COLL 4.5 Reports and accounts

The rules and guidance in this section apply to an authorised fund manager, a depositary and any other director of an ICVC.

1. (1)

   The authorised fund manager must for each annual accounting period and half-yearly accounting period, prepare a 15long report for a scheme.

2. (2)

   [deleted]15

3. (3)

   Where the first annual accounting period of a scheme is less than 12 months, a half-yearly report need not be prepared.

4. (4)

   [deleted]1

1. (1)

   An annual long report on an authorised fund, other than a scheme which is an umbrella, must contain:

   1. (a)

      the accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;

      3
   2. (b)

      the report of the authorised fund manager in accordance with COLL 4.5.9 R (Authorised fund manager's report);

   3. (c)

      comparative information12 in accordance with COLL 4.5.10 R (Comparative information12);

      1212
   4. (d)

      the report of the depositary in accordance with COLL 4.5.11 R (Report of the depositary); and

   5. (e)

      the report of the auditor in accordance with COLL 4.5.12 R (Report of the auditor).

2. (2)

   An annual long report on a scheme which is an umbrella must be prepared for the umbrella as a whole and2 must contain:

   1. (a)

      for each sub-fund:

      1. (i)

         the accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;

         3
      2. (ii)

         the report of the authorised fund manager in accordance with COLL 4.5.9 R; and

      3. (iii)

         comparative information12 in accordance with COLL 4.5.10 R;

         12
   2. (b)

      [deleted]12

      12
   3. (c)

      the report of the depositary in accordance with COLL 4.5.11 R; and

   4. (d)

      the report of the auditor in accordance with COLL 4.5.12 R.

3. (3)

   The directors of an ICVC or the authorised fund manager9 of an AUT or ACS9 must ensure that the accounts referred to in (1)(a),2 (2)(a) and (4)(a)2 give a true and fair view of the net revenue3 and the net capital3 gains or 3losses on the scheme property of the authorised fund, or, in the case of (2)(a) and (4)(a)2, the sub-fund, for the annual accounting period in question and the financial position of the authorised fund or sub-fund as at the end of that period.

   9233
4. (4)

   The authorised fund manager of a scheme which is an umbrella may, in addition to complying with (2), prepare a further annual long report for any one or more individual sub-funds of the scheme, in which case it must contain:2

   1. (a)

      in relation to the sub-fund:2

      1. (i)

         the accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;2

         3
      2. (ii)

         the report of the authorised fund manager in accordance with COLL 4.5.9 R; and2

      3. (iii)

         comparative information12 in accordance with COLL 4.5.10 R;2

         12
   2. (b)

      the report of the depositary in accordance with COLL 4.5.11 R; and2

   3. (c)

      the report of the auditor in accordance with COLL 4.5.12 R.2

5. (5)

   4An annual long report of a UCITS scheme which is a feeder UCITS must also include:

   1. (a)

      a statement on the aggregate of the payments out of scheme property as set out in the prospectus (in this rule “charges”)20 of the feeder UCITS and the master UCITS; and

   2. (b)

      a description of how the annual long report of its master UCITS can be obtained.

[Note: article 63(2) of the UCITS Directive]4

1. (6)

   An annual long report of a feeder NURS must also include:7

   1. (a)

      a statement on the aggregate charges of the feeder NURS and its qualifying master scheme; and7

   2. (b)

      a description of how the annual long report (or nearest equivalent document for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme can be obtained.7

2. (7)

   13An annual long report of a UCITS scheme must also include:

   1. (a)
      1. (i)

         the total amount of remuneration paid by the authorised fund manager to its staff for the financial year, split into fixed and variable remuneration;

      2. (ii)

         the number of beneficiaries; and

      3. (iii)

         where relevant, any amount paid directly by the UCITS scheme itself, including any performance fee;

   2. (b)

      the aggregate amount of remuneration broken down by categories of UCITS Remuneration Code staff;

   3. (c)

      a description of how the remuneration and the benefits have been calculated;

   4. (d)

      the outcome of the reviews referred to in SYSC 19E.2.7R(1) and SYSC 19E.2.8R, including any irregularities that have occurred; and

   5. (e)

      details of any material changes to the adopted remuneration policy since the previous annual long report was prepared.

