Content Options

View Options

Status: You are viewing the version of the handbook as on 2009-03-31.

COLL 8.3 Investor relations

Application

COLL 8.3.1RRP

Drawing up and availability of prospectus

COLL 8.3.2RRP
  1. (1)

    An authorised fund manager must ensure that a prospectus of a qualified investor scheme is drawn up which contains the information, specified in COLL 8.3.4 R (Table: contents of qualified investor scheme prospectus), and the authorised fund manager must:

    1. (a)

      revise the prospectus immediately upon the occurrence of any materially significant change in the information required to be stated within it;

    2. (b)

      include the date of any revision in a prominent manner in the revised prospectus;2

      2
    3. (c)

      send a copy of the original and any revised prospectus to the FSA; and2

      2
    4. (d)

      review the prospectus periodically and revise it to take account of any significant change or new matter.2

  2. (2)

    The prospectus must not contain any provision which is unfairly prejudicial to the interests of unitholders generally or to the unitholders of any class of units.

  3. (3)

    An ICVC or the manager of an AUT must offer a copy of the scheme's most recent prospectus free of charge to any person eligible to invest in a qualified investor scheme prior to the purchase of any units.

False or misleading prospectus

COLL 8.3.3RRP

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

Table: contents of qualified investor scheme prospectus

COLL 8.3.4RRP

This table belongs to COLL 8.3.2 R.

1

Document status

A statement that this document is the prospectus of the authorised fund valid as at a particular date which shall be the date of the document.

2

Description of the authorised fund

Information detailing:

(1)

the name of the authorised fund;

(2)

that the authorised fund is either an ICVC or an AUT;

(3)

that the scheme is a qualified investor scheme;

(4)

where relevant, that the unitholders in an ICVC are not liable for the debts of the authorised fund;

(5)

where relevant, the address of the ICVC's head office and the address in the United Kingdom for service on the ICVC of documents required or authorised to be served on it;

(6)

the effective date of the authorisation order made by the FSA and, if the duration of the authorised fund is not unlimited, when it will or may terminate;

(7)

the base currency for the authorised fund;

(8)

where relevant, the maximum and minimum sizes of the ICVC's capital; and

(9)

the circumstances in which the authorised fund may be wound up under the rules in COLL and a summary of the procedure for, and the rights of unitholders under, such a winding up.

3

Investment objectives and policy

(1)

Sufficient information to enable a unitholder to ascertain:

(a)

the investment objectives of the authorised fund;

(b)

the authorised fund's investment policy for achieving those investment objectives, including:

(i)

the general nature of the portfolio and any intended specialisation;

(ii)

the policy for the spreading of risk in the scheme property; and

(iii)

the policy in relation to the exercise of borrowing powers;

(c)

a description of any restrictions in the assets in which investment may be made; and

(d)

the extent (if any) to which that investment policy does not envisage remaining fully invested at all times.

(2)

For investment in immovables :

(a)

the countries or territories of immovables in which the authorised fund may invest;

(b)

the policy of the authorised fund manager in relation to insurance of immovables forming part of the scheme property; and

(c)

the policy of the authorised fund manager in relation to the granting of options over immovables in the scheme property and the purchase of options on immovables.

(3)

If intended, whether the scheme property may consist of units in collective investment schemes ("second schemes") which are managed by or operated by the authorised fund manager or by one of its associates and a statement as:

(a)

to the basis of the maximum amount of the charges in respect of transactions in a second scheme; and

(b)

the extent to which any such charges will be reimbursed to the scheme.

(4)

If intended, whether the scheme may enter into stock lending transactions and, if so, what procedures will operate and what collateral will be required.

4

Distributions and accounting dates

Relevant details of accounting and distribution dates and a description of the procedures:

(1)

for determining and applying income (including how any distributable income is paid); and

(2)

relating to unclaimed distributions.

5

The characteristics of units in the authorised fund

Information as to:

(1)

the names of the classes of units in issue or available for issue and the rights attached to them in so far as they vary from the rights attached to other classes;

(2)

how unitholders may exercise their voting rights and what these are; and

(3)

the circumstances where a mandatory redemption, cancellation or conversion of units from one class to another may be required.

