Related provisions for BIPRU 12.7.9

PERG 8.32.1G01/07/2005

Under article 25 of the Regulated Activities Order, arranging deals in investments covers:(1) making arrangements for another person (whether as principal or agent) to buy, sell, subscribe for or underwrite a particular investment which is:(a) a security; or(b) a relevant investment; or(c) an investment of the kind specified by article 86, or article 89 so far as relevant to that article (Lloyd’s syndicate membership and capacity and rights to or interests in such investments);

PERG 9.11.1G01/04/2013

Table There are some frequently asked questions about the application of the definition of an open-ended investment company in the following table. This table belongs to PERG 9.2.4 G (Introduction).

Question	Answer
1	Can a body corporate be both open-ended and closed-ended at the same time?	In the FCA's view, the answer to this question is 'no'. The fact that the investment condition is applied to BC (rather than to particular shares in, or securities of, BC) means that a body corporate is either an open-ended investment company as defined in section 236 of the Act or it is not. Where BC is an open-ended investment company, all of its securities would be treated as units of a collective investment scheme for the purpose of the Act. A body corporate formed in another jurisdiction may, however, be regarded as open-ended under the laws of that jurisdiction but not come within the definition of an open-ended investment company in section 236 (and vice versa).
2	Can an open-ended investment company become closed-ended (or a closed-ended body become open-ended)?	In the FCA's view, the answer to this question is 'yes'. A body corporate may change from open-ended to closed-ended (and vice versa) if, taking an overall view, circumstances change so that a hypothetical reasonable investor would consider that the investment condition is no longer met (or vice versa). This might happen where, for example, an open-ended investment company stops its policy of redeeming shares or securities at regular intervals (so removing the expectation that a reasonable investor would be able to realise his investment within a period appearing to him to be reasonable). See also PERG 9.7.5 G.
3	Does the liquidation of a body corporate affect the assessment of whether or not the body is an open-ended investment company?	The FCA considers that the possibility that a body corporate that would otherwise be regarded as closed-ended may be wound up has no effect at all on the nature of the body corporate before the winding up. The fact that, on a winding up, the shares or securities of any investor in the body corporate may be converted into cash or money on the winding up (and so 'realised') would not, in the FCA's view, affect the outcome of applying the expectation test to the body corporate when looked at as a whole. The answer to Question 4 explains that investment in a closed-ended fixed term company shortly before its winding up does not, in the FCA view, change the closed-ended nature of the company. For companies with no fixed term, the theoretical possibility of a winding up at some uncertain future point is not, in the FCA's view, a matter that would generally carry weight with a reasonable investor in assessing whether he could expect to be able to realise his investment within a reasonable period.
4	Does a fixed term closed-ended investment company become an open-ended investment company simply because the fixed term will expire?	In the FCA's view, the answer to this is 'no'. The termination of the body corporate is an event that has always been contemplated (and it will appear in the company's constitution). Even as the date of the expiry of the fixed term approaches, there is nothing about the body corporate itself that changes so as to cause a fundamental reassessment of its nature as something other than closed-ended. Addressing this very point in parliamentary debate, the Economic Secretary to the Treasury stated that the "aim and effect [of the definition] is to cover companies that look, to a reasonable investor, like open-ended investment companies". The Minister added that "A reasonable investor's overall expectations of potential investment in a company when its status with respect to the definition is being judged will determine whether it meets the definition. The matter is therefore, definitional rather than one of proximity to liquidation". (Hansard HC, 5 June 2000 col 124).
5	In what circumstances will a body corporate that issues a mixture of redeemable and non-redeemable shares or securities be an open-ended investment company?	In the FCA's view, the existence of non-redeemable shares or securities will not, of itself, rule out the possibility of a body corporate falling within the definition of an open-ended investment company. All the relevant circumstances will need to be considered (see PERG 9.6.4 G, PERG 9.2.8.8G and PERG 9.8.9 G). So the following points need to be taken into account. The precise terms of the issue of all the shares or securities will be relevant to the question whether the investment condition is met, as will any arrangements that may exist to allow the investor to realise his investment by other means. The proportions of the different share classes will be relevant to the impression the reasonable investor forms of the body corporate. A body corporate that issues only a minimal amount of redeemable shares or securities will not, in theFCA's view, be an open-ended investment company. A body corporate that issues a minimal amount of non-redeemable shares or securities will be likely to be an open-ended investment company. A body corporate that falls within the definition of an open-ended investment company is likely to have (and to be marketed as having) mainly redeemable shares or securities. However, whether or not the body corporate does fall within the definition in any particular case will be subject to any contrary indications there may be in its constitutional documents or otherwise. Where shares or securities are only redeemable after the end of a stated period, this factor will make it more likely that the body corporate is open-ended than if the shares or securities are never redeemable.
6	Does "realised on a basis calculated wholly or mainly by reference to..." in section 236(3)(b) apply to an investor buying investment trust company shares traded on a recognised investment exchange because of usual market practice that the shares trade at a discount to asset value?	In the FCA's view, the answer is 'no' (for the reasons set out in PERG 9.9.4 G to PERG 9.9.6 G).
7	Does the practice of UK investment trust companies buying back shares result in them becoming open-ended investment companies?	In the FCA's view, it does not, because its actions will comply with company law: see section 236(4) of the Act and PERG 9.6.5 G.
8	Would a body corporate holding out redemption or repurchase of its shares or securities every six months be an open-ended investment company?	In the FCA's view a period of six months would generally be too long to be a reasonable period for a liquid securities fund. A shorter period affording more scope for an investor to take advantage of any profits caused by fluctuations in the market would be more likely to be a reasonable period for the purpose of the realisation of the investment (in the context of the 'expectation' test, see PERG 9.8 and, in particular, PERG 9.8.9 G which sets out the kind of factors that may need to be considered in applying the test).
9	Would an initial period during which it is not possible to realise investment in a body corporate mean that the body corporate could not satisfy the investment condition?	In the FCA's view, the answer to that question is 'no'. In applying the investment condition, the body corporate must be considered as a whole (see PERG 9.6.3 G). At the time that the shares or securities in a body corporate are issued, a reasonable investor may expect that he will be able to realise his investment within a reasonable period notwithstanding that there will first be a short-term delay before he can do so. Whether or not the 'expectation test' is satisfied will depend on all the circumstances (see PERG 9.8.9 G).

