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COLL 4.1 Introduction

Application

COLL 4.1.1 R RP

This chapter applies to:

  1. (1)

    an authorised fund manager of an AUT or an ICVC;

  2. (2)

    any other director of an ICVC;

  3. (3)

    a depositary of an AUT or an ICVC; and

  4. (4)

    an ICVC,

where such AUT or ICVC is a UCITS scheme or a non-UCITS retail scheme.

Purpose

COLL 4.1.2 G RP

This chapter helps in achieving the regulatory objective of protecting consumers by ensuring consumers have access to up-to-date detailed information about an authorised fund particularly before buying units and thereafter an appropriate level of investor involvement exists by providing a framework for them to:

  1. (1)

    participate in the decisions on key issues concerning the authorised fund; and

  2. (2)

    be sent regular and relevant information about the authorised fund.

COLL 4.2 Pre-sale notifications

Application

COLL 4.2.1 R RP

This section applies to an authorised fund manager, an ICVC and any other director of an ICVC

Publishing the prospectus

COLL 4.2.2 R RP
  1. (1)

    A prospectus must be drawn up in English and published as a document by the authorised fund manager and, for an ICVC, it must be approved by the directors.

  2. (2)

    The authorised fund manager must ensure that the prospectus:

    1. (a)

      contains the information required by COLL 4.2.5 R (Table: contents of the prospectus);

    2. (b)

      does not contain any provision which is unfairly prejudicial to the interests of unitholders generally or to the unitholders of any class of units;

    3. (c)

      does not contain any provision that conflicts with any rule in this sourcebook; and

    4. (d)

      is kept up-to-date and that revisions are made to it, whenever appropriate.

Availability of prospectus and long report

COLL 4.2.3 R RP
  1. (1)

    An ICVC or the manager of an AUT must:

    1. (a)

      supply a copy of the scheme's most recent prospectus drawn up and published in accordance with COLL 4.2.2 R (Publishing the prospectus) free of charge to any person on request; and

    2. (b)

      file a copy of the scheme's original prospectus, together with all revisions thereto, with the FSA .

  2. (2)

    An ICVC or the manager of an AUT which in either case is a UCITS scheme intending to market units in the territory of another EEA State must:

    1. (a)

      ensure that the following documents are drawn up in the, or one of the, official languages of the EEA State or a language approved by the Host State regulator:

      1. (i)

        the prospectus;

      2. (ii)

        the instrument constituting the scheme; and

      3. (iii)

        the latest annual and half-yearly long reports of the scheme;

    2. (b)

      supply copies of the most recent version of the documents in (a) to any purchaser of units free of charge on request, and

    3. (c)

      file copies of the most recent version of the documents in (a) with the competent authority of each such Host State, provided in the language, or one of the, languages of that State or a language approved by the competent authority of that State.

  3. (3)

    An authorised fund manager must, upon the request of a unitholder in a UCITS scheme that it manages, provide information supplementary to the prospectus of that scheme relating to:

    1. (a)

      the quantitative limits applying to the risk management of that scheme;

    2. (b)

      the methods used in relation to (a); and

    3. (c)

      any recent development of the risk and yields of the main categories of investment.

False or misleading prospectus

COLL 4.2.4 R RP
  1. (1)

    The authorised fund manager:

    1. (a)

      must ensure that the prospectus of the authorised fund does not contain any untrue or misleading statement or omit any matter required by the rules in this sourcebook to be included in it; and

    2. (b)

      is liable to pay compensation to any person who has acquired any units in the authorised fund and suffered loss in respect of them as a result of such statement or omission; this is in addition to any liability incurred apart from under this rule.

  2. (2)

    The authorised fund manager is not in breach of (1)(a) and is not liable to pay compensation under (1)(b) if, at the time when the prospectus was made available to the public, it had taken reasonable care to determine that the statement was true and not misleading, or that the omission was appropriate, and that:

    1. (a)

      it continued to take such reasonable care until the time of the relevant acquisition of units in the scheme; or

    2. (b)

      the acquisition took place before it was reasonably practicable to bring a correction to the attention of potential purchasers; or

    3. (c)

      it had already taken all reasonable steps to ensure that a correction was brought to the attention of potential purchasers; or

    4. (d)

      the person who acquired the units was not materially influenced or affected by that statement or omission in making the decision to invest.

  3. (3)

    The authorised fund manager is also not in breach of (1)(a) and is not liable to pay compensation under (1)(b) if:

    1. (a)

      before the acquisition a correction had been published in a manner calculated to bring it to the attention of persons likely to acquire the units in question; or

    2. (b)

      it took all reasonable steps to secure such publication and had reasonable grounds to conclude that publication had taken place before the units were acquired.

  4. (4)

    The authorised fund manager is not liable to pay compensation under (1)(b) if the person who acquired the units knew at the time of the acquisition that the statement was untrue or misleading or knew of the omission.

  5. (5)

    For the purposes of this rule a revised prospectus will be treated as a different prospectus from the original one.

  6. (6)

    References in this rule to the acquisition of units include references to contracting to acquire them.

Table: contents of the prospectus

COLL 4.2.5 R RP

This table belongs to COLL 4.2.2 R (Publishing the prospectus).

Document status

1

A statement that the document is the prospectus of the authorised fund valid as at a particular date (which shall be the date of the document).

