CIS 7.4 The depositary

The depositary must take reasonable care to ensure that:

1. (a)

   the ICVC is managed in accordance with:

   1. (i)

      CIS 4 (Single-pricing and dealing);

   2. (ii)

      CIS 9 (Income); and

   3. (iii)

      in relation to umbrella schemes, CIS 12.5.4 R (Income) and CIS 12.5.7 R (Investment and borrowing powers);

2. (b)

   the ICVC is managed without infringement of any provision of the instrument of incorporation that relates to:

   1. (i)

      the initial offer or issue or cancellation or sale or redemption or pricing of shares;

   2. (ii)

      the dilution levy, dilution adjustment or SDRT provision;1

   3. (iii)

      the valuation of the scheme property;

   4. (iv)

      accounting periods (including half-yearly accounting periods);

   5. (v)

      the calculation of income available for allocation;

   6. (vi)

      the allocation, payment or retention of income; and

   7. (vii)

      unclaimed distributions; and

3. (c)

   decisions about the constituents of the scheme property do not cause an infringement of CIS 5 or CIS 5A (Investment and borrowing powers).2

The depositary must, in so far as not required under (1)(a)(i), take reasonable care to ensure on a continuing basis that:1

1. (a)

   the ACD is adopting procedures and methods which are appropriate to ensure that the price of a share is calculated for each valuation point in accordance with CIS 4 (Single-pricing and dealing); and

2. (b)

   the ACD has maintained sufficient records to show compliance with CIS 4 (Single-pricing and dealing).

The depositary, when acting in its capacity as depositary, must act solely in the interests of the shareholders.

The depositary:

1. (a)

   must take reasonable care to ensure that;

   1. (i)

      the ACD considers whether or not to exercise the power provided by CIS 4.6.3 R (1)(c) and (d) (Dilution levy and SDRT provision) and the amount or rate of any SDRT provision that is imposed; and

   2. (ii)

      in that consideration the ACD has, so far as the depositary is aware, taken account of all factors that are material and relevant to the ACD's decision; and

2. (b)

   subject to (a), has no duty in respect of the ACD's exercise of discretion referred to in (a).

The depositary:

1. (a)

   must also take reasonable care to ensure that;

   1. (i)

      the ACD considers whether or not to exercise the power provided by CIS 4.6.3 R (1)(a) or (b) (Dilution levy and SDRT provision) or CIS 4.6.4 R (Dilution adjustment) (as the case may be) and, if applicable, the rate or amount of any dilution levy or dilution adjustment that is imposed;

   2. (ii)

      in that consideration the ACD has, so far as the depositary is aware, taken account of all factors that are material and relevant to the ACD's decision; and

   3. (iii)

      when the ACD considers whether or not to exercise the power under CIS 4.6.4 R (Dilution adjustment), the ACD has, so far as the depositary is aware, acted in accordance with the restrictions imposed by that rule; and

2. (b)

   subject to (a), has no duty in respect of the ACD's exercise of discretion referred to in (a).1

The depositary must inform the FSA immediately upon becoming aware of any circumstance where there is no longer certainty that:

1. (a)

   the ICVC is managed in accordance with CIS 7.4.1R(a)(i), (ii) and (iii) (General duties of the depositary); and

2. (b)

   decisions about the constituents of the scheme property do not cause an infringement of CIS 5 (Investment and borrowing powers);

unless the depositary has taken reasonable care to determine that the circumstance in question is not, and is not likely to become, materially significant.

If the depositary becomes aware of a circumstance which it needs to investigate in order to ascertain whether its duty to inform the FSA under (1) arises, then:

1. (a)

   the depositary must inform the FSA of that circumstance immediately after it determines, having taken reasonable care that the circumstance is, or is likely to become, materially significant, or if no such determination is made within 90 days of so becoming aware, then the depositary must inform the FSA immediately; or

2. (b)

   the FSA need not be notified where the depositary determines the circumstance is not, or is not likely to become, materially significant.

The depositary must not retire voluntarily unless, before its retirement, it has ensured that the new depositary has been informed of any circumstance of which the retiring depositary has informed the FSA in accordance with (1) or (2), or which is being investigated for the purpose of (2).

The depositary is responsible for the safekeeping of all of the scheme property of the ICVC (other than tangible movable property) entrusted to it. The depositary's duties under this paragraph are not restricted by (2).

The depositary must:

1. (a)

   take all steps and execute all documents to ensure that transactions properly entered into for the account of the ICVC in accordance with CIS 7.2.1 R (5)and (6) (The directors) or CIS 7.3.1 R (3)(a)(The ACD) are completed;

2. (b)

   ensure that any of that scheme property in registered form is, as soon as practicable, registered in the name of the depositary, its nominee or a person retained by it under CIS 7.6.1 R (Committees and appointments);

3. (c)

   take into its custody or under its control all of the deeds and other documents relating to title to the scheme property other than in respect of transactions in derivatives or forward transactions; and

4. (d)

   ensure that any transaction in derivatives or forward transaction is entered into in such a manner as to ensure that any resulting benefit is received by the depositary.

The depositary is responsible for the collection of any income due to be paid for the account of the ICVC and must hold and deal with any income so collected in accordance with CIS 9 (Income).

The depositary must keep such records as are necessary:

1. (a)

   to enable it to comply with the rules in this sourcebook; and

2. (b)

   to demonstrate that it has achieved such compliance.

The depositary must, subject to (2), take all steps and execute all such documents as are necessary to secure that instructions properly given to it by the ACD as to the exercise of rights (including voting rights) attaching to the ownership of scheme property are carried out.

The depositary may exercise (or not exercise) any right of voting conferred by any of the scheme property of the ICVC which consists of units in any other collective investment scheme managed or otherwise operated by any director of the ICVC or by an associate of any such director, but only after consultation with the directors of the ICVC.