6

The authorised fund manager

The following particulars of the authorised fund manager:

(1)

its name and the nature of its corporate form;

(2)

the country or territory of its incorporation;

(3)

the date of its incorporation and if the duration of its corporate status is limited, when that status will or may cease;

(4)

if it is a subsidiary, the name of its ultimate holding company and the country or territory in which that holding company is incorporated;

(5)

the address of its registered office, its head office, and, if different, the address of its principal place of business in the United Kingdom;

(6)

the amount of its issued share capital and how much of it is paid up;

(7)

for an ICVC, a summary of the material provisions of the contract between the ICVC and the authorised fund manager which may be relevant to unitholders including provisions (if any) relating to termination, compensation on termination and indemnity; and

(8)

for an AUT, the names of the directors of the manager.

7

Directors of an ICVC, other than the ACD

Other than for the ACD:

(1)

the names and positions in the ICVC of the directors; and

(2)

the manner, amount and calculation of the remuneration of the directors.

8

The depositary

The following particulars of the depositary:

(1)

its name and the nature of its corporate form;

(2)

the country or territory of its incorporation;

(3)

the address of its registered office and the address of its head office if that is different from the address of its registered office; and

(4)

if neither its registered office nor its head office is in the United Kingdom, the address of its principal place of business in the United Kingdom.

9

The investment adviser

If an investment adviser is retained in connection with the business of the authorised fund, its name and whether or not it is authorised by the FSA.

10

The auditor

The name of the auditor of the authorised fund.

11

The register of Unitholders

Details of the address in the United Kingdom where the register of unitholders is kept and can be inspected by unitholders.

12

Payments out of the scheme property

The payments that may be made out of the scheme property to any person whether by way of remuneration for services, or reimbursement of expense and for each category of remuneration or expense, the following should be specified:

(1)

the current rates or amounts of such remuneration;

(2)

how the remuneration will be calculated and accrue and when it will be paid;

(3)

if notice has been given to unitholders of the authorised fund manager's intention to:

(a)

introduce a new category of remuneration for its services; or

(b)

increase the basis of any current charge; or

(c)

change the basis of the treatment of a payment from the capital property set out in COLL 8.5.13 R (2) (Payments);

particulars of that introduction or increase and when it will take place;

(4)

the types of any other charges and expenses that may be taken out of the scheme property; and

(5)

if, in accordance with COLL 8.5.13 R (2), all or part of the remuneration or expense are to be treated as a capital charge:

(a)

that fact; and

(b)

the basis of the charge which may be so treated.

13

Dealing

Details of:

(1)

the dealing days and times in the dealing day on which the authorised fund manager will receive requests for the sale and redemption of units;

(2)

the procedures for effecting:

(a)

the issue and cancellation of units;

(b)

the sale and redemption of units; and

(c)

the settlement of transactions;

(3)

the steps required to be taken by a unitholder in redeeming units before he can receive the proceeds including any relevant notice periods and the circumstances and periods where a deferral of payment as provided in COLL 8.5.11 R (3) (Sale and redemption) may be applied;

(4)

the circumstances in which the redemption of units may be suspended;

(5)

the days and times in the day on which recalculation of the price will commence;

(6)

details of the minimum number or value of each type of unit in the authorised fund which:

(a)

any one person may hold; and

(b)

may be the subject of any one transaction of sale or redemption;

(7)

the circumstances in which the authorised fund manager may arrange for, and the procedure for, a redemption of units in specie;

(8)

the circumstances in which the further issue of units in any particular class may be limited and the procedures relating to this:66

(9)

the circumstances in which direct issue or cancellation of units by the ICVC or the trustee (as appropriate) may occur and the relevant procedures for such issues and cancellations; and66

(10)

6whether a unitholder may effect transfer of title to units on the authority of an electronic communication and if so the conditions that must be satisfied in order to effect a transfer.6

14

Valuation of scheme property

Details as to:

(1)

how frequently and at what times of the day the scheme property will be regularly valued to determine the price at which units in the scheme may be purchased from or redeemed by the authorised fund manager and a description of any circumstance where the scheme property may be specially valued;

(2)

in relation to each purpose for which the scheme property must be valued, the basis on which it will be valued; and

(3)

how the price of units of each class will be determined, including whether a forward price or historic price basis is to be applied.