Authorised fund

2

A description of the authorised fund including:

(a)

its name;

(b)

whether it is an ICVC or an AUT and that:

(i)

unitholders are not liable for the debts of the authorised fund;

(ii)

for an ICVC, a statement that the sub-funds of a scheme which is an umbrella are not 'ring fenced' and in the event of the umbrella being unable to meet liabilities attributable to any particular sub-fund out of the assets attributable to that sub-fund, that the remaining liabilities may have to be met out of the assets attributable to other sub-funds;

3(ba)

whether it is a UCITS scheme or a non-UCITS retail scheme;

(c)

for an ICVC, the address of its head office and the address of the place in the United Kingdom for service on the ICVC of notices or other documents required or authorised to be served on it;

(d)

the effective date of the authorisation order made by the FSA and relevant details of termination, if the duration of the authorised fund is limited;

(e)

its base currency;

(f)

for an ICVC, the maximum and minimum sizes of its capital; and

(g)

the circumstances in which it may be wound up under the rules and a summary of the procedure for, and the rights of unitholders under, such a winding up

Investment objectives and policy

3

The following particulars of the investment objectives and policy of the authorised fund:

(a)

the investment objectives, including its financial objectives;

(b)

the authorised fund's investment policy for achieving those investment objectives, including the general nature of the portfolio and, if appropriate, any intended specialisation;

(c)

an indication of any limitations on that investment policy;

(d)

the description of assets which the capital property may consist of;

(e)

the proportion of the capital property which may consist of an asset of any description;

(f)

the description of transactions which may be effected on behalf of the authorised fund and an indication of any techniques and instruments or borrowing powers which may be used in the management of the authorised fund;

(g)

a list of the eligible markets through which the authorised fund may invest or deal in accordance with COLL 5.2.10 R (2)(b) (Eligible markets: requirements);

(h)

for an ICVC, a statement as to whether it is intended that the scheme will have an interest in any immovable property or movable property ((in accordance with COLL 5.6.4 R (2) (Investment powers: general) or COLL 5.2.8 R (2) (UCITS schemes: general)) for the direct pursuit of the ICVC's business;

(i)

where COLL 5.2.12 R (3) (Spread: government and public securities) applies, a prominent statement as to the fact that more than 35% of the scheme property is or may be invested in government and public securities and the names of the individual states, local authorities or public international bodies in whose securities the authorised fund may invest more than 35% of the scheme property;

(k)

for an authorised fund which may invest in other schemes, the extent to which the scheme property may be invested in the units of schemes which are managed by the authorised fund manager or by its associate;

(l)

where a scheme invests principally in scheme units, deposits or derivatives, or replicates an index in accordance with COLL 5.2.31 R or COLL 5.6.23 R (Schemes replicating an index), a prominent statement regarding this investment policy;

(m)

where derivatives transactions may be used in a scheme, a prominent statement as to whether these transactions are for the purposes of hedging or meeting the investment objectives or both and the possible outcome of the use of derivatives on the risk profile of the scheme;

(n)

information concerning the profile of the typical investor for whom the scheme is designed;

(o)

information concerning the historical performance of the scheme presented in accordance with COB 3.8.11 R (Specific non-real time financial promotions: past performance);

(p)

for a non-UCITS retail scheme which invests in immovables, a statement of the countries or territories of situation of land or buildings in which the authorised fund may invest;

(q)

for a UCITS scheme which invests a substantial portion of its assets in other schemes, a statement of the maximum level of management fees that may be charged to that UCITS scheme and to the schemes in which it invests;

(r)

where the net asset value of a UCITS scheme is likely to have high volatility owing to its portfolio composition or the portfolio management techniques that may be used, a prominent statement to that effect; and

(s)

for a UCITS scheme, a statement that any unitholder may obtain on request the types of information (which must be listed) referred to in COLL 4.2.3R (3) (Availability of prospectus and long report).

Reporting, distributions and accounting dates

4

Relevant details of the reporting, accounting and distribution information which includes:

(a)

the accounting and distribution dates;

(b)

procedures for:

(i)

determining and applying income (including how any distributable income is paid);

(ii)

unclaimed distributions; and

(iii)

if relevant, calculating, paying and accounting for income equalisation;

(c)

the accounting reference date and when the long report will be published in accordance with COLL 4.5.14 R (Publication and availability of annual and half-yearly long report); and

(d)

when the short report will be sent to unitholders in accordance with COLL 4.5.13 R (Provision of short report).

Characteristics of the units

5

Information as to:

(a)

where there is more than one class of unit in issue or available for issue, the name of each such class and the rights attached to each class in so far as they vary from the rights attached to other classes;

(b)

where the instrument constituting the scheme provides for the issue of bearer certificates, that fact and what procedures will operate for them;

(c)

how unitholders may exercise their voting rights and what these amount to;

(d)

where a mandatory redemption, cancellation or conversion of units from one class to another may be required, in what circumstances it may be required; and

(e)

for an AUT, the fact that the nature of the right represented by units is that of a beneficial interest under a trust.

Authorised fund manager

6

The following particulars of the authorised fund manager:

(a)

its name;

(b)

the nature of its corporate form;

(c)

the date of its incorporation;

(d)

the address of its registered office;

(e)

the address of its head office, if that is different from the address of its registered office;

(f)

if neither its registered office nor its head office is in the United Kingdom, the address of its principal place of business in the United Kingdom;

(g)

if the duration of its corporate status is limited, when that status will or may cease; and

(h)

the amount of its issued share capital and how much of it is paid up.

Directors of an ICVC, other than the ACD

7

Other than for the ACD:

(a)

the names and positions in the ICVC of any other directors (if any); and

(b)

the manner, amount and calculation of the remuneration of such directors.

Depositary

8

The following particulars of the depositary:

(a)

its name;

(b)

the nature of its corporate form;

(c)

the address of its registered office;

(d)

the address of its head office, if that is different from the address of its registered office;

(e)

if neither its registered office nor its head office is in the United Kingdom, the address of its principal place of business in the United Kingdom; and

(f)

a description of its principal business activity.

Investment adviser

9

If an investment adviser is retained in connection with the business of an authorised fund:

(a)

its name; and

(b)

where it carries on a significant activity other than providing services to the authorised fund as an investment adviser, what that significant activity is.

Auditor

10

The name of the auditor of the authorised fund.

