S.I. No. 211/2003 - European Communities (Undertakings For Collective Investment in Transferable Securities) Regulations 2003

ARRANGEMENT OF REGULATIONS

European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003

I, Mary Harney, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving further effect to Council Directive No. 85/611/EEC of 20 December 1985¹ , as amended by Council Directive No. 88/220/EEC of 22 March 1988² and Directive No. 95/26/EC of the Council and of the European Parliament of 29 June 1995³ hereby make the following regulations:

PART I

PRELIMINARY

Citation.

1.         These Regulations may be cited as the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003.

Interpretation.

2.         (1)       In these Regulations:

“articles” in relation to a company has the meaning assigned to it by the Companies Act 1963 ;

“Bank” means the Central Bank and Financial Services Authority of Ireland;

“Companies Acts” means the Companies Act 1963 and every enactment which is to be construed with it as one Act;

“common contractual fund” means a collective investment undertaking being an unincorporated body established by a management company under which the participants by contractual arrangement participate and share in the property of the collective investment undertaking as co-owners;

“competent authority” means the Bank or, in the case of another Member State, the body or bodies designated by that State to act as a competent authority for the purposes of the Directive;

“credit institution” means a credit institution within the meaning of Council Directives 77/780/EEC⁴ and 89/646/EEC⁵ ;

“the court” unless otherwise specified means the High Court;

“the Directive” means the Council Directive of 20 December 1985 (85/611/EEC) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as amended by Council Directive of 22 March 1988 (88/220/EEC) and Directive No. 95/26/EC of the Council and of the European Parliament of 29 June 1995;

“directors” means those persons who, under the Companies Acts or the trust deed or the deed of constitution or the memorandum and articles of association, represent the management company, the investment company or the trustee, or who effectively determine the policy of the management company, the investment company or the trustee;

“issue” means the sale of units or shares by a management company or investment company;

“investment company with fixed capital” means a company so referred to in Regulation 3(3);

“investment company with variable capital” means a company so referred to in Regulation 3(3);

“Member State” means a Member State of the European Community;

“repurchase” means the purchase of shares by a management company or investment company;

“redemption” means the purchase of units or shares from a holder by a management company or investment company;

“transferable securities” means securities in respect of which the right of transfer is unrestricted;

“trustee” in relation to a UCITS means an institution referred to as a depository in the Directive;

“umbrella fund” means a UCITS which is divided into a number of sub-funds;

“undertaking for collective investment in transferable securities” or “UCITS” has the meaning assigned to it by Regulation 3(2);

“unit” includes a share and any other instrument granting an entitlement to share in the investments or relevant income of a collective investment undertaking;

“unit-holder” means, in relation to a collective investment undertaking any person who by reason of the holding of units in the undertaking or by reason of having invested capital in the undertaking is entitled to any of the investments or relevant income of the undertaking;

“unit trust” means a collective investment undertaking under which the property in question is held on trust for the participants;

“usual time limits” means those time limits which are acceptable market practice in the context of a particular transaction.

(2)       In these Regulations, except where the context otherwise requires—

(i)         words and expressions which are also used in the Directive have the same meaning as in the Directive;

(ii)        a reference to any other enactment, EC Directive or Regulation shall be construed as a reference to that enactment, EC Directive or Regulation as amended by any other enactment, EC Directive or Regulation.

PART II

SCOPE

Scope.

3.         (1)       Subject to paragraph (5), these Regulations apply to undertakings for collective investment in transferable securities (hereafter in these Regulations referred to as UCITS) situated in the State within the meaning of Regulation 9(1). Part X of these Regulations also applies to UCITS situated in another Member State within the meaning of Regulation 9(2) which propose to market units in the State.

(2)       For the purposes of these Regulations and subject to paragraph (5), UCITS shall be undertakings—

(a)       the sole object of which is the collective investment in transferable securities of capital raised from the public and which operate on the principle of risk-spreading;

and

(b)       the units of which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings' assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not vary significantly from their net asset value shall be regarded as equivalent to such repurchase or redemption.

