COLL 11.3 Co-ordination and information exchange for master and feeder UCITS

The authorised fund manager of a UCITS scheme that is a master UCITS must provide the management company of its feeder UCITS with all documents and information necessary for the latter to meet its regulatory obligations under the provisions of COLL applicable in respect of a UCITS scheme under this chapter4.

4The authorised fund manager of a UCITS scheme that is a feeder UCITS of a master UCITS which is an EEA UCITS scheme must make a binding arrangement with the management company of the master UCITS to obtain all documents and information necessary to meet its regulatory obligations under the Act.

[Note: article 60(1) first paragraph first sentence of the UCITS Directive]

1. (1)

   The authorised fund manager of a UCITS scheme that is a feeder UCITS must enter into a master-feeder agreement which, at a minimum, complies with COLL 11 Annex 1 R.

2. (2)

   Where a master UCITS and a feeder UCITS are managed by the same management company, the master-feeder agreement may be replaced by internal conduct of business rules which, at a minimum, comply with COLL 11 Annex 2 R.

3. (3)

   The authorised fund manager of a feeder UCITS must not invest in units of the master UCITS in excess of the limit applicable under COLL 5.2.11 R (9) (Spread: general) (20%) until the period of 30 calendar days referred to in COLL 4.8.3 R (1) (Information to be provided to Unitholders) has elapsed and the following have become effective:

   1. (a)

      the master-feeder agreement, or, if applicable under (2), the internal conduct of business rules;

   2. (b)

      the information-sharing agreement of the depositaries in accordance with COLL 11.4.1R (2) (Information-sharing agreement between depositaries); and

   3. (c)

      the information-sharing agreement of the auditors in accordance with COLL 11.5.1 R (Information-sharing agreement between auditors).

4. (4)

   An authorised fund manager of a feeder UCITS must make a copy of the master-feeder agreement or, where applicable, the internal conduct of business rules, available to unitholders free of charge on their request.

1. (1)

   Where the feeder UCITS and the master UCITS are UCITS schemes, the master-feeder agreement must provide that the law of a specified part of the United Kingdom applies to the agreement and that both parties agree to the exclusive jurisdiction of the courts of that part of the United Kingdom.

2. (2)

   Where the master UCITS is established in an EEA State, the master-feeder agreement must provide that the applicable law shall be UK law,4

   and that both parties agree to the exclusive jurisdiction of the courts of the UK4.

1. (1)

   4Where paragraph (2) applies a master-feeder agreement that is effective prior to IP completion day5 need not comply with COLL 11.3.5R(2).

2. (2)

   This paragraph applies where the applicable law of the master-feeder agreement was:

   1. (a)

      UK law before IP completion day5, and remains so; or

   2. (b)

      the law of the EEA State in which the master UCITS was established before IP completion day5, and remains so.

1. (1)

   The authorised fund managers of a master UCITS and its feeder UCITS must take appropriate measures to co-ordinate the timing of their net asset value calculation and publication, including the publication of dealing prices, in order to avoid market timing in their units, preventing arbitrage opportunities.

2. (2)

   Where 4the master UCITS 4is an EEA UCITS scheme managed by an EEA UCITS management company, the authorised fund manager must co-ordinate with that management company.

1. (1)

   An authorised fund manager of a feeder UCITS must monitor effectively the activity of the master UCITS.

2. (2)

   In performing this obligation, the authorised fund manager of the feeder UCITS may rely on information and documents received from the master UCITS, or where applicable, the master UCITS' management company, depositary or auditor, unless there is a reason for doubting their accuracy.

Where, in connection with an investment in the units of the master UCITS, a distribution fee, commission or other monetary benefit is received by:

1. (1)

   a feeder UCITS; or

2. (2)

   an authorised fund manager of a feeder UCITS; or

3. (3)

   any person acting on behalf of (1) or (2);

   that fee, commission or other monetary benefit must be paid into the scheme property of the feeder UCITS.

The authorised fund manager of a master UCITS must immediately inform the FCA of the identity of each feeder UCITS which invests in its units.

1. (1)

   An authorised fund manager of a master UCITS must not impose any preliminary charge or redemption charge on the feeder UCITS for the issue, sale, redemption or cancellation of units in the master UCITS.

2. (2)

   Where the authorised fund manager of a master UCITS requires any addition to or deduction from the consideration paid on the acquisition or disposal of units by a feeder UCITS which is, or is like, a dilution levy made in accordance with COLL 6.3.8 R (Dilution)3, it is to be treated as part of the price of the units and not as part of any charge.

An authorised fund manager of a master UCITS must ensure the timely availability of all information that is required in accordance with its obligations under the regulatory system, the general law and the instrument constituting the fund,2 to:

1. (1)

   the feeder UCITS (or where applicable its management company);

2. (2)

   the FCA4;

3. (3)

   the depositary of the feeder UCITS; and

4. (4)

   the auditor of the feeder UCITS.

The authorised fund manager of a UCITS scheme that operates, or intends to operate, as a master UCITS must:

1. (1)

   not enter into a master-feeder agreement or, where applicable, internal conduct of business rules in accordance with COLL 11.3.2R (2) unless it is satisfied on reasonable grounds that the arrangements with the feeder UCITS will not unfairly prejudice the interests of any other unitholder or class of unitholders in the master UCITS;

2. (2)

   consider, in relation to:

   1. (a)

      each item of information it makes available to the feeder UCITS or its management company; and

   2. (b)

      each matter notified by the depositary of the master UCITS in accordance with COLL 11.4.3 R (Notification of irregularities);

      whether it would unfairly prejudice the interests of those unitholders in the master UCITS other than the feeder UCITS by not making that information available to them, or by not informing them of that matter at the same time in an appropriate manner; and

3. (3)

   in relation to any matter within (2)(b) where it does not notify other unitholders at the same time:

   1. (a)

      record the grounds for determining that the interests of those unitholders are not unfairly prejudiced by its decision; and

   2. (b)

      inform all unitholders of that matter in an appropriate manner and timescale.