Contracts and other relationships with parties

11

The following relevant details:

(a)

for an ICVC:

(i)

a summary of the material provisions of the contract between the ICVC and the ACD3 which may be relevant to unitholders including provisions (if any) relating to remuneration, termination, compensation on termination and indemnity;

3

(ii)

the main business activities of each of the directors (other than those connected with the business of the ICVC) where these are of significance to the ICVC's business;

(iii)

if any director is a body corporate in a group of which any other corporate director of the ICVC is a member, a statement of that fact;

3

(iv)

the main terms of each contract of service between the ICVC and a director in summary form; and3

3(v)

for an ICVC that does not hold annual general meetings, a statement that copies of contracts of service between the ICVC and its directors, including the ACD, will be provided to a unitholder on request;

(b)

the names of the directors of the authorised fund manager and the main business activities of each of the directors (other than those connected with the business of the authorised fund) where these are of significance to the authorised fund's business;

(c)

a summary of the material provisions of the contract between the ICVC or the manager of the AUT and the depositary which may be relevant to unitholders, including provisions relating to the remuneration of the depositary;

(d)

if an investment adviser retained in connection with the business of the authorised fund is a body corporate in a group of which any director of the ICVC or the manager of the AUT is a member, that fact;

(e)

a summary of the material provisions of any contract between the authorised fund manager or the ICVC and any investment adviser which may be relevant to unitholders;

(f)

if an investment adviser retained in connection with the business of the authorised fund has the authority of the authorised fund manager or the ICVC to make decisions on behalf of the authorised fund manager or the ICVC, that fact and a description of the matters in relation to which it has that authority;

(g)

what functions (if any) the authorised fund manager has delegated and to whom; and

(h)

in what capacity (if any), the authorised fund manager acts in relation to any other collective investment schemes and the name of such schemes.

Register of Unitholders

12

Details of:

(a)

the address in the United Kingdom where the register of unitholders, and where relevant the plan register is kept and can be inspected by unitholders; and

(b)

the registrar's name and address.

Payments out of scheme property

13

In relation to each type of payment from the scheme property, details of:

(a)

who the payment is made to;

(b)

what the payment is for;

(c)

the rate or amount where available;

(d)

how it will be calculated and accrued;

(e)

when it will be paid; and

(f)

where a performance fee is taken, examples of its operation in plain English and the maximum it can amount to.

Allocation of payments

14

If, in accordance with COLL 6.2.19 (Allocation of payments to income or capital), the authorised fund manager and the depositary have agreed that all or part of any income expense payments may be treated as a capital expense:

(a)

that fact;

(b)

the policy for allocation of these payments; and

(c)

a statement that this policy may result in capital erosion or constrain capital growth.

Moveable and immovable property (ICVC only)

15

An estimate of any expenses likely to be incurred by the ICVC in respect of movable and immovable property in which the ICVC has an interest.

Valuation and pricing of scheme property

16

In relation to the valuation and pricing of scheme property:

(a)

a provision that there must be only a single price for any unit as determined from time to time by reference to a particular valuation point;

(b)

details of:

(i)

how the value of the scheme property is to be determined in relation to each purpose for which the scheme property must be valued;

(ii)

how frequently and at what time or times of the day the scheme property will be regularly valued for dealing purposes and a description of any circumstance in which the scheme property may be specially valued;

(iii)

where relevant, how the price of units of each class will be determined for dealing purposes; and

(iv)

where and at what frequency the most recent prices will be published; and

(c)

if provisions in (a) and (b) do not take effect when the instrument constituting the scheme or (where appropriate) supplemental trust deed takes effect, a statement of the time from which those provisions are to take effect or how it will be determined.

Dealing

17

The following particulars:

(a)

the procedures, the dealing periods and the circumstances in which the authorised fund manager will effect:

(i)

the sale and redemption of units and the settlement of transactions (including the minimum number or value of units which one person may hold or which may be subject to any transaction of sale or redemption) for each class of unit in the authorised fund; and

(ii)

any direct issue or cancellation of units by an ICVC or by the trustee (as appropriate) through the authorised fund manager in accordance with COLL 6.2.7R (2) (Issue and cancellation of units through an authorised fund manager);

(b)

the circumstances in which the redemption of units may be suspended;

(c)

whether certificates will be issued in respect of registered units;

(d)

the circumstances in which the authorised fund manager may arrange for, and the procedure for the issue or cancellation of units in specie;

(e)

the investment exchanges (if any) on which units in the scheme are listed or dealt;

(f)

the circumstances and conditions for issuing units in an authorised fund which limit the issue of any class of units in accordance with COLL 6.2.21 (Limited issue);

(g)

the circumstances and procedures for the limitation or deferral of redemptions in accordance with COLL 6.2.16 (Limited redemption) or COLL 6.3.8 (Deferred redemption); and

(h)

in a prospectus available during the period of any initial offer:

(i)

the length of the initial offer period;

(ii)

the initial price of a unit, which must be in the base currency;

(iii)

the arrangements for issuing units during the initial offer, including the authorised fund manager's intentions on investing the subscriptions received during the initial offer;

(iv)

the circumstances when the initial offer will end;

(v)

whether units will be sold or issued in any other currency; and

(vi)

any other relevant details of the initial offer .

Dilution

18

Details of what is meant by dilution including:

(a)

a statement explaining:

(i)

that it is not possible to predict accurately whether dilution is likely to occur; and

(ii)

which of the policies the authorised fund manager is adopting under COLL 6.3.8 (1) (Dilution) together with an explanation of how this policy may affect the future growth of the authorised fund; and

(b)

if the authorised fund manager may require a dilution levy or make a dilution adjustment, a statement of:

(i)

the authorised fund manager's policy in deciding when to require a dilution levy, including the authorised fund manager's policy on large deals, or when to make a dilution adjustment;

(ii)

the estimated rate or amount of any dilution levy or dilution adjustment based either on historical data or future projections; and

(iii)

the likelihood that the authorised fund manager may require a dilution levy or make a dilution adjustment and the basis (historical or projected) on which the statement is made.

SDRT provision

19

An explanation of:

(a)

what is meant by stamp duty reserve tax, SDRT provision and large deals; and

(b)

the authorised fund manager's policy on imposing an SDRT provision including its policy on large deals, and the occasions, and the likely frequency of the occasions, in which an SDRT provision may be imposed and the maximum rate of it (a usual rate may also be stated).

Forward and historic pricing

20

The authorised fund manager's normal basis of pricing under COLL 6.3.9 (Forward and historic pricing).

Preliminary charge

21

Where relevant, a statement authorising the authorised fund manager to make a preliminary charge and specifying the basis for and current amount or rate of that charge.

