Related provisions for COLL 5.2.23A

1

Investments in own shares

2

Investments in subsidiaries (Note 1)

3

Intangible assets (Note 2)

4

Interim net losses (Note 3)

5

Excess of drawings over profits for a sole trader or a partnership (Note 3)

Notes

1 Investments in subsidiaries are the full balance sheet value.

2 Intangible assets are the full balance sheet value of goodwill, capitalised development costs, brand names, trademarks and similar rights and licences.

3 The interim net losses in row 4, and the excess of drawings in row 5, are in relation to the period following the date as at which the capital resources are being computed.

1

Investments in own shares

2

Investments in subsidiaries (Note 1)

3

Intangible assets (Note 2)

4

Interim net losses (Note 3)

5

Excess of drawings over profits for a sole trader or a partnership (Note 3)

Notes

1. Investments in subsidiaries are the full balance sheet value.

2. Intangible assets are the full balance sheet value of goodwill, capitalised development costs, brand names, trademarks and similar rights and licences.

3. The interim net losses in row 4, and the excess of drawings in row 5, are in relation to the period following the date as at which the capital resources are being computed.

Tier 1

(1)

Paid-up share capital (excluding preference shares)

A

(1A)

Eligible LLP members' capital

(2)

Share premium account

(3)

Reserves

2A

(4)

Non-cumulative preference shares

Less:

(5)

Investments in own shares

B

(6)

Intangible assets

(7)

Material current year losses

4

(8)

Material holdings in credit and financial institutions2

52

(8A)

Excess LLP members' drawings

Tier 1 capital = (A-B)

C

Plus: TIER 2

1

(9)

Revaluation reserves

D

(10)

Fixed term cumulative preference share capital

2

(11)

Long-term Qualifying Subordinated Loans

26

(12)

Other cumulative preference share capital and debt capital2

2

(13)

Qualifying arrangements

7

"Own Funds" = (C+D)

E

Plus: TIER 3

(14)

Net trading book profits

F

28

(15)

Short-term Qualifying Subordinated Loans and excess Tier 2 capital

1(b)2; 9

Less:

(16)

Illiquid assets

G

10

Add:

(17)

Qualifying Property

11

"Liquid Capital" = (E+F+G)

1 Deductions and Ratios (Items 10, 11 and 15)

(a)

[deleted]2

(b)

A firm2which is subject to a liquid capital requirement under IPRU-INV 5.4.1R may take into account qualifying subordinated loans in the calculation of liquid capital up to a maximum of 400% of its Tier 1 capital.

2 Non corporate entities

(a)

In the case of partnerships or sole traders, the following terms should be substituted, as appropriate, for items 1 to 4 in Tier 1 capital:

(i)

partners' capital accounts (excluding loan capital);

(ii)

partners' current accounts (excluding unaudited profits and loan capital);

(iii)

proprietors' account (or other term used to signify the sole trader's capital but excluding unaudited profits).

(b)

Loans other than qualifying subordinated loans shown within partners' or proprietors' accounts must be classified as Tier 2 capital under item 12.

(c)

For the calculation of own funds, partners' current accounts figures are subject to the following adjustments in respect of a defined benefit occupational pension scheme:

(i)

a firm must derecognise any defined benefit asset;

(ii)

a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount. The election must be applied consistently in respect of any one financial year.

Note 1

A firm should keep a record of and be ready to explain to its supervisory contacts in the FCA the reasons for any difference between the deficit reduction amount and any commitment the firm has made in any public document to provide funding in respect of a defined benefit occupational pension scheme.

2A Reserves

For the calculation of own funds the following adjustments apply to the audited reserves figure:

(a)

a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on cash flow hedges of financial instruments measured at cost or amortised cost;

(b)

in respect of a defined benefit occupational pension scheme, a firm must derecognise any defined benefit asset;

(c)

a firm may substitute for a defined benefit liability the firm's deficit reduction amount. The election must be applied consistently in respect of any one financial year.

Note 2

A firm should keep a record of and be ready to explain to its supervisory contacts in the FCA the reasons for any difference between the deficit reduction amount and any commitment the firm has made in any public document to provide funding in respect of a defined benefit occupational pension scheme.

(d)

a firm must not include any unrealised gains from investment property.

Note 3

Unrealised gains from investment property should be reported as part of revaluation reserves.

(e)

where applicable, a firm must deduct any asset in respect of deferred acquisition costs and add back in any liability in respect of deferred income (but exclude from the deduction or addition any asset or liability which will give rise to future cash flows), together with any associated deferred tax.

Note 4

Reserves must be audited unless the firm is exempt from the provisions of Part VII of the Companies Act 1985 (section 249A (Exemptions from audit)), or where applicable, Part 16 of the Companies Act 2006 (section 477 (Small companies: Conditions for exemption from audit)) relating to the audit of accounts.