DTR 6.3.1R20/01/2007

This section applies to:(1) an issuer:(a) whose transferable securities are admitted to trading; and(b) whose Home State is the United Kingdom; [Note: article 21(1) of the TD](2) a person who has applied, without the issuer's consent, for the admission of its transferable securities to trading on a regulated market; and [Note: article 21(1) of the TD](3) transferable securities that are admitted to trading only in the United Kingdom which is the Host State and not in the Home

CASS 9.2.1R01/03/2011

(1) 1A firm must make available to each of its clients to whom it provides prime brokerage services a statement in a durable medium:(a) showing the value at the close of each business day of the items in (3); and(b) detailing any other matters which that firm considers are necessary to ensure that a client has up-to-date and accurate information about the amount of client money and the value of safe custody assets held by that firm for it.(2) The statement must be made available

DEPP 6.2.26G01/04/2013

Where the behaviour of a person which amounts to market abuse is behaviour to which the Takeover Code is relevant, the use of the Takeover Panel's powers will often be sufficient to address the relevant concerns. In cases where this is not so, the FCA4 will need to consider whether it is appropriate to use any of its own powers under the market abuse regime. The principal circumstances in which the FCA4 is likely to consider such exercise are:44(1) where the behaviour falls within

PERG 2.3.2G28/02/2014

There is power in the Act for the Treasury to change the meaning of the business element by including or excluding certain things. They have exercised this power (see the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (SI 2001/1177), the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2003 (SI 2003/1476),3 the Financial Services and Markets Act 2000 (Carrying on Regulated Activities