Redemption charge

22

Where relevant, a statement authorising the authorised fund manager to deduct a redemption charge out of the proceeds of redemption; and if the authorised fund manager makes a redemption charge:

(a)

the current amount of that charge or if it is variable, the rate or method of calculating it;

(b)

if the amount, rate or method has been changed, that details of any previous amount, rate or method may be obtained from the authorised fund manager on request; and

(c)

how the order in which units acquired at different times by a unitholder is to be determined so far as necessary for the purposes of the imposition of the redemption charge.

General information

23

Details of:

(a)

the address at which copies of the instrument constituting the scheme, any amending instrument and the most recent annual and half-yearly long reports may be inspected and from which copies may be obtained;

(b)

the manner in which any notice or document will be served on unitholders;

(c)

the extent to which and the circumstances in which:

(i)

the scheme is liable to pay or suffer tax on any appreciation in the value of the scheme property or on the income derived from the scheme property; and

(ii)

deductions by way of withholding tax may be made from distributions of income to unitholders and payments made to unitholders on the redemption of units;

3

(d)

for a UCITS scheme, any possible fees or expenses not described in paragraphs 13 to 22, distinguishing between those to be paid by a unitholder and those to be paid out of scheme property; and3

3

3(e)

for an ICVC, whether or not annual general meetings will be held.

Information on the umbrella

24

In the case of a scheme which is an umbrella, the following information:

(a)

that a unitholder is entitled to exchange units in one sub-fund for units in any other sub-fund (other than a sub-fund which has limited the issue of units);

(b)

that an exchange of units in one sub-fund for units in any other sub-fund is treated as a redemption and sale and will, for persons subject to United Kingdom taxation, be a realisation for the purposes of capital gains taxation;

(c)

that in no circumstances will a unitholder who exchanges units in one sub-fund for units in any other sub-fund be given a right by law to withdraw from or cancel the transaction;

(d)

the policy for allocating between sub-funds any assets of, or costs, charges and expenses payable out of, the scheme property which are not attributable to any particular sub-fund;

(e)

what charges, if any, may be made on exchanging units in one sub-fund for units in any other sub-fund;

(f)

for each sub-fund, the currency in which the scheme property allocated to it will be valued and the price of units calculated and payments made, if this currency is not the base currency of the scheme which is an umbrella; and

(g)

if there are units for less than two sub-funds in issue, the effect of COLL 3.2.7 R (Umbrella scheme with only one sub-fund).

Application of the prospectus contents to an umbrella

25

For a scheme which is an umbrella, information required must be stated:

(a)

in relation to each sub-fund where the information for any sub-fund differs from that for any other; and

(b)

for the umbrella as a whole, but only where the information is relevant to the umbrella as a whole.

Marketing in another EEA state

26

A prospectus of a UCITS scheme which is prepared for the purpose of marketing units in a EEA State other than the United Kingdom, must give details as to:

(a)

what special arrangements have been made:

(i)

for paying in that EEA State amounts distributable to unitholders resident in that EEA State;

(ii)

for redeeming in that EEA State the units of unitholders resident in that EEA State;

(iii)

for inspecting and obtaining copies in that EEA State of the instrument constituting the scheme and amendments to it, the prospectus and the annual and half-yearly long report; and

(iv)

for making public the price of units of each class; and

(b)

how the ICVC or the manager of an AUT will publish in that EEA State notice:

(i)

that the annual and half-yearly long report are available for inspection;

(ii)

that a distribution has been declared;

(iii)

of the calling of a meeting of unitholders; and

(iv)

of the termination of the authorised fund or the revocation of its authorisation.

Additional information

27

Any other material information which is within the knowledge of the directors of an ICVC or the manager of an AUT, or which the directors or manager would have obtained by making reasonable enquiries, including but not confined to, the following matters:

(a)

information which investors and their professional advisers would reasonably require, and reasonably expect to find in the prospectus, for the purpose of making an informed judgement about the merits of investing in the authorised fund and the extent and characteristics of the risks accepted by so participating;

(b)

a clear and easily understandable explanation of any risks which investment in the authorised fund may reasonably be regarded as presenting for reasonably prudent investors of moderate means;

(c)

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

(i)

details of that arrangement or protection;

(ii)

for any related guarantee, sufficient details about the guarantor and the guarantee to enable a fair assessment of the value of the guarantee;

(iii)

a description of the risks that could affect achievement of that return or protection; and

(iv)

details of the arrangements by which the authorised fund manager will notify unitholders of any action required by the unitholders to obtain the benefit of the guarantee; and

(d)

whether any notice has been given to unitholders of the authorised fund manager intention to propose a change to the scheme and if so, its particulars.

Guidance on contents of the prospectus

COLL 4.2.6 G RP
  1. (1)

    In relation to COLL 4.2.5R (3)(b) the prospectus might include:

    1. (a)

      a description of the extent (if any) to which that policy does not envisage the authorised fund remaining fully invested at all times;

    2. (b)

      for a non-UCITS retail scheme which may invest in immovable property:

      1. (i)

        the maximum extent to which the scheme property may be invested in immovables; and

      2. (ii)

        a statement of the policy of the authorised fund manager in relation to insurance of3 immovables forming part of the scheme property; and

        3
    3. (c)

      a description of any restrictions in the assets in which investment may be made, including restrictions in the extent to which the authorised fund may invest in any category of asset, indicating (if appropriate) where the restrictions are more onerous than those imposed by COLL 5 (Investment and borrowing powers).

  2. (2)

    In relation to COLL 4.2.5R (13), the type of payments are likely to include management fees (such as periodic and performance fees), depositary fees, custodian fees, transaction fees, registrar fees, audit fees and FSA fees. Expenses which represent properly incurred costs of the scheme may also be treated as a type of payment for this purpose.

  3. (3)

    In relation to COLL 4.2.5R (27), the prospectus might include a statement of the authorised fund manager's policy in relation to holding units in the scheme as principal, and in particular whether it seeks to make a profit from doing so. It might also include3 a prominent statement of non-accountability referred to in COLL 6.7.16 G (Exemptions from liability to account for profits).

COLL 4.3 Approvals and notifications

Application

COLL 4.3.1 R RP

This section applies to an authorised fund manager.

