scheme


The statements and provisions required by COLL 8.2.6 R must be included in the instrument constituting the scheme of a qualified investor scheme.

Table: contents of the instrument constituting the scheme


This table belongs to COLL 8.2.5 R


Description of the authorised fund

Information detailing:


the name of the authorised fund;


that the authorised fund is a qualified investor scheme; and


in the case of an ICVC, whether the head office of the company is situated in England and Wales or Wales or Scotland or Northern Ireland.

3Property Authorised Investment Funds


For a property authorised investment fund, a statement that:


it is a property authorised investment fund;


no body corporate may seek to obtain or intentionally maintain a holding of more that 10% of the net asset value of the fund; and


in the event that the authorised fund manager reasonably considers that a body corporate holds more than 10% of the net asset value of the fund, the authorised fund manager is entitled to delay any redemption or cancellation of units in accordance with 6A if the authorised fund manager reasonably considers such action to be:


necessary in order to enable an orderly reduction of the holding to below 10%; and


in the interests of the unitholders as a whole.



The following statements:


the scheme property of the scheme is entrusted to a depositary for safekeeping (subject to any exception permitted by the rules);


if relevant, the duration of the scheme is limited and, if so, for how long;


charges and expenses of the scheme may be taken out of scheme property;


for an ICVC:


what the maximum and minimum sizes of the scheme's capital are; and


the unitholders are not liable for the debts of the company; and5


for an ICVC which is an umbrella, a statement that the assets of a sub-fund belong exclusively to that sub-fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the umbrella, or any other sub-fund, and shall not be available for any such purpose;


for an AUT:


the trust deed:


is made under and governed by the law of England and Wales, or the law of Scotland or the law of Northern Ireland;


is binding on each unitholder as if he had been a party to it and that he is bound by its provisions; and


authorises and requires the trustee and the manager to do the things required or permitted of them by its terms;


subject to the provisions of the trust deed and all the rules made under section 247 of the Act (Trust scheme rules):


the scheme (other than sums held to the credit of the distribution account) is held by the trustee on trust for the unitholders according to the number of units held by each unitholder or, where relevant, according to the number of individual shares in the scheme property represented by the units held by each unitholder; and


the sums standing to the credit of any distribution account are held by the trustee on trust to distribute or apply in accordance with COLL 8.5.15 R (Income);


a Unitholder is not liable to make any further payment after he has paid the price of his units and that no further liability can be imposed on him in respect of the units he holds; and


payments to the trustee by way of remuneration are authorised to be paid (in whole or in part) out of the scheme property.


Investment objectives

A statement of the object of the scheme, in particular the types of investments and assets in which it and each sub-fund (where applicable) may invest and that the object of the scheme is to invest in property of that kind with the aim of spreading investment risk.


Units in the scheme

A statement of:


the classes of units which the scheme may issue, indicating, for a scheme which is an umbrella, which class or classes may be issued in respect of each sub-fund; and


the rights attaching to units of each class (including any provisions for the expression in two denominations of such rights).


Limitation on issue of and redemption of units

Details as to:


the provisions relating to any restrictions on the right to redeem units in any class; and


the circumstances in which the issue of the units of any particular class may be limited.


Income and distribution

Details of the person responsible for the calculation, transfer, allocation and distribution of income for any class of unit in issue during the accounting period.

3Redemption or cancellation of units on breach of law or rules


A statement that where any holding of units by a unitholder is (or is reasonably considered by the authorised fund manager to be) an infringement of any law, governmental regulation or rule, those units must be redeemed or cancelled.


Base currency

A statement of the base currency of the scheme.



Details of the procedures for the convening of meetings and the procedures relating to resolutions, voting and the voting rights for unitholders.


Powers and duties of the authorised fund manager and depositary

Where relevant, details of any function to be undertaken by the authorised fund manager and depositary which the rules in COLL require to be stated in the instrument constituting the scheme.


Termination and suspension

Details of:


the grounds under which the authorised fund manager may initiate a suspension of the scheme and any associated procedures; and


the methodology for determining the rights of unitholders to participate in the scheme property on winding up.


Investment in overseas2 property through an intermediate holding vehicle1

If investment in an overseas2 immovable is to be made through an intermediate holding vehicle or a series of intermediate holding vehicles, a statement that the purpose of that intermediate holding vehicle or series of intermediate holding vehicles will be to enable the holding of overseas2 immovables by the scheme.1


Other relevant matters

Details of those matters which enable the scheme, authorised fund manager or depositary to obtain any privilege or power conferred by the rules in COLL which is not otherwise provided for in the instrument constituting the scheme.

Limited issue


Units whose issue may be limited can only be issued if permitted by the instrument constituting the scheme, under the conditions set out in the prospectus and provided that this will not materially prejudice any existing unitholders in the scheme.