PERG 4.12.5G01/07/2005

Where a person is already an appointed representative (in relation to any non-mortgage activities) and he proposes to carry on any regulated mortgage activities, he will need to consider the following matters.(1) He must become authorised if his proposed mortgage activities include either entering into a regulated mortgage contract or administering a regulated mortgage contract. These activities may not be carried on by appointed representatives and the Act does not permit any

COLL 3.2.6R28/02/2014

This table belongs to COLL 3.2.4 R (Matters which must be included in the instrument constituting the fund14)

14

	Name of scheme
1	A statement of:
	(1)	the name of the authorised fund; and
	(2)	whether the authorised fund is a UCITS scheme or a non-UCITS retail scheme.
	Investment powers in eligible markets
2	A statement that, subject to any restriction in the rules in this sourcebook or the instrument constituting the fund 14, the scheme has the power to invest in any eligible securities market or deal on any eligible derivatives market to the extent that power to do so is conferred by COLL 5 (Investment and borrowing powers). 14
	Unitholder's liability to pay
3	A provision that a unitholder in an AUT, ICVC or co-ownership scheme 12 is not liable to make any further payment after he has paid the price of his units and that no further liability can be imposed on him in respect of the units which he holds.
3A	A provision that a unitholder in a limited partnership scheme is not liable for the debts or obligations of the limited partnership scheme beyond the amount of the scheme property which is available to the authorised contractual scheme manager to meet such debts or obligations, provided that the unitholder does not take part in the management of the partnership business.12
3B	A provision that the exercise of rights conferred on limited partners by FCA rules does not constitute taking part in the management of the partnership business.12
	Base currency
4	A statement of the base currency of the scheme.
	Valuation and pricing
5	A statement setting out the basis for the valuation and pricing of the scheme.
	Duration of the scheme
6	If the scheme is to be wound up after a particular period expires, a statement to that effect.
	Object of the scheme
7	A statement:
	(1)	as to the object of the scheme, in particular the types of investments and assets in which it and each sub-fund (where applicable) may invest; and
	(2)	that the object of the scheme is to invest in property of that kind with the aim of spreading investment risk and giving unitholders the benefits of the results of the management of that property.
27A	Where the authorised fund is a qualifying money market fund, a statement to that effect and a statement that the authorised fund's investment objectives and policies will meet the conditions specified in the definition of qualifying money market fund.
	[deleted]13 13
	Government and public securities: investment in one issuer
8	Where relevant, for a UCITS scheme, a statement in accordance with COLL 5.2.12 R (Spread: government and public securities) as to the individual states or bodies in which over 35% of the value of the scheme may be invested in government and public securities.
	Classes of unit
9	A statement:
	(1)	specifying the classes of unit that may be issued, and for a scheme which is an umbrella, the classes that may be issued in respect of each sub-fund; and
	(2)	if the rights of any class of unit differ, a statement describing those differences in relation to the differing classes.
	Authorised fund manager's charges and expenses
10	A statement setting out the basis on which the authorised fund manager may make a charge and recover expenses out of the scheme property.
	Issue or cancellation directly through the ICVC or depositary of an AUT or ACS12
11	Where relevant, a statement authorising the issue or cancellation of units to take place through the ICVC or depositary of an AUT or ACS directly.12 12
	In specie issue and cancellation
12	Where relevant, a statement authorising payment for the issue or cancellation of units to be made by the transfer of assets other than cash.
	Restrictions on sale and redemption
13	Where relevant, the restrictions which will apply in relation to the sale and redemption of units under COLL 6.2.16 R (Sale and redemption).
	Voting at meetings
14	The manner in which votes may be given at a meeting of unitholders under COLL 4.4.8 R (Voting rights).
	Certificates
15	A statement:
	(1)	for ICVCs and AUTs,12 authorising the issue of bearer certificates if any, and how such holders are to identify themselves; and
