Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996
| Jurisdiction | UK Non-devolved |
| Citation | SI 1996/2827 |
| Year | 1996 |
1996 No. 2827
FINANCIAL SERVICES
The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996
Made 11th November 1996
Coming into force 6th January 1997
Whereas the Treasury are a government department designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to measures relating to open-ended collective investment schemes which have as their purpose investment in transferable securities, with the aim of spreading investment risk, of funds raised from the public;
And whereas a draft of these Regulations has been approved by a resolution of each House of Parliament pursuant to section 2(2) of, and paragraph 2(2) of Schedule 2 to, that Act;
Now therefore the Treasury in exercise of the powers conferred on them by section 2(2) of that Act and of all other powers enabling them in that behalf hereby make the following Regulations:—
PART I
GENERAL
Citation, commencement and extent
1.—(1) These Regulations may be cited as the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996.
(2) These Regulations shall come into force on 6th January 1997.
(3) Except for paragraph 7(b) of Schedule 1 to these Regulations which has effect in relation to certain collective investment schemes which have head offices in Northern Ireland, these Regulations shall have effect in relation to any investment company with variable capital which has its head office situated in Great Britain.
Interpretation
2.—(1) In these Regulations, except where the context otherwise requires—
“the 1985 Act” means the Companies Act 19853;
“the 1986 Act” means the Financial Services Act 19864;
“annual general meeting” has the meaning given in regulation 31(1) below;
“annual report” has the meaning given in regulation 60(1)(a) below;
“authorisation order” means an order made by SIB under regulation 9 below;
“bearer shares” has the meaning given in regulation 42 below;
“court”, in relation to any proceedings under these Regulations involving an investment company with variable capital the head office of which is situated in England and Wales, means the High Court and in relation to such a company the head office of which is situated in Scotland, means the Court of Session;
“depositary”, in relation to an investment company with variable capital, has the meaning given in regulation 5(1) below;
“director”, in relation to an investment company with variable capital, includes a person occupying in relation to it the position of director (by whatever name called);
“investment company with variable capital” has the meaning given in regulation 3(2) below;
“larger denomination share” has the meaning given in regulation 39(5) below;
“officer”, in relation to an investment company with variable capital, includes a director or any secretary or manager;
“participating issuer” and “participating security” have the same meaning as in the Uncertificated Securities Regulations 19955;
“prospectus” has the meaning given in regulation 6(2) below;
“register of shareholders” means the register kept under paragraph 1(1) of Schedule 4 to these Regulations;
“scheme property”, in relation to an investment company with variable capital, means the property subject to the collective investment scheme constituted by the company;
“shadow director”, in relation to an investment company with variable capital, means a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that company are accustomed to act;
“share certificate” has the meaning given in regulation 40(1) below;
“SIB” means the body known as the Securities and Investments Board6;
“SIB regulations” means any regulations made by SIB under regulation 6(1) below;
“smaller denomination share” has the meaning given in regulation 39(5) below;
“transfer documents” has the meaning given in paragraph 5(3) of Schedule 5 to these Regulations;
“transferable securities” has the same meaning as in the UCITS Directive;
“UCITS Directive” means the Council Directive co-ordinating the laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No. 85/611/EEC7);
“umbrella company” means an investment company with variable capital whose instrument of incorporation provides for such pooling as is mentioned in subsection (3)(a) of section 75 of the 1986 Act (collective investment schemes: interpretation) in relation to separate parts of the scheme property and whose shareholders are entitled to exchange rights in one part for rights in another; and
“uncertificated unit of a security” has the same meaning as in the Uncertificated Securities Regulations 1995.
(2) In these Regulations any reference to a shareholder of an investment company with variable capital is a reference to—
(a)
(a) the person who holds the share certificate, or other documentary evidence of title, mentioned in regulation 42 below; and
(b)
(b) the person whose name is entered on the company’s register of shareholders in relation to any share or shares other than a bearer share.
(3) In these Regulations, any reference to a controller shall be construed in accordance with subsection (5) of section 207 of the 1986 Act (interpretation); and any reference to a manager shall be construed in accordance with subsection (6) of that section.
(4) In these Regulations, unless the contrary intention appears, expressions which are also used in the 1985 Act or the 1986 Act have the same meanings as in that Act.
PART II
FORMATION, SUPERVISION AND CONTROL
General
Investment company with variable capital
3.—(1) If SIB makes an authorisation order then, immediately upon the coming into effect of the order, a body shall be incorporated (notwithstanding that, at the point of its incorporation by virtue of this paragraph, the body will not have any shareholders or property).
(2) Any body incorporated by virtue of paragraph (1) above shall be known as an investment company with variable capital.
(3) The name of an investment company with variable capital shall be the name mentioned in the authorisation order made in respect of the company or, if it changes its name in accordance with these Regulations and SIB regulations, by its new name.
Registration by registrar of companies
4.—(1) As soon as is reasonably practicable after the coming into effect of an authorisation order in respect of an investment company with variable capital, SIB shall send a copy of the order to—
(a)
(a) the registrar of companies for England and Wales, if the instrument of incorporation of the company states that the company’s head office is to be situated in England and Wales, or that it is to be situated in Wales; or
(b)
(b) the registrar of companies for Scotland, if the instrument of incorporation of the company states that the head office of the company is to be situated in Scotland.
(2) The registrar shall, upon receipt of the copy of the authorisation order, forthwith register—
(a)
(a) the instrument of incorporation of the company; and
(b)
(b) the details in relation to the company, its directors and its depositary which are contained in the other papers retained by him under regulation 13(3) below.
(3) A company shall not carry on any business unless its instrument of incorporation has been registered under paragraph (2) above.
(4) Schedule 1 to these Regulations (which makes provision with respect to the registration of, and the functions of the registrar of companies in relation to, investment companies with variable capital) shall have effect.
(5) In this regulation any reference to the instrument of incorporation of a company is a reference to the instrument of incorporation which was supplied for the purposes of regulation 9(1)(a) below.
Safekeeping of scheme property by depositary
5.—(1) Subject to paragraph (2) below, all the scheme property of an investment company with variable capital shall be entrusted for safekeeping to a person appointed for the purpose (“a depositary”).
(2) Nothing in paragraph (1) above—
(a)
(a) shall apply to any scheme property designated for the purposes of this regulation by SIB regulations;
(b)
(b) shall prevent a depositary from—
(i) entrusting to a third party all or some of the assets in its safekeeping; or
(ii) in a case falling within paragraph (i) above, authorising the third party to entrust all or some of those assets to other specified persons.
(3) Schedule 2 to these Regulations (which makes provision with respect to depositaries of investment companies with variable capital) shall have effect.
SIB regulations
6.—(1) SIB’s powers to make regulations under section 81 (constitution and management) and section 85 (publication of scheme particulars) of the 1986 Act8in relation to authorised unit trust schemes shall be exercisable in relation to investment companies with variable capital—
(a)
(a) for like purposes; and
(b)
(b) subject to the same conditions.
(2) In these Regulations any document complying with regulations made by SIB under paragraph (1) above for purposes of the like nature as the purposes for which power is conferred by section 85 of the 1986 Act shall be known as a prospectus.
Authorisation
Applications for authorisation
7.—(1) Any application for an authorisation order in respect of an investment company with variable capital—
(a)
(a) shall be made in such manner as SIB may direct;
(b)
(b) shall state with respect to each person named in the application as a director of the company the particulars set out in regulation 8 below;
(c)
(c)...
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