15

Sale and redemption charges

If the authorised fund manager makes any charges on sale or redemption of units, details of the charging structure and how notice will be provided to unitholders of any increase.

15A5

Property Authorised Investment Funds

For a property authorised investment fund, a statement that:

(1)

it is a property authorised investment fund;

(2)

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

(3)

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 if the authorised fund manager reasonably considers such action to be:

(a)

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

(b)

in the interests of the unitholders as a whole.

16

General information

Details as to:

(1)

when annual and half- yearly reports will be published; and

(2)

the address at which copies of the instrument constituting the scheme, any amending instrument and the most recent annual reports may be inspected and from which copies may be obtained.

17

Information on the umbrella

In the case of a scheme which is an umbrella, the following information:

(1)

that a unitholder may exchange units in one sub-fund for units in another sub-fund and that such an exchange is treated as a redemption and sale;

(2)

what charges may be made on exchanging units in one sub-fund for units in other sub-funds;

(3)

the policy for allocating between sub-funds any assets of, or costs, charges and expenses payable out of, the scheme property which are not attributable to any particular sub-fund;

(4)

in respect of each sub-fund, the currency in which the scheme property allocated to it will be valued and the price of units calculated and payments made, if this currency is not the base currency of the umbrella; and

(5)

for an ICVC, that the sub-funds are not "ring fenced" and in the event of an umbrella being unable to meet liabilities attributable to any particular sub-fund out of the assets attributable to that sub-fund, the remaining liabilities may have to be met out of the assets attributable to other sub-funds.

18

Application of the prospectus contents to an umbrella

For a scheme which is an umbrella, information required must be stated:

(1)

in relation to each sub-fund where the information for any sub-fund differs from that for any other; and

(2)

for the umbrella as a whole, but only where the information is relevant to the umbrella as a whole.

318A

Investment in overseas4 property through an intermediate holding vehicle3

If investment in an overseas4 immovable is to be made through an intermediate holding vehicle or a series of intermediate holding vehicles a statement disclosing the existence of that intermediate holding vehicle or series of intermediate holding vehicles and confirming that the purpose of that intermediate holding vehicle or series of intermediate holding vehicles is to enable the holding of overseas4 immovables by the scheme.3

19

Additional information

Any other material information which is within the knowledge of the directors of an ICVC or the manager of an AUT, or which the directors or manager would have obtained by the making of reasonable enquiries which investors and their professional advisers would reasonably require, and reasonably expect to find in the prospectus, for the purpose of making an informed judgement about the merits of investing in the authorised fund and the extent and characteristics of the risks accepted by so participating.

Report and accounts

COLL 8.3.5RRP
  1. (1)

    The authorised fund manager must prepare a report in respect of each annual accounting period and half-yearly accounting period.

  2. (2)

    [deleted]1

  3. (2A)

    Where the first annual accounting period of a scheme is less than 12 months, a half-yearly report need not be prepared.2

  4. (3)

    The authorised fund manager must within a reasonable time after the end of each relevant accounting period, publish the annual report and half-yearly report and provide a copy free of charge on request to any unitholder.

  5. (4)

    [deleted]2

    2
  6. (5)

    The authorised fund manager must provide free of charge on the request of any person eligible to invest in the scheme2 a copy of the latest annual or half-yearly report before the conclusion of any sale to such person2.

    22
  7. (6)

    The authorised fund manager must provide a copy of each annual and half-yearly report to the FSA.