3 Intangible assets (Item 6)

Intangible assets comprise:

(a)

formation expenses to the extent that these are treated as an asset in the firm's accounts;

(b)

goodwill, to the extent that it is treated as an asset in the firm's accounts; and

(c)

other assets treated as intangibles in the firm's accounts.

Intangible assets do not include a deferred acquisition cost asset.

4 Material current year losses (Item 7)

Losses in current year operating figures must be deducted when calculating Tier 1 capital if such losses are material. For this purpose profits and losses must be calculated quarterly or monthly, as appropriate. If this calculation reveals a net loss it shall only be deemed to be material for the purposes of this Table if it exceeds 10 per cent of the firm's Tier 1 capital.

5 Material holdings in credit and financial institutions (Item 8)

Material holdings comprise:

(a)

where the firm holds more than 10 per cent of the equity share capital of the institution, the value of that holding and the amount of any subordinated loans to the institution and the value of holdings in qualifying capital items or qualifying capital instruments issued by the institution;

(b)

in the case of holdings other than those mentioned in (a) above, the value of holdings of equity share capital in, and the amount of subordinated loans made to, such institutions and the value of holdings in qualifying capital items or qualifying capital instruments issued by such institutions to the extent that the total of such holdings and subordinated loans exceeds 10 per cent of the firm'sown funds calculated before the deduction of item 8.

2

6 Long term qualifying subordinated loans (Item 11)

Loans having the characteristics prescribed by IPRU-INV 5.6.1R may be included in item 11, subject to the limits set out in paragraph (1) above.

2

7 Qualifying arrangements (Item 13)

2

2

2

A firm2 may only include qualifying undertakings in its calculation of liquid capital if:

(i)

it maintains liquid capital equivalent to 6/52 of its annual expenditure in a form other than qualifying undertakings; and

(ii)

the total amount of all qualifying undertakings plus qualifying subordinated loans does not exceed the limits set out in paragraph (1)(b) above.

8 Net trading book profits (Item 14)

Unaudited2 profits can be included at item 14.

This Item must not be included in the liquid capital calculation of a firm whose permitted business includes establishing, operating or winding up a personal pension scheme.

Note 5

Non-trading book interim profits may only be included in Tier 1 of the calculation if they have been independently verified by the firm’s external auditors, unless the firm is exempt from the provisions of Part VII of the Companies Act 1985 (section 249A (Exemptions from audit)), or where applicable, Part 16 of the Companies Act 2006 (section 477 (Small companies: Conditions for exemption from audit)) relating to the audit of accounts.

For this purpose, the external auditor should normally undertake at least the following:

(a)

satisfy himself that the figures forming the basis of the interim profits have been properly extracted from the underlying accounting records;

(b)

review the accounting policies used in calculating the interim profits so as to obtain comfort that they are consistent with those normally adopted by the firm in drawing up its annual financial statements;

(c)

perform analytical review procedures on the results to date, including comparisons of actual performance to date with budget and with the results of prior periods;

(d)

discuss with management the overall performance and financial position of the firm;

(e)

obtain adequate comfort that the implications of current and prospective litigation, all known claims and commitments, changes in business activities and provisions for bad and doubtful debts have been properly taken into account in arriving at the interim profits; and

(f)

follow up problem areas of which the auditors are already aware in the course of auditing the firm’s financial statements.

A firm wishing to include interim profits in Tier 1 capital in a financial return should submit to the FCA with the financial return a verification report signed by its external auditor which states whether the interim results are fairly stated, unless the firm is exempt from the provisions of Part VII of the Companies Act 198 (section 249A (Exemptions from audit)), or where applicable, Part 16 of the Companies Act 2006 (section 477 (Small companies: Conditions for exemption from audit)) relating to the audit of accounts.

Profits on the sale of capital items or arising from other activities which are not directly related to the investment business of the firm may also be included within the calculation of liquid capital, but (unless the firm is exempt as above) only if they can be separately verified by the firm’s auditors. In such a case, such profits can form part of the firm’s Tier 1 capital as profits.

9 Short term qualifying subordinated loans (Item 15)

Loans having the characteristics prescribed by IPRU-INV 5.6.3R may be included in item 15 subject to the limits set out in paragraph (1) above. Tier 2 capital which exceeds the ratios prescribed by paragraph (1)(a) and (b) may be included in item 15 subject to paragraph (1) above.

10 Illiquid assets (Item 16)

Illiquid assets comprise:

(a)

tangible fixed assets.

Note 6

In respect of tangible fixed assets purchased under finance leases the amount to be deducted as an illiquid asset shall be limited to the excess of the asset over the amount of the related liability shown on the balance sheet.

(b)

holdings in, including subordinated loans to, credit or financial institutions which may be included in the own funds of such institutions unless they have been deducted under item 8;

(c)

any investment in undertakings other than credit institutions and other financial institutions where such investments are not readily realisable;

(d)

any deficiency in net assets of a subsidiary;

(e)

deposits not available for repayment within 90 days or less (except for payments in connection with margined futures or options contracts);

Note 7

Where cash is placed on deposit with a maturity of more than 90 days but is repayable on demand subject to the payment of a penalty, then this is not required to be deducted as an illiquid asset but a deduction is required for the amount of the penalty.

