Related provisions for APER 4.1.13

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

EG 8.2.6RP
1Examples of circumstances in which the FCA will consider varying a firm'sPart 4A permission because it has serious concerns about a firm, or about the way its business is being or has been conducted include where: (1) in relation to the grounds for exercising the power under section 55J(1)(a) or section 55L(2)(a) of the Act, the firm appears to be failing, or appears likely to fail, to satisfy the threshold conditions relating to one or more, or all, of its regulated activities,
COLL 11.6.13RRP
Where the authorised fund manager of a feeder UCITS gives notice to the FCA under section 251 or section 261Q1 of the Act or regulation 21 of the OEIC Regulations that it intends to wind up the scheme, it must inform:(1) the unitholders of the feeder UCITS; and(2) where notice is given under COLL 11.6.5R (4) (Application for approval by a feeder UCITS where a master UCITS merges or divides), the authorised fund manager of the master UCITS;of its intention without undue delay.[Note:
COBS 18.5.10ERP
  1. (1)

    In order to provide adequate information to describe how the fund6 is governed, a small authorised UK AIFM of an unauthorised AIF or a residual CIS operator6 should include in the fund6 documents a provision about each of the items of relevant information set out in the following table (Content of fund6 documents).

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  2. (2)

    Compliance with (1) may be relied on as tending to establish compliance with COBS 18.5.5 R.

  3. (3)

    Contravention of (1) may be relied on as tending to establish contravention of COBS 18.5.5 R.

Table: Content of fund6 documents

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Thefund6 documents should include provision about:

6

(1)

Regulator

The firm statutory status in accordance with GEN 4 Annex 1 R (Statutory status disclosure);

(2)

Services

the nature of the services that the firm will provide6;

6

(3)

Payments for services

details of any payment for services payable by the fund or from the property of the fund6 or investors in the fund to the firm6, including where appropriate:

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(a)

the basis of calculation;

(b)

how it is to be paid and collected;

(c)

how frequently it is to be paid; and

(d)

whether or not any other payment is receivable by the firm6 (or to its knowledge by any of its associates) in connection with any transactions effected by the firm6 with or for the fund6, in addition to or in lieu of any fees;

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(4)

Commencement

when and how the firm6 is appointed;

6

(5)

Accounting

the arrangements for accounting to the fund or investors in the fund6 for any transaction effected;

6

(6)

Termination method

how the appointment of the firm6 may be terminated;

6

(7)

Complaints procedure

how to complain to the firm6 and a statement that the investors in the fund6 may subsequently complain direct to the Financial Ombudsman Service;

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(8)

Compensation

whether or not compensation may be available from the compensation scheme should the firm6 be unable to meet its liabilities, and information about any other applicable compensation scheme; and, for each applicable compensation6 scheme, the extent and level of cover and how further information can be obtained;

6

(9)

Investment objectives

the investment objectives for the portfolio of the fund6;

6

(10)

Restrictions

(a)

any restrictions on:

(i)

the types of investments or property which may be included in the portfolio of the fund6;

6

(ii)

the markets on which investments or property may be acquired for the portfolio of the fund6;

6

(iii)

the amount or value of any one investment or asset, or on the proportion of the portfolio of the fund6 which any one investment or asset or any particular kind of investment or asset may constitute; or

6

(b)

that there are no such restrictions;

(11)

Holding fund6 assets

6

(a)

if it is the case, that the firm6 will:

6

(i)

hold money on behalf of the fund6 or be the custodian of investments or other property of the fund6; or

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(ii)

arrange for some other person to act in either capacity and, if so, whether that person is an associate of the firm6 identifying that person and describing the nature of any association; and

6

(b)

in either case:

(i)

how any money is to be deposited;

(ii)

the arrangements for recording and separately identifying registrable investments of the fund6 and, where the registered holder is the firm's6 own nominee, that the firm6 will be responsible for the acts and omissions of that person;

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(iii)

the extent to which the firm6 accepts liability for any loss of the investment of the fund6;

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(iv)

the extent to which the firm6 or any other person mentioned in (11)(a)(ii), may hold a lien or security interest over investments of the fund6;

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(v)

where investments of the fund6 will be registered collectively in the same name, a statement that the entitlements of the fund6 may not be identifiable by separate certificates or other physical documents of title, and that, should the firm6 default, any shortfall in investments of the fund6 registered in that name may be shared proportionately among all fund6 and any other customers of the firm6 whose investments are so registered;