	(2)	authorising the person responsible for the register to charge for issuing any document recording, or for amending, an entry on the register, other than on the issue or sale of units.
	Income
16	A statement setting out the basis for the distribution or re-investment of income.
	Income equalisation
17	Where relevant, a provision for income equalisation.
	Redemption or cancellation of units on breach of law or rules
18	A statement that where any holding of units by a unitholder is (or is reasonably considered by the authorised fund manager to be) an infringement of any law, governmental regulation or rule, those units must be redeemed or cancelled.
	ICVCs: larger and smaller denomination shares
19	A statement of the proportion of a larger denomination share represented by a smaller denomination share for any relevant unit class.
	ICVCs: resolution to remove a director
20	A statement that the ICVC may (without prejudice to the requirements of regulation 21 of the OEIC Regulations (The Authority's approval for certain changes in respect of a company), by a resolution passed by a simple majority of the votes validly cast for and against the resolution at a general meeting of unitholders, remove a director before his period of office expires, despite anything else in the ICVC's instrument of incorporation or in any agreement between the ICVC and that director.
	ICVCs: unit transfers
21	A statement that the person designated for the purposes of paragraph 4 of Schedule 4 to the OEIC Regulations (Share transfers) is the person who, for the time being, is the ACD of the ICVC.1 7
	ICVCs and ACSs: Charges and expenses12
22	A statement that charges or expenses of the ICVCor ACS 12 may be taken out of the scheme property.10
	10ICVCs: Umbrella schemes - principle of limited recourse
1022A	For an ICVC which is an umbrella, a statement that the assets of a sub-fund belong exclusively to that sub-fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the umbrella, or any other sub-fund, and shall not be available for any such purpose.
	Co-ownership schemes: umbrella schemes - principle of limited recourse
22B	For a co-ownership scheme which is an umbrella, a statement that the property subject to a sub-fund is beneficially owned by the participants in that sub-fund as tenants in common (or, in Scotland, is the common property of the participants in that sub-fund) and must not be used to discharge any liabilities of, or meet any claims against, any person other than the participants in that sub-fund.12
	AUTs: governing law for a trust deed
23	A statement that the trust deed is made under and governed by the law of England and Wales, Wales or Scotland or Northern Ireland.
	AUTs: trust deed to be binding and authoritative
24	A statement that the trust deed:
	(1)	is binding on each unitholder as if it had been a party to it and that it is bound by its provisions; and
	(2)	authorises and requires the trustee and the manager to do the things required or permitted of them by its terms.
	AUTs: declaration of trust
25	A declaration that, subject to the provisions of the trust deed and all rules made under section 247 of the Act (Trust scheme rules) and for the time being in force:
	(1)	the scheme property (other than sums standing to the credit of the distribution account) is held by the trustee on trust for the unitholders according to the number of units held by each unitholder or, where relevant, according to the number of undivided shares in the scheme property represented by the units held by each unitholder; and
	(2)	the sums standing to the credit of the distribution account are held by the trustee on trust to distribute or apply them in accordance with COLL 6.8 (Income: accounting, allocation and distribution).
	AUTs: trustee's remuneration
26	Where relevant, a statement authorising payments to the trustee by way of remuneration for its services to be paid (in whole or in part) out of the scheme property.
	AUTs: responsibility for the register
27	A statement identifying the person responsible under the rules for the maintenance of the register.
	ACSs: governing law for a contractual scheme deed
1227A	A statement that the contractual scheme deed is made under and governed by the law of England and Wales, or Scotland or Northern Ireland.
	ACSs: contractual scheme deed to be binding and authoritative
1227B	A statement that the contractual scheme deed:
	(1)	is binding on each unitholder as if it had been a party to it and that it is bound by its provisions; and