(f)

loans, trade and3 other debtors and accruals not falling due to be repaid within 90 days or which are more than one month overdue by reference to the contractual payment date;

(g)

physical stocks (except where subject to the position risk requirement as set out in IPRU-INV 5.11; and

(h)

prepayments to the extent that the period of prepayment exceeds six weeks in the case of a firm subject to the 6/52 expenditure based requirement or thirteen weeks in the case of a firm subject to the 13/52 expenditure based requirement.

(i)

if not otherwise covered, any holding in eligible capital instruments of an insurance undertaking, insurance holding company, or reinsurance undertaking that is a subsidiary or participation. Eligible capital instruments include ordinary share capital, cumulative preference shares, perpetual securities and long-term subordinated loans that are eligible for insurance undertakings under INSPRU 1.

Illiquid assets do not include a defined benefit asset or a deferred acquisition cost asset.

11 Qualifying property (Item 17)

This item comprises the qualifying amount calculated in accordance with IPRU-INV 5.7.1R.

Document status

1

A statement that the document is the prospectus of the authorised fund valid as at a particular date (which shall be the date of the document).

Authorised fund

2

A description of the authorised fund including:

(a)

its name;

29(aa)

its FCA product reference number (PRN);

(b)

whether it is an ICVC, ACS21 or an AUT;17

3(ba)

whether it is a UCITS scheme or a non-UCITS retail scheme;

17(bb)

a statement that unitholders in an AUT, ICVC or co-ownership scheme21 are not liable for the debts of the authorised fund;21

(bc)

a statement that 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);21

(bd)

a statement 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;21

(be)

a statement that the exercise of rights conferred on limited partners by FCArules does not constitute taking part in the management of the partnership business;21

(c)

for an ICVC, the address of its head office and the address of the place in the United Kingdom for service on the ICVC of notices or other documents required or authorised to be served on it;

(ca)

for an ACS that is a limited partnership scheme, the address of the proposed principal place of business of the limited partnership scheme;21

(d)

the effective date of the authorisation order made by the FCA and relevant details of termination, if the duration of the authorised fund is limited;

(e)

its base currency;

(f)

for an ICVC, the maximum and minimum sizes of its capital;

(g)

the circumstances in which it may be wound up under the rules and a summary of the procedure for, and the rights of unitholders under, such a winding up; and1817

18(h)

if it is not an umbrella, a statement that it is a feeder UCITS, a feeder NURS, a fund of alternative investment funds or a property authorised investment fund22, where that is the case.

Umbrella ICVCs or co-ownership schemes21

2A

The following statements for an ICVC or a co-ownership scheme which is an umbrella:21

(a)

for an ICVC, a statement that21its sub-funds are segregated portfolios of assets and, accordingly, 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;

(aa)

for a co-ownership scheme, 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; and21

(b)

for an ICVC or a co-ownership scheme, a statement that21 while the provisions of the OEIC Regulations, and section 261P (Segregated liability in relation to umbrella co-ownership schemes) of the Act in the case of co-ownership schemes,21 provide for segregated liability between sub-funds, the concept of segregated liability is relatively new. Accordingly, where claims are brought by local creditors in foreign courts or under foreign law contracts, it is not yet known how those foreign courts will react to regulations 11A and 11B of the OEIC Regulations or, as the case may be, section 261P of the Act.2118

18Umbrella Schemes

182B

For a UCITS scheme or non-UCITS retail scheme which is an umbrella:29

29(a)

a statement detailing whether each specific sub-fund is a feeder UCITS, a feeder NURS, a fund of alternative investment funds or a property authorised investment fund, as appropriate; and

29(b)

the FCA product reference number (PRN) of each sub-fund.

Investment objectives and policy

3

The following particulars of the investment objectives and policy of the authorised fund:

(a)

the investment objectives, including its financial objectives;

(b)

the authorised fund's investment policy for achieving those investment objectives, including the general nature of the portfolio and, if appropriate, any intended specialisation;

(c)

an indication of any limitations on that investment policy;22

(c-b)

where:33

(i)

a target for a scheme’s performance has been set, or a payment out of scheme property is permitted, by reference to a comparison of one or more aspects of the scheme property or price with fluctuations in the value or price of an index or indices or any other similar factor (a “target benchmark”); or33

(ii)

without being a target benchmark, arrangements are in place in relation to the scheme according to which the composition of the portfolio of the scheme is, or is implied to be, constrained by reference to the value, the price or the components of an index or indices or any other similar factor (a “constraining benchmark”); or33

(iii)

without being a target benchmark or a constraining benchmark, the scheme’s performance is compared against the value or price of an index or indices or any other similar factor (a “comparator benchmark”),33

a statement providing sufficient information for investors to understand the choice and use of any target benchmark, constraining benchmark or comparator benchmark in relation to the scheme;33