(3)       Such undertakings may be constituted as—

(a)       unit trusts, or

(b)       investment companies with fixed capital, or

(c)       investment companies with variable capital whose articles provide that—

(i)        the amount of the paid up share capital of the company shall at all times be equal to the net asset value of the company, and

(ii)       the shares of the company shall have no par value,

or

(d)       common contractual funds,

provided however that in the cases of (b) and (c) above the companies must be registered as public limited companies.

(4)       These Regulations do not apply to investment companies whose assets are invested through the intermediary of subsidiary companies wholly or mainly otherwise than in transferable securities.

(5)       These Regulations do not apply to—

(a)       UCITS of the closed-ended type;

(b)       UCITS which raise capital without promoting the sale of their units to the public within the Community or any part of it;

(c)       UCITS the units of which, under the trust deed, the deed of constitution or the investment company's articles, may be sold only to the public in non-member countries.

Restriction of Unit Trusts Act 1990.

4.         The provisions of the Unit Trusts Act 1990 shall not apply to undertakings for collective investment in transferable securities authorised under these Regulations or authorised by a competent authority in another Member State in accordance with the Directive.

Prohibition on conversion of UCITS into undertaking not subject to Directive.

5.         (1)       A UCITS which is subject to these Regulations shall not convert itself into a collective investment undertaking which would not be subject to the Directive and any purported conversion shall be null and void.

(2)       A UCITS which is subject to these Regulations and which proposes to convert itself into a collective investment undertaking which would be subject to the Directive shall comply with such conditions as the Bank may consider prudent to specify in relation to the conversion, for the purposes and in the interest of the orderly and proper regulation of UCITS in accordance with these Regulations.

PART III

COMPETENT AUTHORITY

Bank to be competent authority.

6.         (1)       The Bank is designated as a competent authority to carry out the duties provided for in the Directive and has all the powers necessary for that purpose.

(2)       The Bank may arrange for its functions as a competent authority to be performed by any constituent part of the Bank or by any officer or employee of the Bank. Nothing in these Regulations precludes the Bank from being assisted in, or advised on, the discharge of those functions by any such constituent part, officer or employee.

Liability of Bank.

7.         The authorisation of a UCITS by the Bank shall not constitute a warranty as to the performance of a UCITS and the Bank shall not be liable for the performance or default of a UCITS.

Publication of names of authorised UCITS.

8.         (1)       The Bank shall, within twenty-one days after the date of the authorisation of a UCITS, publish a notice to that effect in Iris Oifigiúil.

(2)       The Bank shall publish from time to time, but not less frequently than once a year, in such manner as it thinks fit, the names of all UCITS which have been authorised by it and whose authorisation has not been revoked.

PART IV

AUTHORISATION OF UCITS

Situation of UCITS.

9.         (1)       For the purposes of these Regulations, a UCITS shall be deemed to be situated in the State if the investment company or the management company of a unit trust or of a common contractual fund, hereinafter known as the management company, has its head office and its registered office in the State.

(2)       A UCITS not situated in the State shall be deemed, for the purposes of these Regulations, to be situated in the Member State in which the investment company or the management company has its registered office.

Prohibition on UCITS carrying on activities in the State without authorisation.

10.       (1)       Subject to Regulation 11 and to paragraph (2) of this Regulation, a UCITS to which these Regulations apply shall not carry on activities as such in the State unless it has been authorised under these Regulations by the Bank.

(2)       A UCITS which is situated in another Member State and which has received authorisation from the competent authorities in that State pursuant to the Directive may market its units in the State provided it is in compliance with the provisions laid down in Part X of these Regulations.

Requirements for authorisation.

11.       (1)       A unit trust shall be authorised only if the Bank has approved the management company, the trust deed, the name of the unit trust and the choice of trustee. An investment company shall be authorised only if the Bank has approved its memorandum and articles, the name of the investment company and its choice of depositary, hereafter in these Regulations known as the trustee. A common contractual fund shall be authorised only if the Bank has approved the management company, the deed of constitution, the name of the common contractual fund and the choice of depositary, hereinafter known as the trustee.

(2)       The Bank shall not authorise a UCITS if the directors of the management company or of the investment company or of the trustee are not of sufficiently good repute or lack the experience required for the performance of their duties. Appointments to the office of director of the management company or of the investment company must be approved by the Bank.

