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LR 15.4 Continuing obligations

Compliance with LR 9

LR 15.4.1R

A closed-ended investment fund must comply with all of the requirements of LR 9 (Continuing obligations) subject to the modifications and additional requirements set out in this section.

Investment policy

LR 15.4.1AR

1A closed-ended investment fund must, at all times, have a published investment policy which complies with LR 15.2.7 R.

LR 15.4.1BG

1A closed-ended investment fund should have regard to the guidance in LR 15.2.8 G at all times.

Investment activity and compliance with investment policy

LR 15.4.2R

A closed-ended investment fund must, at all times, invest and manage its assets:

  1. (1)

    in a way which is consistent with its object of spreading investment risk; and

  2. (2)

    in accordance with its published investment policy.

LR 15.4.3G

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LR 15.4.3AR

1A closed-ended investment fund must comply with LR 15.2.3A R at all times.

LR 15.4.4R

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LR 15.4.4AG

1A closed-ended investment fund should have regard to the guidance in LR 15.2.4A G at all times.

Cross-holdings

LR 15.4.5R

A closed-ended investment fund must, when making an acquisition of a constituent investment, observe the principles relating to cross-holdings in LR 15.2.5 R.

Feeder funds

LR 15.4.6R

If a closed-ended investment fund principally invests its funds in the manner set out in LR 15.2.6 R1, the closed-ended investment fund must ensure that LR 15.2.6 R is complied with at all times.

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LR 15.4.6AG

1LR 15.2.6 R and LR 15.4.6 R are not intended to require the closed-ended investment fund to be able to control or direct the master fund or intermediary (as the case may be). But if the closed-ended investment fund becomes aware that the master fund or intermediary (as the case may be) is not investing or managing its investments in accordance with that rule it will need to immediately consider withdrawal of its funds from the master fund or intermediary (as the case may be) or other appropriate action so that it is no longer in breach of the rules.

Independence and effective management4

LR 15.4.7R
LR 15.4.7AR

4The board of directors or equivalent body of the issuer must effectively monitor and manage the performance of its key service providers, including any investment manager appointed by the issuer, on an on-going basis.

6Material changes to investment policy 6

LR 15.4.8R

Unless LR 15.4.8A R applies, a6 closed-ended investment fund must :6

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  1. (1)

    submit any proposed material change to its published investment policy to the FCA for approval; and6

  2. (2)

    having obtained the FCA's approval, obtain the prior approval of its shareholders to any material change to its published investment policy.6

LR 15.4.8AR

6A closed-ended investment fund is not required to seek the FCA’s approval for a material change to its published investment policy if:

  1. (1)

    the change is proposed to enable the winding up of the closed-ended investment fund; and

  2. (2)

    the winding up:

    1. (a)

      is in accordance with the constitution of the closed-ended investment fund; and

    2. (b)

      will be submitted for approval by the shareholders of the closed-ended investment fund at the same time as the proposed material change to the investment policy.

LR 15.4.9G

In considering what is a material change to the published investment policy, the closed-ended investment fund should have regard to the cumulative effect of all the changes since its shareholders 1last had the opportunity to vote on the investment policy or, if they have never voted, since the admission to listing.

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Conversion of an existing listed class of equity shares2

LR 15.4.10R

An existing listed class of equity shares 2may not be converted into a new class or an unlisted class unless prior approval has been given by the shareholders of1 that existing class.

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Further issues

LR 15.4.11R
  1. (1)

    Unless authorised by its shareholders1, a closed-ended investment fund may not issue further shares of the same class as existing shares (including issues of treasury shares) for cash at a price below the net asset value per share of those shares unless they are first offered pro rata to existing holders of shares of that class.

    1
  2. (2)

    When calculating the net asset value per share, treasury shares held by the closed-ended investment fund should not be taken into account.

Cancellation of premium listing

LR 15.4.11AG
LR 15.4.12R

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LR 15.4.13R

[deleted]

LR 15.4.14R

[deleted]

LR 15.4.15R

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LR 15.4.16R

[deleted]

LR 15.4.17R

[deleted]

LR 15.4.18R

[deleted]

LR 15.4.19R

[deleted]

LR 15.4.20R

[deleted]

LR 15.4.21R

[deleted]

LR 15.4.22G

[deleted]

LR 15.4.23R

[deleted]

LR 15.4.24R

[deleted]

LR 15.4.25R

[deleted]

Externally managed companies

LR 15.4.26R

3A closed-ended investment fund is not required to comply with LR 9.2.20 R.

5Independent business

LR 15.4.27R

5A closed-ended investment fund is not required to comply with LR 9.2.2A R to LR 9.2.2G R.

5Notifications to the FCA

LR 15.4.28R
  1. (1)

    5A closed-ended investment fund is not required to comply with LR 9.2.23 R in so far as it relates to LR 9.2.2A R, LR 9.2.2E R and LR 9.2.2F R.

  2. (2)

    A closed-ended investment fund is not required to comply with LR 9.2.24 R to LR 9.2.25 R.

5Annual financial statement

LR 15.4.29R

5A closed-ended investment fund is not required to comply with LR 9.8.4R (14).

5Election of independent directors

LR 15.4.30R

5A closed-ended investment fund is not required to comply with LR 13.8.17 R.