CIS 10.4 Information to be included in annual and half-yearly reports

This section (CIS 10.4) applies to the directors of an ICVC (for a report on an ICVC) or to the manager (for report on an AUT), except:

1. (1)

   CIS 10.4.6 R (Report of the depositary of an ICVC) which applies only to the depositary of an ICVC;

2. (2)

   CIS 10.4.7 R (Report of the trustee of an AUT) which applies only to the trustee of an AUT; and

3. (3)

   CIS 10.4.8 R (Report of the auditor) and CIS 10.4.9 R (Auditor's statement relating to short form accounts) which apply to the auditors of the authorised fund, appointed in accordance with paragraph (4) of Schedule 5 of the OEIC regulations (for an ICVC) or appointed under CIS 7.8.5 R (for an AUT).

The matters set out in (1) - (16) must be included in each report of the directors (for a report on an ICVC) and in each report of the manager (for a report on an AUT), except where otherwise indicated:1

1. (1)

   the names and addresses of :

   1. (a)

      the authorised fund manager;

   2. (b)

      the depositary;

   3. (c)

      the registrar;

   4. (d)

      any investment adviser;

   5. (e)

      the auditor; and

   6. (f)

      for a property scheme, the standing independent valuer;

2. (2)

   (for a report of the directors), the names of any directors other than the ACD;

3. (3)

   a statement that :

   1. (a)

      (for a report of the manager) the AUT is an authorised unit trust scheme under section 243 of the Act (Authorisation orders); or

   2. (b)

      (for a report of the directors) the ICVC is an investment company with variable capital under regulation 12 (Authorisation) of the OEIC regulations;

4. (4)

   (for a report of the directors) a statement that the shareholders of the ICVC are not liable for the debts of the ICVC;

5. (5)

   a statement as to which of the types of authorised fund in CIS 2.1.4 R (Constitution) the authorised fund belongs; 1

6. (6)

   the investment objectives of the authorised fund;

7. (7)

   the ICVC's (for a report of the directors) or manager's (for a report of the manager) policy for achieving those objectives;

8. (8)

   a review of the ICVC's (for a report of the directors) or manager's (for a report of the manager) investment activities during the period to which the report relates;

9. (9)

   where the directors of an ICVC or the manager of an AUT have determined that the accounts contained in the report should be short form accounts, a statement that a report containing the full accounts is available on request;

10. (10)

    particulars of any significant change in the prospectus made since the date of the last report;

11. (11)

    particulars of any significant change in the instrument constituting the scheme made since the date of the last report;

12. (12)

    a statement of any sub-division or consolidation of units which has been effected during the period to which the report relates (but, for an ICVC, other than any as between smaller and larger denomination shares effected under CIS 2.5.2 G (Characteristics of larger and smaller denomination shares));

13. (13)

    any other significant information which would enable holders to make an informed judgement on the development of the activities of the authorised fund during this period and the results of those activities as at the end of that period;

14. (14)

    for a report of the directors included in a report on an umbrella scheme (prepared in accordance with CIS 10.3.3 R (2) or CIS 10.3.4 R (2)), a statement to the effect that, as a sub-fund is not a legal entity, if the assets attributable to any sub-fund were insufficient to meet the liabilities attributable to it, the shortfall might have to be met out of the assets attributable to one or more other sub-funds of the ICVC; and

15. (15)

    for a report on a sub-fund, prepared in accordance with CIS 10.3.3 R (3)or CIS 10.3.4 R (3), which is not part of a report on the umbrella scheme of which the sub-fund is part:

    1. (a)

       a statement whether the auditor's report on the annual accounts of the umbrella scheme for the period in question was unqualified or qualified and, if it was qualified, that report in full together with any further material needed to understand the qualification;

    2. (b)

       a statement that a report relating to the umbrella scheme as a whole is available from the authorised fund manager on request; and

    3. (c)

       a statement equivalent to that required by (14) making it clear that the shortfall, or part of it, might have to be met out of the sub-fund to which the report relates.

16. (16)

    In the case of a UCITS scheme which invests a substantial proportion of its assets in other collective investment schemes, a statement as to the maximum proportion of management fees charged to the scheme itself and to other collective investment schemes in which that scheme invests.1

For a report on an umbrella scheme prepared in accordance with CIS 10.3.3 R (2) or CIS 10.3.4 R (2):

1. (1)

   the information required by CIS 10.4.2 R (1) to CIS 10.4.2 R (13) must be given in respect of each sub-fund if it would vary from that given in respect of the umbrella scheme as a whole; and

2. (2)

   CIS 10.4.2 R (5) applies as if it required a statement in respect of each sub-fund that it has investment powers equivalent to those of an authorised fund of a stated type under CIS 2.1.4 R (Constitution).1

A report of the directors of an ICVC or a report of the manager of an AUT containing short form accounts for any annual accounting period must:

1. (1)

   state whether the report of the auditor on the full accounts was unqualified or qualified and, if it was qualified, contain a copy of that report in full together with any further material needed to understand the qualification; and

2. (2)

   state whether the report of the auditor contained a statement under (3), (4) or (5) of CIS 10.4.8 R and, if so, set out the statement or statements in full.