Explanation

COLL 4.3.2 G RP
  1. (1)

    The diagram in COLL 4.3.3 G explains how an authorised fund manager should treat changes it is proposing to a scheme and provides an overview of the rules and guidance in this section.

  2. (2)

    Regulation 21 of the OEIC Regulations (The Authority's approval for certain changes in respect of a company) and section 251 of the Act (Alteration of schemes and changes of manager or trustee) require the prior approval of the FSA for certain proposed changes to an authorised fund, including a change of the authorised fund manager or depositary or a change to the instrument constituting the scheme . This should be kept in mind when considering any proposed change.

Diagram: Change event

COLL 4.3.3 G RP

This diagram belongs to COLL 4.3.2 G.

COLL_4.3.3

Fundamental change requiring prior approval by meeting

COLL 4.3.4 R RP
  1. (1)

    The authorised fund manager, must, by way of an extraordinary resolution, obtain prior approval from the unitholders for any proposed change to the scheme which, in accordance with (2), is a fundamental change.

  2. (2)

    A fundamental change is a change or event which:

    1. (a)

      changes the purposes or nature of the scheme; or

    2. (b)

      may materially prejudice a unitholder; or

    3. (c)

      alters the risk profile of the scheme; or

    4. (d)

      introduces any new type of payment out of scheme property.

Guidance on fundamental changes

COLL 4.3.5 G RP

  1. (1)

    Any change may be fundamental depending on its degree of materiality and effect on the scheme and its unitholders. Consequently an authorised fund manager will need to determine whether in each case a particular change is fundamental in nature or not.

  2. (2)

    For the purpose of COLL 4.3.4R (2)(a) to COLL 4.3.4R (2)(c) a fundamental change to a scheme is likely to include:

    1. (a)

      any proposal for a scheme of arrangement referred to in COLL 7.6.2 R (Schemes of arrangement: requirements);

    2. (b)

      a change in the investment policy to achieve capital growth from investment in one country rather than another;

    3. (c)

      a change in the investment objective or policy to achieve capital growth through investment in fixed interest rather than equity investments;

    4. (d)

      a change in the investment policy to allow the authorised fund to invest in derivatives as an investment strategy which increases its volatility;

    5. (e)

      a change to the characteristics of a scheme to distribute income annually rather than monthly; or

    6. (f)

      the introduction of limited redemption arrangements.

Significant change requiring pre-event notification

COLL 4.3.6 R RP
  1. (1)

    The authorised fund manager must give prior written notice to unitholders, in respect of any proposed change to the operation of a scheme that, in accordance with (2), constitutes a significant change.

  2. (2)

    A significant change is a change or event which is not fundamental in accordance with COLL 4.3.4 R but which:

    1. (a)

      affects a unitholder's ability to exercise his rights in relation to his investment; or

    2. (b)

      would reasonably be expected to cause the unitholder to reconsider his participation in the scheme; or

    3. (c)

      results in any increased payments out of the scheme property to an authorised fund manager or any other director of an ICVC or an associate of either; or

    4. (d)

      materially increases other types of payment out of scheme property.

  3. (3)

    The notice period in (1) must be of a reasonable length (and must not be less than 60 days).

Guidance on significant changes

COLL 4.3.7 G RP
  1. (1)

    Changes may be significant depending in each case on their degree of materiality and effect on the scheme and its unitholders. Consequently the authorised fund manager will need to determine whether in each case a particular change is significant in nature or not.

  2. (2)

    For the purpose of COLL 4.3.6 R a significant change is likely to include:

    1. (a)

      a change in the method of price publication;

    2. (b)

      a change in any operational policy such as dilution policy or allocation of payments policy; or

    3. (c)

      an increase in the preliminary charge where units are purchased through a group savings plan.

  3. (3)

    Where the directors of an ICVC elect to discontinue holding annual general meetings under paragraph 37A of the OEIC Regulations, they are required to give 60 days' written notice to shareholders. For the purpose of COLL 4.3.6 R this should be treated as a significant change to the operation of the scheme.2

Notifiable changes

COLL 4.3.8 R RP
  1. (1)

    The authorised fund manager must inform unitholders in an appropriate manner and timescale of any notifiable changes that are reasonably likely to affect, or have affected, the operation of the scheme.

  2. (2)

    A notifiable change is a change or event, other than a fundamental change under COLL 4.3.4 R or a significant change under COLL 4.3.6 R, which a unitholder must be made aware of unless the authorised fund manager concludes that the change is insignificant.

Guidance on notifiable changes

COLL 4.3.9 G RP
  1. (1)

    The circumstances causing a notifiable change may or may not be within the control of the authorised fund manager.

  2. (2)

    For the purpose of COLL 4.3.8 R (Notifiable changes) a notifiable change might include:

    1. (a)

      a change of named investment manager where the authorised fund has been marketed on the basis of that individual's involvement;

    2. (b)

      a significant political event which impacts on the authorised fund or its operation;

    3. (c)

      a change to the time of the valuation point;

    4. (d)

      the introduction of limited issue arrangements; or

    5. (e)

      a change of the depositary or a change in the name of the authorised fund.

  3. (3)

    The appropriate manner and timescale of notification would depend on the nature of the change or event. Consequently the authorised fund manager will need to assess each change or event individually.

  4. (4)

    An appropriate manner of notification could include:

    1. (a)

      sending an immediate notification to the unitholder;

    2. (b)

      publishing the information on a website; or

    3. (c)

      the information being included in the next long report of the scheme.

COLL 4.4 Meetings of Unitholders and service of notices

Application

COLL 4.4.1 R RP

This section applies to an authorised fund manager, a depositary and any other director of an ICVC.

General meetings

COLL 4.4.2 R RP
  1. (1)

    The authorised fund manager, the depositary or the other directors of an ICVC may convene a general meeting of unitholders at any time.

  2. (2)

    The unitholders may request the convening of a general meeting by a requisition which must:

    1. (a)

      state the objects of the meeting;

    2. (b)

      be dated;

    3. (c)

      be signed by unitholders who, at that date, are registered as the unitholders of units representing not less than one-tenth in value (or such lower proportion stated in the instrument constituting the scheme ) of all of the units then in issue; and

    4. (d)

      be deposited at the head office of the ICVC or with the trustee.