  8. (7)

    For a scheme which is an umbrella, any annual report provided under (3) or (5) may be a report prepared under COLL 8.3.5AR (3), but the authorised fund manager must nevertheless provide free of charge the report prepared under COLL 8.3.5AR (2) if a unitholder or any other person eligible to invest in the scheme requests it.2

2Contents of the annual report

COLL 8.3.5ARRP
  1. (1)

    An annual report, other than for a scheme which is an umbrella, must contain:

    1. (a)

      the full accounts for the annual accounting period prepared in accordance with the requirements of the IMA SORP;

    2. (b)

      the report of the authorised fund manager in accordance with COLL 8.3.5C R (Authorised fund manager's report);

    3. (c)

      the report of the depositary in accordance with COLL 8.3.5D R (Report of the depositary); and

    4. (d)

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

  2. (2)

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

    1. (a)

      for each sub-fund, the full accounts required by (1)(a) and the report of the authorised fund manager in accordance with COLL 8.3.5C R;

    2. (b)

      an aggregation of the accounts required by (a);

    3. (c)

      the report of the depositary in accordance with COLL 8.3.5D R; and

    4. (d)

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

  3. (3)

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

    1. (a)

      for the sub-fund, the full accounts required by (1)(a) and the report of the authorised fund manager in accordance with COLL 8.3.5C R;

    2. (b)

      the report of the depositary in accordance with COLL 8.3.5D R; and

    3. (c)

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

  4. (4)

    The directors of an ICVC or the manager of an AUT must ensure that the accounts referred to in (1)(a), (2)(a) and (3)(a) give a true and fair view of the net income and the net gains and losses on the scheme property of the authorised fund or sub-fund for the relevant annual accounting period, and of the financial position of the authorised fund or sub-fund as at the end of that period.

2Contents of the half-yearly report

COLL 8.3.5BRRP
  1. (1)

    A half-yearly report on an authorised fund or sub-fund must contain:

    1. (a)

      the full 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 8.3.5C R.

  2. (2)

    For a scheme which is an umbrella, the authorised fund manager may choose whether the half-yearly report is prepared for the umbrella as a whole, or for each individual sub-fund, or both.

2Authorised fund manager's report

COLL 8.3.5CRRP

The report of the authorised fund manager must include:

  1. (1)

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

  2. (2)

    particulars of any fundamental or significant change to the authorised fund made since the date of the last report; and

  3. (3)

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

2Report of the depositary

COLL 8.3.5DRRP
  1. (1)

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

  2. (2)

    The depositary's report must contain:

    1. (a)

      a description, which may be in summary form, of the duties of the depositary under COLL 8.5.4 R (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 income, have not been carried out in accordance with the rules in this sourcebook and, where applicable, the OEIC Regulations and the instrument constituting the scheme; and

      2. (ii)

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

Alterations to the scheme and notices to Unitholders

COLL 8.3.6RRP
  1. (1)

    Any proposed change which would be reasonably considered to be a fundamental change to the scheme requires the prior sanction of an ordinary resolution of the unitholders.

  2. (2)

    Any proposed change to the scheme which is not within (1) but which would be reasonably considered to be significant, requires the giving of reasonable notice to Unitholders to become effective.

  3. (3)

    Alterations affecting only a particular sub-fund or class of units may be approved in accordance with (1) or (2) for the particular sub-fund or class of units, with the consent of, or, as the case may be, notice to, the relevant unitholders.

  4. (4)

    This rule and COLL 8.3.8 R (Meetings) will apply (unless the context requires otherwise) to alterations concerning unitholders of a particular sub-fund or class of units rather than the scheme or sub-fund as a whole.

Alterations to the scheme and notices to Unitholders: guidance

COLL 8.3.7GRP

Although account should be taken of the guidance on fundamental changes (COLL 4.3.5 G (Guidance on fundamental changes)) and significant changes (COLL 4.3.7 G (Guidance on significant changes)) the impact of any change to the scheme should be assessed individually based on the nature of the scheme and its investor profile.

Meetings

COLL 8.3.8RRP
  1. (1)

    Details of the procedures for the convening and conducting of meetings and resolutions must be set out in the instrument constituting the scheme and be reasonable and fair as between all relevant parties.

  2. (2)

    The authorised fund manager must record and keep minutes for six years of all proceedings to which COLL 8.3.6 R (Alterations to the scheme and notices to Unitholders) and this rule are relevant.

  3. (3)

    The provisions in COLL 4.4.12 R (Notices to Unitholders), COLL 4.4.13 R (Other notices) and COLL 4.4.14 G (References to writing and electronic documents) apply in relation to qualified investor schemes.