CIS 5A.16 Cover for sales

This section (CIS 5A.16) applies to ICVCs other than futures and options schemes and geared futures and options schemes and to managers and trustees of AUTs other than futures and options schemes or geared futures and options schemes.

1. (1)

   No agreement by or on behalf of an ICVC or on behalf of an AUT to dispose of property or rights may be made:

   1. (a)

      unless the obligation to make the disposal and any other similar obligation could immediately be honoured by the authorised fund by delivery of property or the assignment (or, in Scotland, assignation) of rights; and

   2. (b)

      the property and rights at (a) are owned by the authorised fund at the time of the agreement.

2. (2)

   Paragraph (1) does not apply to a transaction in derivatives or a forward transaction under CIS 5A.13 (Efficient portfolio management).