  3. (3)

    The authorised fund manager, the depositary or the other directors of an ICVC must on receipt of a requisition that complies with (2), immediately convene a general meeting of the authorised fund for a date no later than eight weeks after receipt of the requisition.

Class meetings

COLL 4.4.3 R RP

This section applies, unless the context otherwise requires, to class meetings by reference to the units of the class concerned and the unitholders and prices of such units.

Special meaning of Unitholder in COLL 4.4

COLL 4.4.4 R RP
  1. (1)

    Unless a unit in the authorised fund is a participating security, in this section "unitholders" means unitholders as at a cut-off date selected by the authorised fund manager which is a reasonable time before notices of the relevant meeting are sent out.

  2. (2)

    If any unit in the authorised fund is a participating security, a registered unitholder of such a unit is entitled to receive a notice of a meeting or a notice of an adjourned meeting under COLL 4.4.5 R (Notice of general meetings), if entered on the register at the close of business on a day to be determined by the authorised fund manager, which must not be more than 21 days before the notices of the meeting are sent out.

  3. (3)

    For the purposes of (2), in COLL 4.4.6 R (Quorum) to COLL 4.4.11 R (Chairman, adjournments and minutes) "unitholders" in relation to those units means:

    1. (a)

      the persons entered on the register at a time to be determined by the authorised fund manager and stated in the notice of the meeting, which must not be more than 48 hours before the time fixed for the meeting; or

    2. (b)

      in the case of bearer units, unitholders of bearer units which were in issue at the time applicable under (a).

Notice of general meetings

COLL 4.4.5 R RP
  1. (1)

    Where the authorised fund manager, the depositary or the other directors of an ICVC decide to convene a general meeting of unitholders:

    1. (a)

      each unitholder must be given at least 14 days written notice, inclusive of the date on which the notice is first served and the day of the meeting; and

    2. (b)

      the notice must specify the place, day and hour of the meeting and the terms of the resolutions to be proposed and a copy of the notice must be sent to the depositary.

  2. (2)

    The accidental omission to give notice to, or the non-receipt of notice by, any unitholder does not invalidate the proceedings at any meeting.

  3. (3)

    Notice of an adjourned meeting of unitholders must be given to each unitholder, stating that while two unitholders present in person or proxy are required to constitute a quorum at the adjourned meeting, this may be reduced to one in accordance with COLL 4.4.6R (3), should two such unitholders not be present after a reasonable time of convening of the meeting.

  4. (4)

    Paragraph (1)(a) does not apply to the notice of an adjourned meeting.

Quorum

COLL 4.4.6 R RP
  1. (1)

    The quorum required to conduct business at a meeting of unitholders is two unitholders, present in person or by proxy.

  2. (2)

    If after a reasonable time from the time for the start of the meeting, a quorum is not present, the meeting:

    1. (a)

      if convened on the requisition of unitholders, must be dissolved; and

    2. (b)

      in any other case, must stand adjourned to:

      1. (i)

        a day and time which is seven or more days after the day and time of the meeting; and

      2. (ii)

        in the case of a physical meeting or a hybrid meeting, a place to be appointed by the chairman.

  3. (3)

    If, at an adjourned meeting under (2)(b), a quorum is not present after a reasonable time from the time for the meeting, one person entitled to be counted in a quorum present at the meeting shall constitute a quorum.

Resolutions

COLL 4.4.7 R RP
  1. (1)

    Except where an extraordinary resolution is specifically required or permitted, any resolution of unitholders is passed by a simple majority of the votes validly cast at a general meeting of unitholders.

  2. (2)

    In the case of an equality of, or an absence of, votes cast, the chairman is entitled to a casting vote.

  3. (3)

    Where a resolution (including an extraordinary resolution) is required to conduct business at a meeting of unitholders and every unitholder is prohibited under COLL 4.4.8R (4) from voting, it shall not be necessary to convene such a meeting and a resolution may, with the prior written agreement of the depositary to the process, instead be passed with the written consent of unitholders representing 50% or more, or for an extraordinary resolution 75% or more, of the units of the scheme in issue.1

Voting rights

COLL 4.4.8 R RP
  1. (1)

    On a show of hands every unitholder who is present in person has one vote.

  2. (2)

    On a poll:

    1. (a)

      votes may be given either personally or by proxy or in another manner permitted by the instrument constituting the scheme;

    2. (b)

      the voting rights for each unit must be the proportion of the voting rights attached to all of the units in issue that the price of the unit bears to the aggregate price or prices of all of the units in issue:

      1. (i)

        if any unit is a participating security, at the time determined under COLL 4.4.4R (2) (Special meaning of Unitholder in COLL 4.4);

      2. (ii)

        otherwise at the date specified in COLL 4.4.4R (1); and

    3. (c)

      a unitholder need not use all his votes or cast all his votes in the same way.

  3. (3)

    For joint unitholders, the vote of the most senior who votes, whether in person or by proxy, must be accepted to the exclusion of the votes of the other joint unitholders. For this purpose seniority must be determined by the order in which the names stand in the register of unitholders.1

    1
  4. (4)

    No director of the ICVC or the manager can be counted in the quorum of, and no such director or the manager nor any of their associates may vote at, any meeting of the authorised fund.

  5. (5)

    The prohibition in (4) does not apply to any units held on behalf of, or jointly with, a person who, if himself the registered unitholder, would be entitled to vote and from whom the director, the manager or its associate have received voting instructions.

  6. (6)

    For the purpose of this section, units held, or treated as held, by the authorised fund manager or any other director of the ICVC, must not, except as mentioned in (5), be regarded as being in issue.

Right to demand a poll

COLL 4.4.9 R RP
  1. (1)

    A resolution put to the vote of a general meeting must be determined on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

    1. (a)

      the chairman;

    2. (b)

      at least two unitholders; or

    3. (c)

      the depositary.

  2. (2)

    Unless a poll is demanded in accordance with (1), a declaration by the chairman as to the result of a resolution is conclusive evidence of the fact.

Proxies

COLL 4.4.10 R RP
  1. (1)

    A unitholder may appoint another person to attend a general meeting and vote in his place.