	(2)	authorises and requires the depositary and the authorised contractual manager to do the things required or permitted of them by its terms.
	ACSs: ownership of scheme property
1227C	A statement that, subject to the provisions of the contractual scheme deed and all rules made under section 261I of the Act (Contractual scheme rules) and for the time being in force:
	(1)	the scheme property (other than sums standing to the credit of the distribution account) is held by, or to the order of, the depositary for and on behalf of the unitholders according to the number of units held by each unitholder or, where relevant, according to the number of undivided shares in the scheme property represented by the units held by each unitholder;
	(2)	the sums standing to the credit of the distribution account are held by the depositary to distribute or apply them in accordance with COLL 6.8 (Income: accounting, allocation and distribution); and
	(3)	the scheme property of a co-ownership scheme is beneficially owned by the participants as tenants in common (or, in Scotland, is the common property of the participants).
	ACSs: responsibility for the register
1227D	A statement identifying the person responsible under the rules for the maintenance of the register.
	ACSs: UCITS and NURS eligible investors
1227E	For an ACS which is a UCITS scheme or a non-UCITS retail scheme, a statement that units may not be issued to a person other than a:
	(1)	professional ACS investor;
	(2)	large ACS investor; or
	(3)	person who already holds units in the scheme.
1227F	A statement that the authorised contractual scheme manager must redeem units as soon as practicable after becoming aware that those units are vested in anyone (whether as a result of subscription or transfer of units) other than a person meeting the criteria in paragraph 27E.
	ACSs: UCITS and NURS transfer of units
1227G	(1)	A statement whether the transfer of units in the ACS scheme is either:
		(a) prohibited; or
		(b) allowed
	(2)	Where transfer of units is allowed in accordance with (1)(b), a statement that units may only be transferred in accordance with the conditions specified by FCA rules, including that units may not be transferred to a person other than a:
		(a) professional ACS investor;
		(b) large ACS investor; or
		(c) person who already holds units in the scheme.
	(3)	For a co-ownership scheme which is an umbrella, a statement in accordance with (1)(a) or (1)(b) and, where appropriate, a statement in accordance with (2), must also be made for the sub-funds. Where individual sub-funds have differing policies in relation to transfer of units, separate statements are required.
	Co-ownership schemes: constitution
1227H	For a co-ownership scheme, a statement that the arrangements constituting the scheme are intended to constitute a co-ownership scheme as defined in section 235A(2) of the Act.
	Co-ownership schemes: operator's powers
1227I	A statement that the operator of a co-ownership scheme is authorised to:
	(1)	acquire, manage and dispose of the scheme property; and
	(2)	enter into contracts which are binding on unitholders for the purposes of, or in connection with, the acquisition, management or disposal of scheme property.
	Co-ownership schemes: winding-up
1227J	A statement that the operator and depositary of a co-ownership scheme are required to wind up the scheme if directed to do so by the FCA in exercise of its power under section 261X (Directions) or section 261Z (Winding up or merger of master UCITS) of the Act.
	Limited partnership schemes: participants
1227K	A statement that the limited partners, other than the nominated partner, are to be the participants in the scheme.
	Limited partnership schemes: resignation of limited partners
1227L	A statement that the scheme is not dissolved on any person ceasing to be a limited partner or nominated partner provided that there remains at least one limited partner.
	Limited partnership schemes: inability to operate as an umbrella
1227M	A statement that the limited partnership scheme prohibits pooling as is mentioned in section 235(3)(a) of the Act in relation to separate parts of the scheme property, with the effect that the scheme cannot be an umbrella.
	3Investment in overseas4 property through an intermediate holding vehicle
328	3If investment in an overseas4 immovable is to be made through an intermediate holding vehicle or a series of intermediate holding vehicles, a statement that the purpose of that intermediate holding vehicle or series of intermediate holding vehicles will be to enable the holding of overseas4 immovables by the scheme.

