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 to be made by the ACD and Depositary, who must:

   1. (a)

      be persons authorised under the Act with the appropriate permission under Part IV of the Act (Permission to carry on regulated activities);

   2. (b)

      submit a joint application giving details of themselves, any other person proposed as a director of the ICVC;

   3. (c)

      be independent of each other;

   4. (d)

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

   5. (e)

      a business plan;

   6. (f)

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

   7. (g)

      submit a copy of the prospectus and simplified prospectus.

2. (2)

   The name of the ICVC must not be undesirable or misleading and must not be the same as 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 AUTs the aim of the ICVC must be reasonably capable of being achieved.

3. (3)

   As with AUTs, the FSA has up to 6 months to determine a completed application, but aims to process an application within 6 weeks for UCITS schemes. 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 alteration to the prospectus that would be of significance;

   3. (c)

      any reconstruction or amalgamation involving the ICVC;

   4. (d)

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

   5. (e)

      any proposal to replace a director, to 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 an authorisation order 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 notice as for AUTs apply.

The FSA has a power of intervention if it appears there is a breach of the Act or COLL, or 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, including publication in the London or Edinburgh Gazette of the issue or receipt by the FSA of those documents as listed in regulation 78.