  2. (2)

    Unless the instrument constituting the scheme provides otherwise, a unitholder may appoint more than one proxy to attend on the same occasion but a proxy may vote only on a poll.

  3. (3)

    Every notice calling a meeting of a scheme must contain a reasonably prominent statement that a unitholder entitled to attend and vote may appoint a proxy.

  4. (4)

    For the appointment to be effective, any document relating to the appointment of a proxy must not be required to be received by the ICVC or any other person more than 48 hours before the meeting or adjourned meeting

Chairman, adjournment and minutes

COLL 4.4.11 R RP
  1. (1)

    A meeting of unitholders must have a chairman, nominated:1

    1
    1. (a)

      in the case of an AUT, by the trustee; 1

    2. (b)

      in the case of an ICVC, by a director other than the ACD or an associate of the ACD or, if no such nomination is made, by the depositary.1

  2. (2)

    If the chairman is not present after a reasonable time from the time for the meeting, the unitholders present must choose one of them to be chairman.

  3. (3)

    The chairman:

    1. (a)

      may, with the consent of any meeting of unitholders at which a quorum is present; and

    2. (b)

      must, if so directed by the meeting;

      adjourn the meeting from time to time and from place to place

  4. (4)

    Business must not be transacted at any adjourned meeting, except business which might have lawfully been transacted at the original meeting.

  5. (5)

    The authorised fund manager must ensure that:

    1. (a)

      minutes of all resolutions and proceedings at every meeting of unitholders are made and kept; and

    2. (b)

      any minute made in (a) is signed by the chairman of the meeting of unitholders.

  6. (6)

    Any minute referred to in (5)(b) is conclusive evidence of the matters stated in it.

Notices to unitholders

COLL 4.4.12 R RP
  1. (1)

    Where this sourcebook requires any notice or document to be served upon a unitholder, it is duly served :

    1. (a)

      for units held by a registered unitholder, if it is:

      1. (i)

        sent by post to or left at1 the unitholder's address as appearing in the register; or

        1
      2. (ii)

        sent1 by using an electronic medium in accordance with COLL 4.4.13 R (Other notices); or

        1
    2. (b)

      for units represented by bearer certificates, if given in the manner provided for in the prospectus.

  2. (2)

    Any notice or document served by post is deemed to have been served on the second business day following the day on which it is posted.

  3. (3)

    Any document left at a registered address or delivered other than by post is deemed to have been served on that day.

Other notices

COLL 4.4.13 R RP
  1. (1)

    Any document or notice to be served on or information to be given to, any person, including the FSA , must be in legible form.

  2. (2)

    For the purposes of this rule, any form is legible form which:

    1. (a)

      is consistent with the ICVC's, the directors', the authorised fund manager's or the depositary's knowledge of how the recipient of the document wishes or expects to receive the document;

    2. (b)

      is capable of being provided in hard copy by the authorised fund manager, the depositary or any other director of the ICVC;

    3. (c)

      enables the recipient to know or record the time of receipt; and

    4. (d)

      is reasonable in the context.

  3. (3)

    In this sourcebook, any requirement that a document be signed may be satisfied by an electronic signature or electronic evidence of assent.

References to writing and electronic documents

COLL 4.4.14 G RP

In this sourcebook references to writing and the use of electronic media should be construed in accordance with GEN 2.2.14 R (References to writing) and its related guidance provisions.

Service of notice Regulations

COLL 4.4.15 G RP

The provisions in this section relating to the service and delivery of notices and documents both to unitholders and to the FSA , disapply the provisions of The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) under the power in Regulation 1(6) of those Regulations.

COLL 4.5 Reports and accounts

Application

COLL 4.5.1 R RP

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

Explanation

COLL 4.5.2 G RP

In order to provide the unitholders with regular and relevant information about the progress of the authorised fund, the authorised fund manager must:

  1. (1)

    prepare a short report and a long report half-yearly and annually;

  2. (2)

    send the short report to all unitholders; and

  3. (3)

    make the long report available to unitholders on request.

Preparation of long and short reports

COLL 4.5.3 R RP
  1. (1)

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

  2. (2)

    For a scheme which is an umbrella, the authorised fund manager must prepare a short report for each sub-fund but this is not necessary for the umbrella as a whole.

  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

ICVC requirements

COLL 4.5.4 G RP
  1. (1)

    The OEIC Regulations contain requirements for the preparation of annual and half-yearly reports and make the directors of an ICVC responsible for the preparation of annual and half-yearly reports on the ICVC.

  2. (2)

    Regulations 66 (Reports: preparation), 67 (Reports: accounts) and 68 (Reports: voluntary revision) of the OEIC Regulations also contain a number of other requirements relating to reports and accounts of an ICVC.

Contents of a short report

COLL 4.5.5 R
  1. (1)

    The short report for an authorised fund, or for a scheme which is an umbrella, its sub-fund, must contain for the relevant period:

    1. (a)

      the name of the scheme or sub-fund, its stated investment objectives and policy for achieving those objectives, a brief assessment of its risk profile and the name and address of the authorised fund manager;

    2. (b)

      a review of the scheme or sub-fund's investment activities and investment performance during the period;

    3. (c)

      a performance record consistent with COLL 4.5.10R (1) (Comparative table) so as to enable a unitholder to put into context the results of the investment activities of the scheme during the period;

    4. (d)

      sufficient information to enable unitholders to form a view on where the portfolio is invested at the end of the period and the extent to which that has changed over the period;

    5. (e)

      any other significant information which would reasonably enable unitholders to make an informed judgement on the activities of the scheme or sub-fund during the period and the results of those activities at the end of the period; and

    6. (f)

      a statement that the latest long report is available on request.

  2. (2)

    The authorised fund manager must take reasonable steps to ensure that the short report is structured and written in such a way that it can be easily understood by the average investor.

  3. (3)

    The short report must form a separate stand-alone document which must not include any extraneous material.

  4. (4)

    The inclusion in a single document of the short reports of more than one of an authorised fund manager's schemes with the same accounting periods, or of more than one sub-fund in an umbrella, is not a contravention of (3) if each such report is discrete and easily identifiable.