COBS 4.13.2R01/07/2011

(1) A firm must ensure that a marketing communication that comprises an invitation to purchase units in a UCITS scheme or EEA UCITS scheme and that contains specific information about the scheme:(a) makes no statement that contradicts or diminishes the significance of the information contained in the prospectus and the key investor information document or EEA key investor information document for the scheme;(b) indicates that a prospectus exists for the scheme and that the key

BIPRU 9.5.1EG31/12/2010

1An originator should clearly state the scope of the waiver of the requirements in BIPRU 9.5.1R (6) and (7) it is seeking in its application. For example, residential mortgage backed securities may be subdivided into prime and sub-prime with only one sub-category within the scope of the waiver. Relevant asset classes may therefore be defined according to a firm's internal usage of terms.

REC 2.3.12G01/04/2013

4For the purposes of REC 2.3, "net capital" should be in the form of equity. For this purpose, the FCA5 considers that common stock, retained earnings, disclosed reserves and other instruments classified as common equity tier one capital or additional tier one capital constitute equity. The FCA5 considers that, when calculating its net capital, a UK recognised body:55(1) should deduct holdings of its own securities, or those of any undertaking in the same group as the UK recognised

SUP 12.5.2G01/01/2014

(1) Regulations 3(1) 8and (2) of the Appointed Representatives Regulations make it a requirement that the contract between the firm and the appointed representative (unless it prohibits the appointed representative from representing other counterparties) contains a provision enabling the firm to:488(a) impose such a prohibition; or(b) impose restrictions as to the other counterparties which the appointed representative may represent, or as to the types of investment in relation

TC App 1.1.1R31/12/2012

1Activity	Products/Sectors		Is there an appropriate qualification4requirement? 4
Designated investment business carried on for a retail client
Providing basic advice	1.	Stakeholder products excluding a deposit-based stakeholder product	No
Advising	2.	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	Yes
	3.	Derivatives	Yes2
	4.	Packaged products 6 Retail investment products 6 which are not broker funds	Yes2
	5.	Friendly Society life policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales	No2
	6.	Friendly Society tax-exempt policies (other than Holloway sickness policies where the Holloway policy special application conditions are met)5	Yes2
	7.	Long-term care insurance contracts	Yes2
	8.	Investments in the course of corporate finance business	Yes2
	9.	Advising on syndicate participation at Lloyd's	Yes2
Undertaking the activity in column 2	10.	Broker fund adviser	Yes
Undertaking the activity in column 2	11.	Pension transfer specialist	Yes2
Advising and dealing	12.	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	Yes
Advising and dealing	13.	Derivatives	Yes2
4Dealing	13A.8	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	No
4Dealing	413B.8	Derivatives	No
8 MiFID business bidding	13C.	Emissions auction products that are financial instruments	No
Managing	14.	Investments	Yes
Overseeing on a day-to-day basis	15.	Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme	Yes
	16.	Safeguarding and administering investments or holding client money	Yes2
	17.	Administrative functions in relation to managing investments	Yes2
	18.	Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies	Yes2
	19.	Administrative functions in relation to the operation of stakeholder pension schemes	Yes2
Regulated mortgage activity and reversion activity carried on for a customer
Advising	20.	Regulated mortgage contracts for a non-business purpose	Yes
Advising	21.	Equity release transactions	Yes2
Designing scripted questions for non-advised sales	22.	Equity release transactions	Yes
Overseeing non-advised sales on a day-to-day basis	23.	Equity release transactions	Yes
Non-investment insurance business carried on for a consumer
Advising	24.	Non-investment insurance contracts	No
3 Regulated sale and rent back activity carried on for a customer
Advising	25.	Regulated sale and rent back agreements	No
Overseeing non-advised saleson a day-to-day basis	26.	Regulated sale and rent back agreements	No
Notes:
1.	In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them.
2.	Thus, for example, paragraph 24consistent with the heading above it3, refers only to advice on non-investment insurance contracts given to a consumer. 3

COBS 2.2.-1R31/12/2012

(1) 1This section applies in relation to MiFID or equivalent third country business.(2) This section applies in relation to other designated investment business carried on for a retail client: (a) in relation to a derivative, a warrant or stock lending activity, but as regards the matters in COBS 2.2.1R (1)(b) only; and (b) in relation to a retail investment product2, but as regards the matters in COBS 2.2.1R (1)(a) and (d) only.2[Note: article 19(3) of MiFID]

Related provisions for BIPRU 12.7.9

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