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  1. Point in time
    2006-07-07

CIS 14.4 Winding up an AUT

Explanation of CIS 14.4

CIS 14.4.1G

This section (CIS 14.4) deals with the circumstances in which an AUT falls to be wound up and the manner of winding up. Under section 256 of the Act, the manager or trustee of an AUT may request the FSA to revoke the authorisation order in respect of that AUT. Section 257 of the Act gives the FSA the power to make any necessary directions.

When an AUT is to be wound up

CIS 14.4.2R
  1. (1)

    Upon the happening of any of the events specified in paragraph (2) and not otherwise:

    1. (a)

      CIS 4 (Single-pricing and dealing) or CIS 15 (Dual-pricing and dealing), whichever is applicable and CIS 5 or CIS 5A (Investment and borrowing powers) cease to apply to the AUT; 1

    2. (b)

      the trustee must cease to issue and cancel units in the AUT;

    3. (c)

      the manager must cease to sell and redeem units in the AUT;

    4. (d)

      the manager must cease to arrange the issue or cancellation of units under CIS 4.5.3 R (Issues and cancellations through the authorised fund manager) or CIS 15.5.3 R (Issues and cancellations through the manager); and

    5. (e)

      the trustee must proceed to wind up the AUT in accordance with CIS 14.4.3 R.

  2. (2)

    The events referred to in (1) are:

    1. (a)

      the authorisation order is revoked; or

    2. (b)

      in response to a request to the FSA by the manager or the trustee for the revocation of the authorisation order, the FSA has agreed, albeit subject to there being no material change in any relevant factor, that, on the conclusion of the winding up of the AUT, the FSA will accede to that request; or

    3. (c)

      the expiration of any period specified in the trust deed as the period at the end of which the AUT is to terminate; or

    4. (d)

      the effective date of a duly approved scheme of arrangement, which is to result in the AUT that is subject to the scheme of arrangement being left with no property; and

    5. (e)

      The date on which a relevant pension scheme is notified in writing by the Occupational Pensions Schemes Regulatory Authority that the scheme is no longer registered under the Welfare and Pensions Reform Act 1999 as a stakeholder pension scheme.

  3. (3)

    This rule (CIS 14.4.2 R) is without prejudice to CIS 13.1.3 R (Suspension and resumption of dealing: requirement) and to any order or direction made under section 257 or 258 of the Act.

Manner of winding up

CIS 14.4.3R
  1. (1)

    In a case falling within CIS 14.4.2 R (2)(d), the trustee must wind up the AUT in accordance with the approved scheme of arrangement.

  2. (2)

    In any other case falling within CIS 14.4.2 R:

    1. (a)

      the trustee must, as soon as practicable after the AUT falls to be wound up, realise the scheme property;

    2. (b)

      after paying therefrom or retaining adequate provision for all liabilities properly so payable and for the costs of the winding up, the trustee must distribute the proceeds of that realisation to the Unitholders and the manager (upon production by them of such evidence as the trustee may reasonably require as to their entitlement thereto) proportionately to their respective interests in the AUT as at the date of the relevant event referred to in CIS 14.4.2 R; and

    3. (c)

      any unclaimed net proceeds or other cash (including unclaimed distribution payments) held by the trustee after the expiration of twelve months from the date on which they became payable must be paid by the trustee into court (or, in Scotland, as the court may direct), subject to the trustee having a right to retain any expenses incurred by him relating to that payment.

  3. (3)

    In the case of an AUT which is a relevant pension scheme, payments must not be made to Unitholders in the AUT. The realisation proceeds must be paid by the trustee in accordance with the destinations specified in the trust deed.

  4. (4)

    Where the trustee and one or more Unitholders agree, the requirement in (2) to realise the scheme property does not apply to that part of the property proportionate to the entitlement of that or those Unitholders. The trustee may distribute that part in the form of property, after making adjustments or retaining provisions as appears to the trustee appropriate for ensuring that, that or those Unitholders bear a proportional share of the liabilities and costs.

  5. (5)

    On completion of the winding up in respect of the events referred to in CIS 14.4.2 R (2)(b), (c) or (d), the trustee must notify the FSA in writing of that fact and at the same time the manager or trustee must request the FSA to revoke the relevant authorisation order.

Accounting and reports during winding up

CIS 14.4.4R
  1. (1)

    Subject to any order of the court, and to paragraphs (2) and (3), while an AUT is being wound up, whether under CIS 14.4.3 R or otherwise:

    1. (a)

      the annual and half-yearly accounting periods continue to run;

    2. (b)

      the provisions about annual and interim allocation of income (in CIS 9) continue to apply; and

    3. (c)

      annual and half-yearly reports (in CIS 9) continue to be required.

  2. (2)

    Where, for any annual or half-yearly accounting period, the trustee (after consulting the manager (if appropriate) and the FSA) has taken reasonable care to determine that timely production of an annual or half-yearly report is not required in the interests of the Unitholders or the FSA, it may direct that immediate production of the report may be dispensed with.

  3. (3)

    The period in question in (2) must be reported on together with the following period in the next report prepared for the purposes of (1) or (4).

  4. (4)

    At the conclusion of the winding up, the accounting period then running is regarded as the final annual accounting period.

  5. (5)

    Within two calendar months after the end of the final accounting period, the annual reports of the manager and trustee must be published and sent to each person who was a Unitholder immediately before the end of the final accounting period.