   [Note: article 69(3) second paragraph of the UCITS Directive]

3. (8)

   20An annual long report of an authorised fund must also contain a statement setting out a description of the assessment of value required by COLL 6.6.20R including:

   1. (a)

      20a separate discussion and conclusion for the matters covered in each paragraph of COLL 6.6.21R, and for each other matter that formed part of the assessment, covering the considerations taken into account in the assessment, a summary of its findings and the steps undertaken as part of or as a consequence of the assessment;

   2. (b)

      20an explanation for any case in which benefits from economies of scale that were identified in the assessment have not been passed on to unitholders;

   3. (c)

      20an explanation for any case in which unitholders hold units in a class that is subject to higher charges than those applying to other classes of the same scheme with substantially similar rights;

   4. (d)

      20the conclusion of the authorised fund manager’s assessment of whether the charges are justified in the context of the overall value delivered to the unitholders in the scheme; and

   5. (e)

      20if the assessment has identified that the charges are not justified in the context of the overall value delivered to the unitholders, a clear explanation of what action has been or will be taken to address the situation.

4. (9)

   20An AFM need not include the statement required by (8) in its annual long report if it makes the statement available to unitholders annually in a composite report covering two or more of the authorised funds it manages, published in the same manner as the annual long report.

1. (1)

   A half-yearly long report on an authorised fund, other than for a scheme which is an umbrella, must contain:

   1. (a)

      the accounts for the half-yearly accounting period which must be prepared in accordance with the requirements of the IMA SORP; and

      3
   2. (b)

      the report of the authorised fund manager in accordance with COLL 4.5.9 R (Authorised fund manager's report).

2. (2)

   A half-yearly long report on a scheme which is an umbrella must be prepared for the umbrella as a whole and2 must contain:

   1. (a)

      for each sub-fund:

      1. (i)

         the 2 accounts for the half-yearly accounting period2 which must be prepared in accordance with the requirements of the IMA SORP; and

         32
      2. (ii)

         the report of the authorised fund manager in accordance with COLL 4.5.9 R; and

   2. (b)

      [deleted]12

      12
3. (3)

   The authorised fund manager of a scheme which is an umbrella may, in addition to complying with (2), prepare a further half-yearly long report for any one or more individual sub-funds of the scheme. Such reports must contain the

   3

   accounts and the report of the authorised fund manager that would be required by (1) if the sub-fund were a separate authorised fund.2

4. (4)

   4The half-yearly long report of a UCITS scheme which is a feeder UCITS must also include a description of how the half-yearly and annual reports of its master UCITS can be obtained.

[Note: article 63(2) second subparagraph of the UCITS Directive]

1. (5)

   The half-yearly long report of a feeder NURS must also include a description of how the half-yearly and annual long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme can be obtained.7

3The annual reports in COLL 4.5.7R (1) and (2), and the half-yearly reports in COLL 4.5.8R (1) and (2), must:

1. (1)

   in the case of an ICVC, if there is:

   1. (a)

      more than one director, be approved by the board of directors and signed on their behalf by the ACD and at least one other director; or

   2. (b)

      no director other than the ACD, be signed by the ACD;

2. (2)

   in the case of an AUT or ACS9, if the authorised fund manager has:

   1. (a)

      more than one director, be signed by at least two directors of the authorised fund manager; or

   2. (b)

      only one director, be signed by the director of the authorised fund manager.