Approval of Bank necessary for subsequent changes.

12.       Neither the management company nor the trustee may be replaced, nor may the trust deed, the deed of constitution or the investment company's articles be amended, without the approval of the Bank.

Applications for authorisation.

13.       An application for authorisation shall be made in writing by the management company or the investment company and shall contain such information including additional information, as the Bank may reasonably specify for the purpose of determining the application.

Refusal of authorisation and right of appeal.

14.       (1)       Whenever the Bank decides to refuse authorisation it must notify the company of its decision and of the reasons therefor. The company may apply to the court in accordance with Regulation 105.

(2)       The company shall have the same right to apply to the court as in paragraph (1) if a decision on authorisation has not been taken by the Bank within 6 months of the submission of an application for authorisation which includes the information, other than additional information, required under these Regulations.

Right of appeal of UCITS situated in another Member State.

15.       The right of application under Regulation 105 shall apply to an authorised UCITS situated in another Member State in respect of a decision by the Bank to refuse it permission to market its units in the State or to prohibit further marketing in the State.

PART V

UNIT TRUSTS AND COMMON CONTRACTUAL FUNDS

Management company.

16.       A management company shall be a body corporate that has its registered office and its head office in the State. It must have, in the opinion of the Bank, sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities.

Prohibition on management company engaging in other activities.

17.       A management company may not engage in activities other than the management of unit trusts, common contractual funds and investment companies and such ancillary activities as would enable it to administer its own assets.

Assets of a unit trust or common contractual fund.

18.       (1)       The assets of a unit trust and the assets of a common contractual fund shall be entrusted to a trustee for safe-keeping in accordance with these Regulations.

(2)       A trustee's liability as referred to in Regulation 21 shall not be affected by the fact that it has entrusted to a third party some or all of the assets in its safe-keeping.

Trustee.

19.       (1)       A trustee shall either have its registered office in the State or have established a place of business in the State if its registered office is in another Member State.

(2)       A trustee shall—

(a)        be a credit institution authorised in the State with paid-up share capital which is not less than the limit specified in the Bank's Licensing Requirements, or

(b)        be a branch, established in the State, of a credit institution with a paid-up share capital which is not less than the limit specified in the Bank's Licensing Requirements, or

(c)        be a company incorporated in the State which—

(i)        is wholly owned by a credit institution, provided the liabilities of the trustee are guaranteed by the said credit institution and the said credit institution has a paid-up share capital which is not less than the limit specified in the Bank's Licensing Requirements, or

(ii)       is wholly owned by an institution in a non-Member State which is deemed by the Bank to be the equivalent of a credit institution, provided the liabilities of the trustee are guaranteed by the said institution and that institution has a paid-up share capital which is not less than the limit specified in the Bank's Licensing Requirements, or

(iii)      is wholly owned by an institution or company either in a Member State or in a non-Member State which is deemed by the Bank to be an institution or company which provides unit-holders with protection equivalent to that provided by a trustee under Regulation 19(2)(a), (b), (c)(i) or (c)(ii) and provided the liabilities of the company acting as trustee are guaranteed by the said institution or company and that institution or company has a paid-up share capital which is not less than the limit specified in the Bank's Licensing Requirements.

(3)       A trustee shall satisfy the Bank that it has the appropriate expertise and experience to carry out its functions under these Regulations.

(4)       In this Regulation, the Bank's Licensing Requirements means the Bank's Licensing and Supervision Requirements and Standards for Credit Institutions as issued by the Bank from time to time.

Obligations of trustee.

