COLLG 4.1 Introduction

Section 262 of the Act provides for the Treasury to make regulations governing the establishment and regulation of ICVCs. Rather than merely adopting various parts of UK company law, the Treasury chose a 'stand alone' approach for its OEIC Regulations. The main features and practical effects of those regulations are outlined below.

1. (1)

   The FSA requires an application for authorisation of an ICVC to be made jointly by the ACD and depositary, who must be:

   1. (a)

      authorised persons under the Act with the appropriate Part IV permissions; and

   2. (b)

      independent of each other.

   3. (c)

      [deleted]

   4. (d)

      [deleted]

   5. (e)

      [deleted]

   6. (f)

      [deleted]

   7. (g)

      [deleted]

2. (2)

   The application must contain details of the ACD and depositary, and any other person proposed as a director of the ICVC, of the scheme itself, and of other persons to whom functions are to be delegated (e.g. the registrar and the investment adviser).

3. (3)

   Application forms are available free of charge from the forms page at FSA/form_links.jsp#collAnc

4. (4)

   A fee is payable and must be submitted with the application (see FEES 1, FEES 2 and FEES 3).

5. (5)

   The following items must be provided with the application:

   1. (a)

      a copy of the proposed ICVC's instrument of incorporation;

   2. (b)

      a solicitor's certificate stating that the instrument of incorporation complies with Schedule 2 to the OEIC Regulations and with COLL;

   3. (c)

      a copy of the prospectus, with a checklist indicating the location of the information required by COLL to be contained in it;

   4. (d)

      in the case of a UCITS scheme, a copy of the simplified prospectus; and

   5. (e)

      if applicable, documents evidencing any guarantee arrangement.

6. (6)

   The name of the ICVC must not be undesirable or misleading and must not be the same as that of an existing company. Regulation 19 includes a list of words and expressions that are prohibited from inclusion within the name of an ICVC and further guidance can be found in COLL 6.9 (Ongoing obligations). As with an AUT, the aim of the ICVC must be reasonably capable of being achieved.

7. (7)

   As with an AUT, the FSA has up to 6 months to determine a completed application, but aims to process 75% of applications for UCITS schemes within six weeks. If the FSA is satisfied with the application, an authorisation order is issued. The ICVC becomes incorporated when the authorisation order is issued.

1. (1)

   The FSA's approval is required before the following changes can take place:

   1. (a)

      any alteration to the instrument of incorporation;

   2. (b)

      any significant alteration to the prospectus;

   3. (c)

      any reconstruction or amalgamation involving the ICVC;

   4. (d)

      any proposal to wind up the ICVC otherwise than by the court;

   5. (e)

      any proposal to replace a director, appoint an additional director, or decrease the number of directors in post; and

   6. (f)

      any proposal to replace the depositary.

2. (2)

   Any notice proposing to change the instrument of incorporation must be accompanied by a solicitor's certificate confirming that the change will not affect compliance of the instrument with Schedule2 to the OEIC Regulations and COLL as they relate to the contents of the instrument.

3. (3)

   The FSA has 1 month following written notification to consider whether or not to refuse the proposal.

The FSA can revoke or refuse to revoke an authorisation order on similar grounds to those for an AUT. If it proposes to do so, similar procedures for warning notices and decision notices as for AUTs apply (see COLLG 3.1.4 G (2)).

The FSA has a power of intervention if it appears there is a breach of the Act or COLL, or if it is desirable to give a direction to protect the interests of investors in the ICVC. Directions can be given to cease the issue or redemption of units or any class of unit in the ICVC or for the winding up of the ICVC.

1. (1)

   Certain provisions of the Companies Acts will apply to ICVCs, as they are incorporated bodies (especially, but not exclusively, regarding the holding of meetings).

2. (2)

   Regulations 34 to 70 lay down the corporate code for ICVCs. The code contains provisions dealing with the operation of ICVCs and includes a number of general company law provisions, for example personal liability for contracts and deeds and punishment for fraudulent trading. The operation of an ICVC is also governed by COLL.

In accordance with Part IV of the OEIC Regulations, the FSA is required to maintain a register of ICVCs, allocate to each a registered number, and carry out certain other registration functions.