LR 15.4 Continuing obligations

A closed-ended investment fund must comply with all of the requirements of LR 9 (Continuing obligations) subject to the modifications and additional requirements set out in this section.

1A closed-ended investment fund must, at all times, have a published investment policy which complies with LR 15.2.7 R.

8LR 9.2.22AR to LR 9.2.22FG do not apply to a close-ended investment fund.

A closed-ended investment fund must, at all times, invest and manage its assets:

1. (1)

   in a way which is consistent with its object of spreading investment risk; and

2. (2)

   in accordance with its published investment policy.

1A closed-ended investment fund must comply with LR 15.2.3A R at all times.

A closed-ended investment fund must, when making an acquisition of a constituent investment, observe the principles relating to cross-holdings in LR 15.2.5 R.

If a closed-ended investment fund principally invests its funds in the manner set out in LR 15.2.6 R1, the closed-ended investment fund must ensure that LR 15.2.6 R is complied with at all times.

LR 15.2.11 R to LR 15.2.13A R1 apply at all times to a closed-ended investment fund.

4The board of directors or equivalent body of the issuer must effectively monitor and manage the performance of its key service providers, including any investment manager appointed by the issuer, on an on-going basis.

Unless LR 15.4.8A R applies, a6 closed-ended investment fund must :6

1. (1)

   submit any proposed material change to its published investment policy to the FCA for approval; and6

2. (2)

   having obtained the FCA's approval, obtain the prior approval of its shareholders to any material change to its published investment policy.6

6A closed-ended investment fund is not required to seek the FCA’s approval for a material change to its published investment policy if:

1. (1)

   the change is proposed to enable the winding up of the closed-ended investment fund; and

2. (2)

   the winding up:

   1. (a)

      is in accordance with the constitution of the closed-ended investment fund; and

   2. (b)

      will be submitted for approval by the shareholders of the closed-ended investment fund at the same time as the proposed material change to the investment policy.

An existing listed class of equity shares 2may not be converted into a new class or an unlisted class unless prior approval has been given by the shareholders of1 that existing class.

1. (1)

   Unless authorised by its shareholders1, a closed-ended investment fund may not issue further shares of the same class as existing shares (including issues of treasury shares) for cash at a price below the net asset value per share of those shares unless they are first offered pro rata to existing holders of shares of that class.

   1
2. (2)

   When calculating the net asset value per share, treasury shares held by the closed-ended investment fund should not be taken into account.

3A closed-ended investment fund is not required to comply with LR 9.2.20 R.

5A closed-ended investment fund is not required to comply with LR 9.2.2A R to LR 9.2.2G R.

1. (1)

   5A closed-ended investment fund is not required to comply with LR 9.2.23 R in so far as it relates to LR 9.2.2A R, LR 9.2.2E R and LR 9.2.2F R.

2. (2)

   A closed-ended investment fund is not required to comply with LR 9.2.24 R to LR 9.2.25 R.

5A closed-ended investment fund is not required to comply with LR 9.8.4R(14) and LR 9.8.6R(8)7.

9When making a statement required by LR 9.8.6R(9) in its annual financial report, a closed-ended investment fund need not set out the following matters if they are inapplicable to the closed-ended investment fund and its statement sets out the reasons why those matters are inapplicable:

1. (1)

   whether the closed-ended investment fund has met the board diversity target in LR 9.8.6R(9)(a)(ii); and

2. (2)

   matters set out in LR 9.8.6R(9)(b) to the extent that they relate to the board diversity target in LR 9.8.6R(9)(a)(ii).

9When including numerical data required by LR 9.8.6R(10) in its annual financial report, a closed-ended investment fund need not include the fields in the first row of each of the tables in LR 9 Annex 2, and the corresponding data for those fields, that are inapplicable to the closed-ended investment fund, if it sets out in a statement accompanying the numerical data the reasons why those fields are inapplicable.

5A closed-ended investment fund is not required to comply with LR 13.8.17 R.