(c-a)

where no target benchmark, constraining benchmark or comparator benchmark is used, a statement to that effect and an explanation of how investors can assess the performance of the scheme;33

22(ca)

for an authorised fund that has indicated in its name, investment objectives or fund literature (including in any financial promotions for the fund), through use of descriptions such as 'absolute return', 'total return' or similar, an intention to deliver positive returns in all market conditions (and where there is no actual guarantee of such returns), additional statements in the authorised fund's investment objectives specifying:

(i)

that capital is in fact at risk;

(ii)

the investment period over which the authorised fund aims to achieve a positive return; and

(iii)

there is no guarantee that this will be achieved over that specific, or any, time period;

(d)

the description of assets which the capital property may consist of;

(e)

the proportion of the capital property which may consist of an asset of any description;

(f)

the description of transactions which may be effected on behalf of the authorised fund and an indication of any techniques and instruments or borrowing powers which may be used in the management of the authorised fund;

(g)

a list of the eligible markets through which the authorised fund may invest or deal in accordance with COLL 5.2.10 R (2)(b) (Eligible markets: requirements);

(h)

for an ICVC, a statement as to whether it is intended that the scheme will have an interest in any immovable property or movable property ((in accordance with COLL 5.6.4 R (2) (Investment powers: general) or COLL 5.2.8 R (2) (UCITS schemes: general)) for the direct pursuit of the ICVC's business;

(i)

where COLL 5.2.12 R (3) (Spread: government and public securities) applies:29

29(i)

a prominent statement as to the fact that more than 35% in value29 of the scheme property is or may be invested in transferable securities or approved money-market instruments issued or guaranteed by a single state, local authority or public international body29; and

29(ii)

the names of the individual states, local authorities or public international bodies issuing or guaranteeing the securities in which29 more than 35% in value of the scheme property may be invested29;

(k)

for an authorised fund which may invest in other schemes, the extent to which the scheme property may be invested in the units of schemes which are managed by the authorised fund manager or by its associate;

14

(ka)

where a scheme is a feeder scheme (other than a feeder UCITS or a feeder NURS)18,16 which (in respect of investment in units in collective investment schemes) is dedicated to units in a single collective investment scheme, details of the master scheme and the minimum (and, if relevant, maximum) investment that the feeder scheme may make in it;

(l)

where a scheme invests principally in scheme units, deposits or derivatives, or replicates an index in accordance with COLL 5.2.31 R or COLL 5.6.23 R (Schemes replicating an index), a prominent statement regarding this investment policy;

(m)

where derivatives transactions may be used in a scheme, a prominent statement as to whether these transactions are for the purposes of efficient portfolio management (including10hedging)10 or meeting the investment objectives or both and the possible outcome of the use of derivatives on the risk profile of the scheme;

(n)

information concerning the profile of the typical investor for whom the scheme is designed;

(o)

information concerning the historical performance of the scheme, comparing in particular its historical performance against each target benchmark and each constraining benchmark used in relation to the scheme,33 presented in accordance with COBS 4.6.2R (the rules on past performance);

(p)

for a non-UCITS retail scheme which invests in immovables, a statement of the countries or territories of situation of land or buildings in which the authorised fund may invest;

34(pa)

for a fund investing in inherently illiquid assets at least the following (see FUND 3.2.2R(8) (Prior disclosure of information to investors)):

(i)

an explanation of the risks associated with the scheme investing in inherently illiquid assets and how those risks might crystallise;

(ii)

a description of the tools and arrangements the authorised fund manager would propose using, including those required by FCA rules, to mitigate the risks referred to in (i); and

(iii)

an explanation of the circumstances in which those tools and arrangements would typically be deployed and the likely consequences for investors;

(q)

for a UCITS scheme which invests a substantial portion of its assets in other schemes, a statement of the maximum level of management fees that may be charged to that UCITS scheme and to the schemes in which it invests;

5(qa)

where the authorised fund is a qualifying money market fund, 31a statement identifying it as such a fund 15and a statement that the authorised fund's investment objectives and policies will meet the conditions specified in the definition of qualifying money market fund31;

(r)

where the net asset value of a UCITS scheme is likely to have high volatility owing to its portfolio composition or the portfolio management techniques that may be used, a prominent statement to that effect;

(s)

for a UCITS scheme, a statement that any unitholder may obtain on request the types of information (which must be listed) referred to in COLL 4.2.3R (3) (Availability of prospectus and long report); and16

16(t)

for a UCITS scheme that is or is intended to be a master UCITS, a statement that it is not a feeder UCITS and will not hold units of a feeder UCITS.