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(vi)

whether or not investments or other property of the fund6 can be lent to, or deposited by way of collateral with, a third party and whether or not money can be borrowed on behalf of the fund6 against the security of those investments or property and, if so, the terms upon which they may be lent or deposited;

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(vii)

the arrangements for accounting to the fund6 for investments of the fund6, for income received (including any interest on money and any income earned by lending investments or other property) of the fund6, and for rights conferred in respect of investments or other property of the fund6;

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(viii)

the arrangements for determining the exercise of any voting rights conferred by investments of the fund6; and

6

(ix)

where investments of the fund6 may be held by an eligible custodian outside the United Kingdom, a general statement that different settlement, legal and regulatory requirements, and different practices relating to the segregation of those investments, may apply;

6

(12)

Clients' money outside the United Kingdom

if it is the case, that the firm6 may hold the money of the fund6 in a client bank account outside the United Kingdom;

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(13)

Exchange rates

if a liability of the fund6 in one currency is to be matched by an asset in a different currency, or if the services to be provided to the firm for the fund6 may relate to an investment denominated in a currency other than the currency in which the investments of the fund6 are valued, a warning that a movement of exchange rates may have a separate effect, unfavourable or favourable, on the gain or loss otherwise made on the investments of the fund6;

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(14)

Stabilised investments

if it is the case, that the firm6 is to have the right under the fund6documents to effect transactions in investments the prices of which may be the subject of stabilisation;

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(15)

Conflict of interest and material interest

if it is the case, that the firm6 is to have the right under the agreement or instrument constituting the fund6 to effect transactions on behalf of the fund6 in which the firm6 has directly or indirectly a material interest (except for an interest arising solely from the investment of the firm6 as agent for the fund6), or a relationship of any description with another party which may involve a conflict with the firm6 duty to the fund6, together with a disclosure of the nature of the interest or relationship;

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(16)

Research and inducements12

how the firm intends to pay for research. For example, whether the firm proposes to pay for research directly or to use a research payment account12;

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(17)

Acting as principal

if it is the case, that the firm6 may act as principal in a transaction with the fund6;

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(18)

Stock lending

if it is the case, that the firm6 may undertake stock lending activity with or for the fund6 specifying the type of assets of the fund6 to be lent, the type and value of relevant collateral from the borrower and the method and amount of payment due to the fund6 in respect of the lending;

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(19)

Transactions involving contingent liability investments

(a)

if it is the case, that the agreement orinstrument constituting the fund6 allows the firm6 to effect transactions involving contingent liability investments for the account of the portfolio of the fund6;

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(b)

if applicable, whether there are any limits on the amount to be committed by way of margin and, if so, what those limits are; and

(c)

if applicable, that the firm6 has the authority to effect transactions involving contingent liability investments otherwise than under the rules of a recognised investment exchange and in a contract traded thereon;

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(20)

Periodic statements

(a)

the frequency of any periodic statement (this should not be less than once every 12 months) except where a periodic statement is not required (see COBS 18.5.13R); and

(b)

whether those statements will include some measure of performance, and, if so, what the basis of that measurement will be;

(21)

Valuation

the bases on which assets comprised in the portfolio of the fund6 are to be valued;

6

(22)

Borrowings

if it is the case, that the firm6 may supplement the funds in the portfolio of the fund6 and, if it may do so:

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(a)

the circumstances in which the firm6 may do so;

6

(b)

whether there are any limits on the extent to which the firm6 may do so and, if so, what those limits are; and

6

(c)

any circumstances in which such limits may be exceeded;

(23)

Underwriting commitments

if it is the case, that the firm6 may for the account of the portfolio of the fund6 underwrite or sub-underwrite any issue or offer for sale of securities, and:

66

(a)

whether there are any restrictions on the categories of securities which may be underwritten and, if so, what these restrictions are; and

(b)

whether there are any financial limits on the extent of the underwriting and, if so, what these limits are;

(24)

Investments in other funds6

whether or not the portfolio may invest in fund either managed or advised by the firm6 or by an associate of the firm or in a fund6 which is not a regulated collective investment scheme;

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(25)

Investments in securities underwritten by the firm6

whether or not the portfolio may contain securities of which any issue or offer for sale was underwritten, managed or arranged by the firm6 or by an associate of the firm6 during the preceding 12 months.

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