The matters set out in (1) to (13)2 must be included in any authorised fund manager's report, except where otherwise indicated:

1. (1)

   the names and addresses of :

   1. (a)

      the authorised fund manager;

   2. (b)

      the depositary;

   3. (c)

      the registrar;

   4. (d)

      any investment adviser;

   5. (e)

      the auditor; and

   6. (f)

      for a scheme which invests in immovables, the standing independent valuer;

2. (2)

   (for an ICVC), the names of any directors other than the ACD;

3. (3)

   a statement of the authorised status of the scheme;

4. (4)

   (for an ICVC) a statement that the unitholders of the ICVC are not liable for the debts of the ICVC;

5. (5)

   the investment objectives of the authorised fund;

6. (6)

   the policy and strategy pursued

   3

   for achieving those objectives;

7. (7)

   a review of the investment activities during the period to which the report relates;

8. (7A)

   a portfolio statement prepared in accordance with the requirements of the IMA SORP;

   3
9. (7B)

   in the case of an umbrella which has more than one sub-fund, particulars in the form of a table showing, as at the end of the period to which the report relates:12

   1. (a)

      for each sub-fund, the number of units in that sub-fund that were held by a second sub-fund of that umbrella; and

   2. (b)

      the value of each such holding;

   or, alternatively, a statement that there were no such holdings as at the end of that period;

10. (8)

    particulars of any fundamental changes in accordance with COLL 4.3.4 R (Fundamental change requiring prior approval by meeting) made since the date of the last report;

11. (9)

    particulars of any significant changes which have occurred in accordance with COLL 4.3.6 R (Significant change requiring pre-event notification) since the date of the last report;

12. (9A)

    4in the case of a UCITS scheme or a KII-compliant NURS that does not have a significant exposure to immovables19, the figure for the synthetic risk and reward indicator disclosed in its most recent key investor information document or NURS-KII document19 and any changes to that figure that have taken place during the period;

13. (10)

    any other information which would enable unitholders to make an informed judgement on the development of the activities of the authorised fund during this period and the results of those activities as at the end of that period;

14. (11)

    for a report on an umbrella prepared in accordance with COLL 4.5.7R (2)2 or COLL 4.5.8R (2)2 , information required by (1) to (10) must be given for each sub-fund, if it would vary from that given in respect of the umbrella as a whole;5

    225
15. (12)

    for a UCITS scheme which invests a substantial proportion of its assets in other schemes, a statement as to the maximum proportion of management fees charged to the scheme itself and to other schemes in which that scheme invests; and2

    2
16. (13)

    for a report on an individual sub-fund of a scheme which is an umbrella prepared in accordance with COLL 4.5.7R (4) or COLL 4.5.8R (3), a statement that the latest long report prepared for the umbrella as a whole is available on request.52

    5

The comparative information12 required by COLL 4.5.7 R12 (Contents of the annual long report) and COLL 8.3.5A R (Contents of the annual report) must be shown for the last three annual accounting periods (or all of the authorised fund'sannual accounting periods, if fewer than three) and must set out:

1. (1)

   [deleted]12

   12
2. (1A)

   for a unit of each class in issue, a comparative table as at the end of the period to which the report relates, prepared in accordance with the requirements of the IMA SORP and showing at least:12

   1. (a)

      the performance record of a unit of that class;

   2. (b)

      an indication of the actual charges and costs borne by the class;

   3. (c)

      the net income distributed (or, for accumulation units, allocated) for the unit, taking account of any sub-division or consolidation of units that occurred during that period;

   4. (d)

      the net asset value of the unit as at the end of the period;

   5. (e)
      1. (i)

         (for a report of the directors of an ICVC) the number of units of the class in issue as at the end of the period; or

      2. (ii)

         (for a report of the authorised fund manager of an AUT or an ACS) the number of units of the class that are in existence or treated as in existence as at the end of the period; and

   6. (f)

      the highest and the lowest prices of the unit during the period;

3. (2)

   [deleted]12

   12
4. (2A)

   for the scheme property, its total net asset value as at the end of the period; and 12

5. (3)

   if, in the period covered by the information:12

   12
   1. (a)

      the authorised fund has been the subject of any event (such as a scheme of arrangement) having a material effect on the size of the authorised fund, but excluding any issue or cancellation of units for cash; or

   2. (b)

      there have been changes in the investment objective and policy12 of the authorised fund;

      12
   3. (c)

      [deleted]12

      12

an indication, related in the body of the table to the relevant year in the table, of the date of the event or change in the investment objective and policy, and a brief description of its nature.12

1. (1)

   The depositary must make an annual report to unitholders which must be included in the annual report.