Reporting, distributions and accounting dates

4

Relevant details of the reporting, accounting and distribution information which includes:

(a)

the accounting and distribution dates;

(b)

procedures for:

(i)

determining and applying income (including how any distributable income is paid);

(ii)

unclaimed distributions; and

(iii)

if relevant, calculating, paying and accounting for income equalisation; and27

(c)

the accounting reference date and when the long report will be published in accordance with COLL 4.5.14 R (Publication and availability of annual and half-yearly long report).27

(d)

[deleted]27

Characteristics of the units

5

Information as to:

(a)

where there is more than one class of unit in issue or available for issue, the name of each such class and the rights attached to each class in so far as they vary from the rights attached to other classes;

(b)

[deleted]35

(c)

how unitholders may exercise their voting rights and what these amount to;

(d)

where a mandatory redemption, cancellation or conversion of units from one class to another may be required, in what circumstances it may be required; and

(e)

for an AUT, the fact that the nature of the right represented by units is that of a beneficial interest under a trust.

215A

ACSs: UCITS and NURS eligible investors

(a)

A statement that units may not be issued to a person other than a:

(i)

professional ACS investor; or

(ii)

large ACS investor; or

(iii)

person who already holds units in the scheme.

(b)

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 5A(a).

215B

ACSs: UCITS and NURS transfer of units

(a)

A statement whether the transfer of units in the ACSscheme is either:

(i)

prohibited; or

(ii)

allowed;

by the instrument constituting the fund23 and prospectus.

(b)

Where transfer of units is allowed by the instrument constituting the fund23 and prospectus in accordance with (a)(ii), a statement that units may only be transferred in accordance with the conditions specified by FCArules, including that units may not be transferred to a person other than a:

(i)

professional ACS investor; or

(ii)

large ACS investor; or

(iii)

person who already holds units in the scheme.

(c)

For a co-ownership scheme which is an umbrella, a statement in accordance with (5B)(a)(i) or (ii) and, where appropriate, a statement in accordance with (5B)(b), 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.

Authorised fund manager

6

The following particulars of the authorised fund manager:

(a)

its name;

(b)

the nature of its corporate form;

(c)

the date of its incorporation;

(d)

the address of its registered office;

(e)

the address of its head office, if that is different from the address of its registered office;

(f)

[deleted]32

(g)

if the duration of its corporate status is limited, when that status will or may cease; and

(h)

the amount of its issued share capital and how much of it is paid up.

Directors of an ICVC, other than the ACD

7

Other than for the ACD:

(a)

the names and positions in the ICVC of any other directors (if any); and

(b)

the manner, amount and calculation of the remuneration of such directors.

Depositary

8

The following information and 25particulars concerning 25the depositary:

(a)

its name;

(b)

the nature of its corporate form;

(c)

the address of its registered office;

(d)

the address of its head office, if that is different from the address of its registered office;

(e)

[deleted]32

(f)

a description of its duties and conflicts of interest that may arise between the depositary and:25

25(i)

the scheme; or

25(ii)

the unitholders in the scheme; or

25(iii)

the authorised fund manager;

25(g)

(i)

a description of any safekeeping functions delegated by the depositary;

(ii)

a description of any conflicts of interest that may arise from such delegation; and

(iii)

for a UCITS scheme, a list showing the identity of each delegate and sub-delegate; and

25(h)

for a UCITS scheme, a statement that up-to-date information regarding the points covered under (a),(f) and (g), above, will be made available to unitholders on request.

Investment adviser

9

If an investment adviser is retained in connection with the business of an authorised fund:

(a)

its name; and

(b)

where it carries on a significant activity other than providing services to the authorised fund as an investment adviser, what that significant activity is.

Auditor

10

The name of the auditor of the authorised fund.

Contracts and other relationships with parties

11

The following relevant details:

(a)

for an ICVC:

(i)

a summary of the material provisions of the contract between the ICVC and the ACD3 which may be relevant to unitholders including provisions (if any) relating to remuneration, termination, compensation on termination and indemnity;

(ii)

the main business activities of each of the directors (other than those connected with the business of the ICVC) where these are of significance to the ICVC's business;

(iii)

if any director is a body corporate in a group of which any other corporate director of the ICVC is a member, a statement of that fact;

(iv)

the main terms of each contract of service between the ICVC and a director in summary form; and3

3(v)

for an ICVC that does not hold annual general meetings, a statement that copies of contracts of service between the ICVC and its directors, including the ACD, will be provided to a unitholder on request;

(b)

the names of the directors of the authorised fund manager and the main business activities of each of the directors (other than those connected with the business of the authorised fund) where these are of significance to the authorised fund's business;

(c)

a summary of the material provisions of the contract between the ICVC or the manager of the AUT and the depositary which may be relevant to unitholders, including provisions relating to the remuneration of the depositary;

21(ca)

in the case of an ACS, a summary of the material provisions of the contracts between:

(i)

the authorised fund manager and the nominated partner (if any); and

(ii)

the authorised fund manager and depositary;

which may be relevant to unitholders, including provisions relating to the remuneration of the depositary;

(d)

if an investment adviser retained in connection with the business of the authorised fund is a body corporate in a group of which any director of the ICVC or the authorised fund manager21 of the AUTor ACS21 is a member, that fact;

(e)

a summary of the material provisions of any contract between the authorised fund manager or the ICVC and any investment adviser which may be relevant to unitholders;

(f)

if an investment adviser retained in connection with the business of the authorised fund has the authority of the authorised fund manager or the ICVC to make decisions on behalf of the authorised fund manager or the ICVC, that fact and a description of the matters in relation to which it has that authority;

(g)

a list of:16

16(i)

the functions which the authorised fund manager has delegated in accordance with FCA rules32; and

16(ii)

the person to whom such functions have been delegated; and

(h)

in what capacity (if any), the authorised fund manager acts in relation to any other regulated collective investment schemes2 and the name of such schemes.

