Charities Act, 1961

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Schemes to establish common investment funds.

46.—(1) The High Court or the Board may by order make and bring into effect schemes for the establishment of common investment funds (in this section referred to as schemes) upon terms which provide—

(a) for property transferred to the fund by or on behalf of a charity participating in the scheme to be invested under the control of trustees appointed to manage the fund; and

(b) for the participating charities to be entitled (subject to the provisions of the scheme) to the capital and income of the fund in shares determined by reference to the amount or value of the property transferred to it by or on behalf of each of them and to the value of the fund at the time of the transfers.

(2) The High Court or the Board may make a scheme on the application of any two or more charities: provided that, in the case of any two or more charities of which the Board are trustees, the Board may make a scheme of their own motion.

(3) A scheme may be made in terms admitting any charity to participate, or restricting the right to participate in any manner.

(4) A scheme may make provision for, and for all matters connected with, the establishment, investment, management and winding up of the common investment fund, and may in particular include provision—

(a) for remunerating persons appointed trustees to hold or manage the fund or any part of it, with or without provision authorising a person to receive the remuneration notwithstanding that he is also a charity trustee of or trustee for a participating charity;

(b) for restricting the size of the fund, and for regulating as to time, amount or otherwise the right to transfer property to or withdraw it from the fund, and for enabling sums to be advanced out of the fund by way of loan to a participating charity pending the withdrawal of property from the fund by the charity;

(c) for enabling income to be withheld from distribution with a view to avoiding fluctuations in the amounts distributed, and generally for regulating distributions of income;

(d) for enabling moneys to be borrowed temporarily for the purpose of meeting payments to be made out of the fund;

(e) for enabling questions arising under the scheme as to the right of a charity to participate, or as to the rights of participating charities, or as to any other matter, to be conclusively determined by the decision of the trustees managing the fund or in any other manner;

(f) for regulating the accounts and information to be supplied to participating charities.

(5) A scheme, in addition to the provision for property to be transferred to the fund on the basis that the charity shall be entitled to a share in the capital and income of the fund, may include provision for enabling sums to be deposited by or on behalf of a charity on the basis that (subject to the provisions of the scheme) the charity shall be entitled to repayment of the sums deposited and to interest thereon at a rate determined by or under the scheme; and where a scheme makes any such provision it shall also provide for excluding from the amount of capital and income to be shared between charities participating otherwise than by way of deposit such amounts (not exceeding the amounts properly attributable to the making of deposits) as are from time to time reasonably required in respect of the liabilities of the fund for the repayment of deposits and for the interest on deposits, including amounts required by way of reserve.

(6) Except in so far as a scheme provides to the contrary, the rights under it of a participating charity shall not be capable of being assigned or charged, nor shall any trustee or other person concerned in the management of the common investment fund established by the scheme be required or entitled to take account of any trust or other equity affecting a participating charity or its property or rights.

(7) Property held upon any charitable trust may be transferred to common investment funds established under this section unless the power to do so is excluded by a provision specifically referring to schemes in the terms of the trust.

(8) A common investment fund shall be deemed for all purposes to be a charity.

(9) The High Court may by order amend or vary the terms of, or wind up, a scheme and the Board may by order amend or vary the terms of, or wind up, a scheme made by order of the Board.