CIS 7.2 Directors

If there is only one director of the type described in CIS 7.1.4 G (1)(b), it must be an ACD or an EEA UCITS management company, but if there is more than one director that is a body corporate, the directors must appoint one of the directors that is a body corporate to be the ACD.

If an EEA UCITS management company is the sole director, that company must carry out the functions of the ACD as set out in CIS 7.3.1 R (Functions of the ACD).1

At any time when the ACD is not the sole director and (5) does not apply, no director other than the ACD:

1. (a)

   is responsible for any of the functions for which the ACD is made responsible by CIS 7.3.1 R (The ACD), but the other directors must exercise reasonable care to ensure that the ACD undertakes those functions in a competent manner and the ACD must give those directors the information and explanations they consider necessary for this purpose; and

2. (b)

   has any power to undertake the management of the ICVC to the extent that the management is to be undertaken by the ACD in accordance with CIS 7.3.1 R.

In the event of:

1. (a)

   any person becoming or ceasing to be a director;

2. (b)

   the appointment of an ACD being terminated;

3. (c)

   a new ACD being appointed; or

4. (d)

   a corporate director (including the ACD) becoming aware of any change of its controller;

the FSA must, immediately after the event, be notified in writing of that event; in the case of (a), by the ACD; in the case of (b), by the ACD whose appointment is being terminated; in the case of (c), by the new ACD; and in the case of (d), by the corporate director concerned.

A director must not appoint an alternate director.

At any time when there is no person acting as ACD, the directors have the responsibilities and duties that an ACD would have had under CIS 7.3.1 R (Functions of the ACD), but this does not affect the powers of the directors under CIS 7.6.1 R (Committees and appointments).

At any time that (5) applies, the directors must retain the services of one or more authorised persons to assist them in performing the functions referred to in CIS 7.3.1 R(2) and (3) (Functions of the ACD).

Where a document is to be executed by the ICVC in accordance with regulation 57 of the OEIC regulations, unless (5) applies, it must be executed by the ACD and may also be signed (or executed) by one or more of any other directors.

At any time when the ACD is the sole director it must, to the extent that such action is not already required by the OEIC regulations or by rules in this sourcebook, be responsible for and have the duty to take the action envisaged by CIS 7.3.1 R(3)(d).

At any time when the ACD is sole director this rule (CIS 7.2.1 R) does not exclude the ACD's functions under CIS 7.3.1 R(2) and (3) which are then necessary under the requirements of the OEIC regulations.

Before, or on, the termination of the appointment of an ACD, the directors (or director) of the ICVC must take all practicable steps to appoint as the new ACD another person who is qualified to act as ACD and whose appointment must, if made before that termination, take effect immediately on that termination.

If the ICVC ceases to have any director, the depositary has power to appoint a body corporate as a director and the ACD of the ICVC (provided the body corporate is an authorised person and is not prohibited from acting as the ACD of an ICVC by or under any rule).

For an ICVC that holds annual general meetings under the OEIC Regulations, the appointment of an ACD (other than the first ACD), whether under (1) or (2), must terminate at the close of the annual general meeting next following the date of the appointment or (if later) upon the expiration of 12 months from the date the appointment takes effect, unless the appointment has been approved by a resolution of the shareholders before the close of that annual general meeting or expiration (as the case may be).2

An ACD must not voluntarily terminate its appointment as ACD unless the termination is at the same time as the commencement of the appointment of a successor ACD.

The appointment of an ACD as ACD terminates immediately upon it ceasing to be a director.

The appointment of an ACD as ACD terminates if a notice of termination of that appointment, the terms of which have been approved by a resolution of the board of directors, is given to the ACD.

If there is no director other than the ACD, the appointment of an ACD as ACD terminates if a notice of termination of that appointment is given by the depositary to the ACD and to the ICVC, following any of the following events:

1. (a)

   the ACD goes into liquidation (except a voluntary liquidation for the purpose of a scheme of arrangement upon terms previously approved in writing by the depositary); or

2. (b)

   a receiver is appointed in relation to the ACD or any part of it; or

3. (c)

   an administration order is made in relation to the ACD under section 8 of the Insolvency Act 1986.

Any termination under (2) or (3) takes effect when the notice is given, or on any subsequent time for its effect stated in the notice, or, if later, the time at which the termination is permitted to take effect under regulation 21 of the OEIC regulations (the Authority's approval for certain changes in respect of a company).

Unless the termination of the appointment of an ACD takes effect at the same time as the appointment of a successor ACD, the depositary must ensure that the termination is published in a manner that the depositary considers appropriate.

The depositary is entitled to be reimbursed out of the scheme property for its out of pocket expenses in complying with (5).