Register of Unitholders

12

Details of:

(a)

the address in the United Kingdom where the register of unitholders, and where relevant the plan register is kept and can be inspected by unitholders; and

(b)

the registrar's name and address.

Payments out of scheme property

13

In relation to each type of payment from the scheme property, details of:

(a)

who the payment is made to;

(b)

what the payment is for;

(c)

the rate or amount where available;

(d)

how it will be calculated and accrued;

(e)

when it will be paid;

(f)

where a performance fee is taken, examples of its operation in plain English and the maximum it can amount to37; and

37(g)

37where donations are to be made to one or more registered charities for Sharia compliance purposes from the income property of the scheme (in this rule, ‘purification’), in addition to the details required above, the person who advises the authorised fund manager on the required percentage of the income property recognised for purification.

Allocation of payments

14

If, in accordance with COLL 6.7.10 R4 (Allocation of payments to income or capital), the authorised fund manager and the depositary have agreed that all or part of any income expense payments may be treated as a capital expense:

(a)

that fact;

(b)

the policy for allocation of these payments; and

(c)

a statement that this policy may result in capital erosion or constrain capital growth.

Moveable and immovable property (ICVC only)

15

An estimate of any expenses likely to be incurred by the ICVC in respect of movable and immovable property in which the ICVC has an interest.

Valuation and pricing of scheme property

16

In relation to the valuation of scheme property and pricing of units1:

(a)

either:1

(i)

in the case of a single-priced authorised fund,1 a provision that there must be only a single price for any unit as determined from time to time by reference to a particular valuation point; or1

(ii)

1in the case of a dual-priced authorised fund, the authorised fund manager's policy for determining prices for the sale and redemption of units by reference to a particular valuation point and an explanation of how those prices may differ;

(b)

details of:

(i)

how the value of the scheme property is to be determined in relation to each purpose for which the scheme property must be valued;

(ii)

how frequently and at what time or times of the day the scheme property will be regularly valued for dealing purposes and a description of any circumstance in which the scheme property may be specially valued;

(iii)

where relevant, how the price of units of each class will be determined for dealing purposes;

(iv)

where and at what frequency the most recent prices will be published; and

(v)

1where relevant in the case of a dual-priced authorised fund, an explanation of what is meant by large deals and 29the authorised fund manager's policy in relation to large deals; and

(c)

if provisions in (a) and (b) do not take effect when the instrument constituting the fund23 or (where appropriate) supplemental trust deed takes effect, a statement of the time from which those provisions are to take effect or how it will be determined.

Dealing

17

The following particulars:

(a)

the procedures, the dealing periods and the circumstances in which the authorised fund manager will effect:

(i)

the sale and redemption of units and the settlement of transactions (including the minimum number or value of units which one person may hold or which may be subject to any transaction of sale or redemption) for each class of unit in the authorised fund; and

(ii)

any direct issue or cancellation of units by an ICVC or by the depositary of an AUT or ACS21 (as appropriate) through the authorised fund manager in accordance with COLL 6.2.7R (2) (Issue and cancellation of units through an authorised fund manager);

(b)

the circumstances in which the redemption of units may be suspended;

(c)

whether certificates will be issued in respect of registered units;

(d)

the circumstances in which the authorised fund manager may arrange for, and the procedure for the issue or cancellation of units in specie;

(e)

the investment exchanges (if any) on which units in the scheme are listed or dealt;

(f)

the circumstances and conditions for issuing units in an authorised fund which limit the issue of any class of units in accordance with 13COLL 6.2.18 R13 (Limited issue);

(g)

the circumstances and procedures for the limitation or deferral of redemptions in accordance with 13COLL 6.2.19 R13 (Limited redemption) or 13COLL 6.2.21 R13 (Deferred redemption);

(h)

in a prospectus available during the period of any initial offer:

(i)

the length of the initial offer period;

(ii)

the initial price of a unit, which must be in the base currency;

(iii)

the arrangements for issuing units during the initial offer, including the authorised fund manager's intentions on investing the subscriptions received during the initial offer;

(iv)

the circumstances when the initial offer will end;

(v)

whether units will be sold or issued in any other currency; and12

(vi)

any other relevant details of the initial offer12; 30

(i)

whether a unitholder may effect transfer of title to units on the authority of an electronic communication and if so the conditions that must be satisfied in order to effect a transfer; and30

30(j)

if the authorised fund manager deals as principal in units of the scheme and holds them for that purpose, a statement of its policy for doing so and, where applicable:

30(i)

a description of when the authorised fund manager may retain any profits it earns and absorb any losses it incurs for these activities; and

30(ii)

a statement of non-accountability as referred to in COLL 6.7.16G.

