give an overview of the definition (see PERG 9.3 (The definition)) and describe its three main elements:
it must satisfy the 'investment' condition in section 236(3) of the Act (see PERG 9.6 (The investment condition (section 236(3) of the Act): general) to PERG 9.9 (The investment condition: the 'satisfaction test' (section 236(3)(b) of the Act))); and
outline the implications for a body corporate if it does, or does not, fall within the definition of an open-ended investment company (see PERG 9.10 (Significance of being an open-ended investment company)).
This guidance is issued under section 157of the Act (Guidance). It is designed to throw light on particular aspects of regulatory requirements, not to be an exhaustive description of a person's obligations. If a person acts in line with the guidance in the circumstances it contemplates, the FSA will proceed on the footing that the person has complied with aspects of the requirement to which the guidance relates. Rights conferred on third parties cannot be affected by guidance given by the FSA. This guidance represents the FSA's view, and does not bind the courts. For example, it would not bind the courts in relation to an action for damages brought by a private person for breach of a rule (see section 150of the Act (Action for damages)), or in relation to the enforceability of a contract where there has been a breach of the general prohibition on carrying on a regulated activity in the United Kingdom without authorisation (see sections 26 to 29 of the Act (Enforceability of agreements)). A person may need to seek his own legal advice. Anyone reading this guidance should refer to the Act and to the various Orders that are referred to in this guidance. These should be used to find out the precise scope and effect of any particular provision referred to in this guidance.
The only kind of body corporate of an open-ended kind that may currently be formed under the law of the United Kingdom is one that is authorised by the FSA. A person intending to form an open-ended body corporate that has its head office in Great Britain should refer to the Open-ended Investment Companies Regulations 2001 (SI 2001/1228). Bodies corporate formed under these Regulations are referred to in the Handbook as investment companies with variable capital (or ' ICVCs '). COLL 2 (Authorised fund applications) contains3 rules and guidance on forming such bodies corporate.233