  5. (5)

    The authorised fund manager must ensure that the information given in the short report is consistent with the long report for the relevant accounting period prepared under COLL 4.5.7 R (Contents of the annual long report) or COLL 4.5.8 R(Contents of the half-yearly long report).

Significant information to be contained in the short report

COLL 4.5.6 G

For the purpose of COLL 4.5.5R (1)(d) and COLL 4.5.5R (1)(e) the authorised fund manager should consider including the following as sufficient and significant information:

  1. (1)

    particulars of any fundamental change to the scheme which required unitholder approval by meeting during the period;

  2. (2)

    particulars of any significant change to the operation of the scheme requiring pre-notification, but this need only be given if the change impacts on the unitholders' ability to make an informed judgement on the activities of the scheme;

  3. (3)

    particulars of any other developments in relation to the investment policy of the scheme or the instruments used by it during the period;

  4. (4)

    the total expense ratio at the end of the period;

  5. (5)

    particulars of any qualification of the reports of the auditor and depositary; and

  6. (6)

    particulars of any income or distribution relating to the period.

Contents of the annual long report

COLL 4.5.7 R RP

  1. (1)

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

    1. (a)

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

    2. (b)

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

    3. (c)

      the comparative table in accordance with COLL 4.5.10 R (Comparative table);

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

      2. (ii)

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

      3. (iii)

        the comparative table in accordance with COLL 4.5.10 R;

    2. (b)

      the aggregation of the accounts required by (a)(i) for each sub-fund;

    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 manager of an AUT 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 income and the net gains and thelosses 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.

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

      2. (ii)

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

      3. (iii)

        the comparative table in accordance with COLL 4.5.10 R;2

    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

Contents of the half-yearly long report

COLL 4.5.8 R RP

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

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

        2
      2. (ii)

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

    2. (b)

      the aggregation of the accounts in (a)(i) for each sub-fund.

  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 full

    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

2Annual and half-yearly long reports for sub-funds of an umbrella

COLL 4.5.8A G RP

2The authorised fund manager may, but need not, prepare annual and half-yearly long reports for any individual sub-fund of an umbrella in accordance with COLL 4.5.7R (4) and COLL 4.5.8R (3) and make them available on request to any unitholder investing in the relevant sub-fund. However, if the authorised fund manager does so, this does not relieve it of its duty:

  1. (1)

    to prepare annual and half-yearly long reports on the umbrella as a whole (COLL 4.5.7R (2) and COLL 4.5.8R (2)); and

  2. (2)

    to make available and publish the annual and half-yearly long reports for the umbrella as a whole (COLL 4.5.14 R).

Authorised fund manager's report

COLL 4.5.9 R RP

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

2
  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

    for achieving those objectives;

  7. (7)

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

  8. (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;

  9. (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;

  10. (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;

  11. (11)

    for a report on an umbrella prepared in accordance with COLL 4.5.7R (2)2 or COLL 4.5.8R (2)2 :

    22
    1. (a)

      (for an ICVC), 2a statement to the effect that, as a sub-fund is not a legal entity, if the assets attributable to any sub-fund were insufficient to meet the liabilities attributable to it, the shortfall might have to be met out of the assets attributable to one or more other sub-funds of the ICVC; and

    2. (b)

      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;

      2
  12. (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
  13. (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): 2

    1. (a)

      (for an ICVC) a statement corresponding to that required by (11)(a) making it clear that if the liability relates to another sub-fund of the umbrella, the shortfall or any part of it might have to be met out of the assets of the sub-fund to which the report relates; and2

    2. (b)

      a statement that the latest long report prepared for the umbrella as a whole is available on request.2

Comparative table

COLL 4.5.10 R RP

The comparative table required by COLL 4.5.7R (1)(c) (Contents of the annual long report) must set out:

  1. (1)

    a performance record over the last five calendar years, or if the authorised fund has not been in existence during the whole of that period, over the whole period in which it has been in existence, showing:

    1. (a)

      the highest and the lowest price of a unit of each class in issue during each of those years; and

    2. (b)

      the net income distributed (or, for accumulation units, allocated) for a unit of each class in issue during each of those years, taking account of any sub-division or consolidation of units that occurred during that period;

  2. (2)

    as at the end of each of the last three annual accounting periods (or all of the authorised fund's annual accounting periods, if less than three):

    1. (a)

      the total net asset value of the scheme property at the end of each of those years;

    2. (b)

      the net asset value per unit of each class; and

    3. (c)
      1. (i)

        (for a report of the directors of an ICVC) the number of units of each class in issue; or

      2. (ii)

        (for a report of the manager of an AUT) the number of units of each class in existence or treated as in existence; and

  3. (3)

    if, in the period covered by the table:

    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 objectives of the authorised fund;

    3. (c)

      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 objectives and a brief description of its nature.

Report of the depositary

COLL 4.5.11 R RP

  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 income

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

      2. (ii)

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

Report of the auditor

COLL 4.5.12 R RP

The authorised fund manager must ensure that the report of the auditor to the unitholders must include a statement:

  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 scheme;

  2. (2)

    whether, in the auditor's opinion, the accounts give a true and fair view of the net incomeand the net gains or losses ofthe 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;

  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.

Provision of short report

COLL 4.5.13 R

  1. (1)

    The authorised fund manager must, within four months after the end of each annual accounting period and within two months after the end of each half-yearly accounting period, respectively provide free of charge the short report in accordance with (2).

  2. (2)

    The authorised fund manager must send a copy of the report:

    1. (a)

      to each unitholder (or to the first named of joint unitholders) entered in or entitled to be entered in the register at the close of business on the last day of the relevant accounting period;

      2
    2. (b)

      to each unitholder of bearer units at his request; and2

      2
    3. (c)

      to any other person free of charge on request.2

  3. (3)

    unitholders in a scheme which is an umbrella must be provided with a report relating to the particular sub-fund in which they hold units subject to providing the long report on the umbrella on request in accordance with COLL 4.5.14R (2)(a).

Publication and availability of annual and half-yearly long report

COLL 4.5.14 R RP

  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 are marketed, in English and in at least one of that other EEA State's official languages; and

    4. (d)

      be sent to the FSA .