Each report of the directors of an ICVC or each report of the manager of an AUT must contain a comparative table which must set out:

1. (1)

   a performance record over the last five calendar years, or if the authorised fund has not been in existence during the whole of that period, over the whole period in which it has been in existence, showing:

   1. (a)

      the highest and the lowest price (or, for dual-priced AUTs, the highest saleprice and lowest redemption price) of a unit of each class in issue during each of those years; and

   2. (b)

      the net income distributed (or, for accumulation units, allocated) for a unit of each class in issue during each of those years, taking account of any sub-division or consolidation of units that occurred during that period;

2. (2)

   as at the end of each of the last three annual accounting periods (or all of the authorised fund's annual accounting periods, if less than three):

   1. (a)

      the total net asset value of the scheme property at the end of each of those years;

   2. (b)

      the net asset value per unit of each class; and

   3. (c)
      1. (i)

         (for a report of the directors) the number of units of each class in issue; or

      2. (ii)

         (for a report of the manager) the number of units of each class in existence or treated as in existence;

3. (3)

   if, in the period covered by the table:

   1. (a)

      the authorised fund has been the subject of any event (such as a scheme of arrangement) having a material effect on the size of the authorised fund, but excluding any issue or cancellation of units for cash; or

   2. (b)

      there have been changes in the investment objectives of the authorised fund;

   an indication, related in the body of the table to the relevant year in the table, of the date of the event or change in the investment objectives and a brief description of its nature; and

4. (4)

   for an umbrella scheme, the information required by (1) to (3) for each sub-fund of the umbrella scheme, instead of the information for the umbrella scheme as a whole.

1. (1)

   The depositary must make an annual report to shareholders which must be delivered to the directors in good time to enable its inclusion in the annual report.

2. (2)

   That report must contain:

   1. (a)

      a description, which may be in summary form, of the duties of the depositary under CIS 7.4.1 R (General duties of the depositary) and in respect of the safekeeping of the scheme property;

   2. (b)

      a statement whether, in any material respect,:

      1. (i)

         the issue, sale, redemption and cancellation, and calculation of the price of the ICVC'sshares and the application of the ICVC's income, have not been carried out in accordance with the rules in this sourcebook and, where applicable, the OEIC regulations and the instrument of incorporation of the ICVC;

      2. (ii)

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

1. (1)

   The trustee must enquire into the conduct of the manager in the management of the AUT in each annual accounting period and must report on that conduct to the Unitholders. That report must be delivered to the manager in good time to enable its inclusion in the annual report.

2. (2)

   The report of the trustee must state whether in the trustee's opinion the manager has managed the AUT in that period:

   1. (a)

      in accordance with the investment and borrowing powers and restrictions applicable to the AUT; and

   2. (b)

      otherwise in accordance with the provisions of the trust deed and the rules in this sourcebook.

3. (3)

   If the manager has not done so, the trustee's report must describe any material failures and the steps which the trustee has taken as a result of those failures.

The report of the auditor to the holders on the accounts of the authorised fund, or on the aggregated accounts of the umbrella scheme (or for a report prepared for the purposes of CIS 10.3.3 R (3), on the accounts of the sub-fund) must state:

1. (1)

   whether, in the auditor's opinion, the accounts have been properly prepared in accordance with the IMA SORP, the rules in this sourcebook, and the instrument constituting the scheme; 2

2. (2)

   whether, in the auditor's opinion the accounts give a true and fair view of the net income and the net gains or losses on the scheme property of the authorised fund (or, as the case may be the scheme property attributable to the sub-fund) for the annual accounting period in question and the financial position of the authorised fund or sub-fund as at the end of that period;

3. (3)

   if the auditor is of the opinion that proper accounting records for the authorised fund (or, as the case may be, sub-fund) have not been kept or that the accounts are not in agreement with those records, that fact;

4. (4)

   if the auditor has not been given all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, that fact; and

5. (5)

   if the auditor is of the opinion that the information given in the report of the directors or in the report of the manager for that period is inconsistent with the accounts, that fact.

In relation to short form accounts for any annual accounting period, the auditor must state whether, in the auditor's opinion, the short-form accounts are:

1. (1)

   consistent with the full accounts;

2. (2)

   prepared in accordance with:

   1. (a)

      the IMA SORP so far as it relates to short-form accounts; and2

   2. (b)

      the rules in this sourcebook and the instrument constituting the scheme.