Dilution

18

In the case of a single-priced authorised fund, details1 of what is meant by dilution including:

(a)

a statement explaining:

(i)

that it is not possible to predict accurately whether dilution is likely to occur; and

(ii)

which of the policies the authorised fund manager is adopting under COLL 6.3.8 (1) (Dilution) together with an explanation of how this policy may affect the future growth of the authorised fund; and

(b)

if the authorised fund manager may require a dilution levy or make a dilution adjustment, a statement of:

(i)

the authorised fund manager's policy in deciding when to require a dilution levy, including what is meant by large deals and 29the authorised fund manager's policy on large deals, or when to make a dilution adjustment;

(ii)

the estimated rate or amount of any dilution levy or dilution adjustment based either on historical data or future projections; and

(iii)

the likelihood that the authorised fund manager may require a dilution levy or make a dilution adjustment and the basis (historical or projected) on which the statement is made.

SDRT provision

19

29

29

29

29

[deleted]29

Forward pricing29

20

An explanation of forward pricing29 under COLL 6.3.9 (Forward 29pricing).

Preliminary charge

21

Where relevant, a statement authorising the authorised fund manager to make a preliminary charge and specifying the basis for and current amount or rate of that charge.

Redemption charge

22

Where relevant, a statement authorising the authorised fund manager to deduct a redemption charge out of the proceeds of redemption; and if the authorised fund manager makes a redemption charge:

(a)

the current amount of that charge or if it is variable, the rate or method of calculating it;

(b)

if the amount, rate or method has been changed, that details of any previous amount, rate or method may be obtained from the authorised fund manager on request; and

(c)

how the order in which units acquired at different times by a unitholder is to be determined so far as necessary for the purposes of the imposition of the redemption charge.

9Property Authorised Investment Funds

922A

For a property authorised investment fund, a statement that:

(1)

[deleted]22

(2)

no body corporate may seek to obtain or intentionally maintain a holding of more than19 10% of the net asset value of the fund; and

(3)

in the event that the authorised fund manager reasonably considers that a body corporate holds more than 10% of the net asset value of the fund, the authorised fund manager is entitled to delay any redemption or cancellation of units if the authorised fund manager reasonably considers such action to be:

(a)

necessary in order to enable an orderly reduction of the holding to below 10%; and

(b)

in the interests of the unitholders as a whole.

General information

23

Details of:

(a)

the address at which copies of the instrument constituting the fund,23 any amending instrument and the most recent annual and half-yearly long reports may be inspected and from which copies may be obtained;

(b)

the manner in which any notice or document will be served on unitholders;

(c)

the extent to which and the circumstances in which:

(i)

the scheme is liable to pay or suffer tax on any appreciation in the value of the scheme property or on the income derived from the scheme property; and

(ii)

deductions by way of withholding tax may be made from distributions of income to unitholders and payments made to unitholders on the redemption of units;

(d)

for a UCITS scheme, any possible fees or expenses not described in paragraphs 13 to 22, distinguishing between those to be paid by a unitholder and those to be paid out of scheme property; and3

3(e)

for an ICVC, whether or not annual general meetings will be held.

Information on the umbrella

24

In the case of a scheme which is an umbrella with two or more sub-funds11, the following information:

(a)

that a unitholder is entitled to exchange units in one sub-fund for units in any other sub-fund (other than a sub-fund which has limited the issue of units);

(b)

that an exchange of units in one sub-fund for units in any other sub-fund is treated as a redemption and sale and will, for persons subject to United Kingdom taxation, be a realisation for the purposes of capital gains taxation;

(c)

that in no circumstances will a unitholder who exchanges units in one sub-fund for units in any other sub-fund be given a right by law to withdraw from or cancel the transaction;

(d)

the policy for allocating between sub-funds any assets of, or costs, charges and expenses payable out of, the scheme property which are not attributable to any particular sub-fund;

(e)

what charges, if any, may be made on exchanging units in one sub-fund for units in any other sub-fund; and11

(f)

for each sub-fund, the currency in which the scheme property allocated to it will be valued and the price of units calculated and payments made, if this currency is not the base currency of the scheme which is an umbrella.11

(g)

[deleted]11

Application of the prospectus contents to an umbrella

25

For a scheme which is an umbrella, information required must be stated:

(a)

in relation to each sub-fund where the information for any sub-fund differs from that for any other; and

(b)

for the umbrella as a whole, but only where the information is relevant to the umbrella as a whole.16

16Information on a feeder UCITS

1625A

In the case of a feeder UCITS, the following information:

(a)

a declaration that the feeder UCITS is a feeder of a particular master UCITS and as such permanently invests at least 85% in value of the scheme property in units of that master UCITS;