2. (2)

   The annual report must contain:

   1. (a)

      a description, which may be in summary form, of the duties of the depositary under COLL 6.6.4 (General duties of the depositary) and in respect of the safekeeping of the scheme property; and

   2. (b)

      a statement whether, in any material respect:

      1. (i)

         the issue, sale, redemption and cancellation, and calculation of the price of the units and the application of the authorised fund's revenue

         33

         , have not been carried out in accordance with the rules in this sourcebook and, where applicable, the OEIC Regulations and the instrument constituting the fund;10 and

         10
      2. (ii)

         the investment and borrowing powers and restrictions applicable to the authorised fund have been exceeded.

The authorised fund manager must ensure that the report of the auditor to the unitholders includes the following statements:3

1. (1)

   whether, in the auditor's opinion, the accounts have been properly prepared in accordance with the IMA SORP, the rules in this sourcebook, and the instrument constituting the fund;10

   10
2. (2)

   whether, in the auditor's opinion, the accounts give a true and fair view of the net revenue3and the net capital 3gains or losses on3the scheme property of the authorised fund (or, as the case may be, the scheme property attributable to the sub-fund) for the annual accounting period in question and the financial position of the authorised fund or sub-fund as at the end of that period;

   33
3. (3)

   whether the auditor is of the opinion that proper accounting records for the authorised fund (or, as the case may be, sub-fund) have not been kept or whether the accounts are not in agreement with those records;

4. (4)

   whether the auditor has been given all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit; and

5. (5)

   whether the auditor is of the opinion that the information given in the report of the directors or in the report of the authorised fund manager for that period is consistent with the accounts.

1. (1)

   The authorised fund manager must, within four months after the end of each annual accounting period and two months after the end of each half-yearly accounting period respectively, make available and publish the long reports2 prepared in accordance with COLL 4.5.7R (1) to (3)2 (Contents of the annual long report) and COLL 4.5.8R (1) to (2)2 (Contents of the half-yearly long report).

   22
2. (2)

   The reports referred to in (1) must:

   1. (a)

      be supplied free of charge to any person on request2;

      2
   2. (b)

      be available in English, for inspection by the public free of charge during ordinary office hours at a place specified;

   3. (c)

      for a UCITS scheme, be available for inspection by the public at a place designated by the authorised fund manager in each EEA State other than the United Kingdom in which units in the authorised fund were marketed before IP completion day2221, in English and in at least one of that other EEA State's official languages; and

   4. (d)

      be sent to the FCA21.

      4

1. (1)

   4The authorised fund manager of a UCITS scheme which is a feeder UCITS must:

   1. (a)

      where requested by an investor, provide copies of the annual and half-yearly long reports of its master UCITS free of charge; and

   2. (b)

      file copies of the annual and half-yearly long reports of its master UCITS with the FCA .

2. (2)

   Except where an investor requests paper copies or the use of electronic communications is not appropriate, the annual and half-yearly long reports of its master UCITS may be provided in a durable medium other than paper or by means of a website that meets the website conditions.

1. (1)

   7The authorised fund manager of a feeder NURS must, where requested by an investor or the FCA , provide to such person copies of the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme free of charge.

2. (2)

   Except where an investor requests paper copies or the use of electronic communications is not appropriate, the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme may be provided in a durable medium other than paper, or by means of a website that meets the website conditions.8