COLL 3.3 Units

This section applies to an authorised fund manager, an ICVC and the depositary4 of an AUT or ACS.4

For a currency class unit:

1. (1)

   the currency of the class concerned must not be the base currency (or, in the case of a sub-fund which, in accordance with a statement in the prospectus, is to be valued in some other currency, the currency of the class may be in the base currency, but must not be in that other currency);

2. (2)

   the price must be expressed in the currency of the class concerned;

3. (3)

   any distribution must be paid in the currency of the class concerned; and

4. (4)

   statements of amounts of money or values included in statements and in tax certificates must be given in the currency of the class concerned (whether or not also given in the base currency).

1. (1)

   If any class of units in an authorised fund has different rights from another class of units in that fund, the instrument constituting the fund5 must provide how the proportion of the value of the scheme property and the proportion of income available for allocation attributable to each such class must be calculated.

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2. (2)

   For an authorised fund which is not an umbrella, the instrument constituting the fund5 must not provide for any class of units in respect of which:

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   1. (a)

      the extent of the rights to participate in the capital property, income property or distribution account would be determined differently from the extent of the corresponding rights for any other class of units; or

   2. (b)

      payments or accumulation of income or capital would differ in source or form from those of any other class of units.

3. (3)

   For a scheme which is an umbrella, the provisions in (2)(a) apply to classes of units in respect of each sub-fund as if each sub-fund were a separate scheme.

4. (4)

   Paragraphs (2) and (3) do not prohibit a difference between the rights attached to one class of units and to another class of units that relates solely to:

   1. (a)

      the accumulation of income by way of periodical credit to capital rather than distribution; or

   2. (b)

      charges and expenses that may be taken out of the scheme property or payable by the unitholders; or

   3. (c)

      the currency in which prices or values are expressed or payments made; or1

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   4. (d)

      the use of derivatives and forward transactions entered into for the purpose of reducing the effect of fluctuations in the rate of exchange between the currency of a class of units 2

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      and either the base currency of the scheme or any currency in which all or part of the scheme property is denominated or valued (in this section referred to as a "

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      class hedging transaction").1

1A class hedging transaction must:

1. (1)

   be undertaken in accordance with the requirements of COLL 5 (Investment and borrowing powers); and

2. (2)

   (for the purposes of valuing scheme property and calculating the price of units in accordance with COLL 6.3 (Valuation and pricing)) be attributed only to the class of units 2for which it is undertaken.

1. (1)

   This rule applies whenever the instrument of incorporation of an ICVC provides, in relation to any class, for smaller denomination shares and larger denomination shares.

2. (2)

   Whenever a registered holding includes a number of smaller denomination shares that can be consolidated into a larger denomination share of the same class, the ACD must consolidate the relevant number of those smaller denomination shares into a larger denomination share.

3. (3)

   The ACD may, to effect a transaction in shares, substitute for a larger denomination share the relevant number of smaller denomination shares, in which case (2) does not apply to the resulting smaller denomination shareholding or holdings until immediately after the completion of the transaction.

1. (1)

   The directors of an ICVC or the authorised fund manager4 of an AUT or ACS4 may, unless expressly forbidden to do so by the instrument constituting the fund,5 determine that:

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   1. (a)

      each unit of any class is to be subdivided into two or more units; or

   2. (b)

      units of any class are to be consolidated.

2. (2)

   The ICVC or theauthorised fund manager of an AUT or ACS4 must (unless it has done so before the sub-division or consolidation became effective) immediately give notice to each unitholder (or the first named of joint unitholders) of any sub-division or consolidation under (1).

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If there is any arrangement intended to result in a particular capital or income return from a holding of units in an authorised fund, or any investment objective of giving protection to the capital value of, or income return from, such a holding:

1. (1)

   that arrangement or protection must not be such as to cause the possibility of a conflict of interest as between:

   1. (a)

      unitholders and the authorised fund manager or depositary; or

   2. (b)

      unitholders intended and not intended to benefit from the arrangement; and

2. (2)

   where, in accordance with any statement required by COLL 4.2.5R (27)(c)(iv) (Table: contents of the prospectus), action is required by the unitholders to obtain the benefit of any guarantee, the authorised fund manager must provide reasonable notice in writing to unitholders before such action is required.