(b)

the investment objective and policy, including the risk profile; and whether the performance records of the feeder UCITS and the master UCITS are identical, or to what extent and for which reasons they differ, including a description of how the balance of the scheme property which is not invested in units of the master UCITS is invested in accordance with COLL 5.8.3 R (Balance of scheme property: investment restrictions on a feeder UCITS);

(c)

a brief description of the master UCITS, its organisation, its investment objective and policy, including the risk profile, and an indication of how the prospectus of the master UCITS may be obtained;

(d)

a summary of the master-feeder agreement or where applicable, the internal conduct of business rules referred to in COLL 11.3.2 R (2) (Master-feeder agreement and internal conduct of business rules);

(e)

how the unitholders may obtain further information on the master UCITS and the master-feeder agreement;

(f)

a description of all remuneration or reimbursement of costs payable by the feeder UCITS by virtue of its investment in units of the master UCITS, as well as the aggregate charges of the feeder UCITS and the master UCITS; and

(g)

a description of the tax implications of the investment into the master UCITS for the feeder UCITS.

[Note: article 63(1) of the UCITS Directive]18

18Information on a feeder NURS

1825B

In the case of a feeder NURS, the following information:

(a)

a declaration that the feeder NURS is a feeder of a particular qualifying master scheme and as such is dedicated to units in a single qualifying master scheme and the minimum (and, if relevant, maximum) investment that the feeder NURS may make in its qualifying master scheme;

(b)

the investment objective and policy of the feeder NURS, including its risk profile; and whether the performance records of the feeder NURS and the qualifying master scheme are identical, or to what extent and for which reasons they differ, including a description of how the balance of the scheme property which is not invested in units of the qualifying master scheme is invested in accordance with COLL 5.6.7 R (6A) (Spread: general);

(c)

a brief description of the qualifying master scheme, its organisation, its investment objective and policy, including the risk profile, and an indication of how the prospectus of the qualifying master scheme may be obtained;

(d)

how the unitholders may obtain further information on the qualifying master scheme;

(e)

a description of all remuneration or reimbursement of costs payable by the feeder NURS by virtue of its investment in units of the qualifying master scheme, as well as the aggregate charges of the feeder NURS and the qualifying master scheme; and

(f)

a description of the tax implications of the investment into the qualifying master scheme for the feeder NURS.

Marketing in another EEA state

26

[deleted]32

7Investment in overseas8 property through an intermediate holding vehicle

726A

7If investment in an overseas8 immovable is to be made through an intermediate holding vehicle or a series of intermediate holding vehicles, a statement disclosing the existence of that intermediate holding vehicle or series of intermediate holding vehicles and confirming that the purpose of that intermediate holding vehicle or series of intermediate holding vehicle is to enable the holding of overseas8 immovables by the scheme.

36Sustainability information

3626B

The following information, as applicable:

(a)

where a sustainability label is used in relation to a scheme, the information set out at ESG 5.3.3R and ESG 5.3.6R, in accordance with ESG 5.3.2R(1);

(b)

where a sustainability label is not used in relation to a scheme, but that scheme uses the terms in ESG 4.3.2R(2) under ESG 4.3.2R(1) in the product’s name or in a financial promotion relating to that scheme, the information required under ESG 5.3.2R(2).

Additional information

27

Any other material information which is within the knowledge of the directors of an ICVC or the authorised fund manager of an AUT or ACS, or which the directors or authorised fund manager21 would have obtained by making reasonable enquiries, including but not confined to, the following matters:

(a)

information which investors and their professional advisers would reasonably require, and reasonably expect to find in the prospectus, for the purpose of making an informed judgement about the merits of investing in the authorised fund and the extent and characteristics of the risks accepted by so participating;

(b)

a clear and easily understandable explanation of any risks which investment in the authorised fund may reasonably be regarded as presenting for reasonably prudent investors of moderate means;

(c)

if there is any arrangement intended to result in a particular capital or income return from a holding of units in the authorised fund or any investment objective of giving protection to the capital value of, or income return from, such a holding:

(i)

details of that arrangement or protection;

(ii)

for any related guarantee, sufficient details about the guarantor and the guarantee to enable a fair assessment of the value of the guarantee;

(iii)

a description of the risks that could affect achievement of that return or protection; and

(iv)

details of the arrangements by which the authorised fund manager will notify unitholders of any action required by the unitholders to obtain the benefit of the guarantee; and

(d)

whether any notice has been given to unitholders of the authorised fund manager intention to propose a change to the scheme and if so, its particulars.

Remuneration Policy

2528

For a UCITS scheme and in relation to UCITS Remuneration Code staff:

(a)

up-to-date details of the remuneration policy including, but not limited to:

(i)

a description of how remuneration and benefits are calculated; and

(ii)

the identities of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee, where such a committee exists; or

(b)

a summary of the remuneration policy and a statement that:

(i)

up-to-date details of the matters set out in (a) above are available by means of a website, including a reference to that website; and

(ii)

a paper copy of that website information will be made available free of charge upon request.