CIS 8.1 Introduction

This chapter assists in meeting the regulatory objective of protecting consumers by laying down conditions governing charges imposed on investors when buying or selling units and governing payments out of scheme property.

The conditions are intended to provide clarity as to the nature of permitted charges and payments and clear disclosure for existing investors of any increases in charges and payments to the authorised fund manager.

The instrument of incorporation of an ICVC will, in accordance with the OEIC regulations, provide that the charges or expenses of the ICVC may be taken out of the scheme property. This chapter:

1. (a)

   prohibits, or provides conditions applying to, the payment out of the scheme property of certain types of charges and expenses;

2. (b)

   makes certain payments conditional on disclosure in the prospectus; and

3. (c)

   governs the allocation of payments between capital and income.

For an AUT, this chapter provides what types of charge may be made on investors when they buy or sell units and what types of expenses may be met out of the scheme property. Provisions governing the allocation of payments between capital and income are also contained in this chapter.