20.       The trustee must—

(a)      ensure that the sale, issue, repurchase, redemption and cancellation of units effected on behalf of a unit trust, common contractual fund or by a management company are carried out in accordance with these Regulations and the trust deed or the deed of constitution, as the case may be;

(b)     ensure that the value of units is calculated in accordance with these Regulations and the trust deed in the case of a unit trust or the deed of constitution in the case of a common contractual fund;

(c)     carry out the instructions of the management company unless they conflict with these Regulations or the trust deed in the case of a unit trust or the deed of constitution in the case of a common contractual fund;

(d)     ensure that in transactions involving the assets of a unit trust or of a common contractual fund any consideration is remitted to it within the usual time limits;

(e)      ensure that the income of a unit trust or of a common contractual fund is applied in accordance with these Regulations and, as the case may be, the trust deed or the deed of constitution;

(f)      enquire into the conduct of the management company in the management of the unit trust or common contractual fund, as the case may be, in each annual accounting period and report thereon to the unit-holders. The trustee's report shall be delivered to the management company in good time to enable it to include a copy of the report in the Annual Report required under Regulation 77. The report shall state whether in the trustee's opinion the management has managed the unit trust or the common contractual fund, as the case may be, in that period—

(i)        in accordance with the limitations imposed on the investment and borrowing powers of the manager and trustee by the trust deed or deed of constitution, as appropriate, and these Regulations, and

(ii)       otherwise in accordance with the provisions of the trust deed or deed of constitution, as the case may be, and these Regulations,

and if it has not done so, in what respects it has not done so and the steps which the trustee has taken in respect thereof.

Liability of trustee.

21.      The trustee shall be liable to the management company and the unit-holders for any loss suffered by them as a result of its unjustifiable failure to perform its obligations or its improper performance of them. Liability to unit-holders may be invoked either directly or indirectly through the management company, depending on the legal nature of the relationship between the trustee, the management company and the unit-holders.

Prohibition on a single company acting as management company and trustee.

22.       No single company shall act as both management company and trustee in respect of the same UCITS and in the context of their respective roles the management company and the trustee must act independently and solely in the interest of the unit-holders.

Ownership of assets of UCITS established as unit trust or common contractual fund and liability of unit-holders.

23.       (1)       The assets of a UCITS established as either a unit trust or common contractual fund shall belong exclusively to the UCITS. The assets shall be segregated from the assets of either the trustee or its agents or both and shall not be used to discharge directly or indirectly liabilities or claims against any other undertaking or entity and shall not be available for any such purpose.

(2)       Where a UCITS established as either a unit trust or common contractual fund is constituted as an umbrella fund the assets shall belong exclusively to the relevant sub-fund and shall not be used to discharge directly or indirectly the liabilities of or claims against any other sub-fund and shall not be available for any such purpose.

(3)       The liabilities of a unit-holder shall be limited to the amount agreed to be contributed by him or her for the subscription of units. The provisions of the trust deed or the deed of constitution shall be binding on the unit-holders and all persons claiming through the unit-holders as if such persons had been party to the trust deed or to the deed of constitution, as the case may be.

PART VI

INVESTMENT COMPANIES

Chapter 1

Investment companies with fixed capital

Application of Chapter 1.

24.       This chapter applies to an investment company with fixed capital authorised under these Regulations.

Share capital.

25.       Notwithstanding section 5 of the Companies (Amendment) Act 1983 , a company to which this chapter applies shall have paid up share capital which, in the opinion of the Bank, is sufficient to enable it to conduct its business effectively and to meet its liabilities.

Name.

26.       A company to which this chapter applies shall include the words “investment company” or “cuideachta infheistíochta” on all its deeds, announcements, publications, letters and other documents.

Issue of redeemable preference shares.

27.       (1)       Subject to the provisions of this chapter, a company to which this chapter applies may, if so authorised by its articles, issue redeemable preference shares which are liable at the option of the shareholder to be redeemed and redeem them accordingly.

(2)       The issue and redemption of shares by a company pursuant to paragraph (1) shall be subject to the following conditions—

(a)       no redeemable shares shall be redeemed unless they are fully paid;

(b)       no such shares shall be redeemed except out of profits available for distribution or out of the proceeds of a fresh issue of shares made for the purposes of redemption; and

(c)       the premium, if any, payable on redemption must have been provided for out of the profits of the company or out of the company's share premium account before the shares are redeemed.

(3)       Shares redeemed under this Regulation shall be treated as cancelled on redemption and the amount of the company's issued share capital shall be reduced by the nominal value of those shares accordingly but no such cancellation shall be taken as reducing the amount of the company's authorised share capital.

(4)       Where redeemable shares are—

(a)       redeemed wholly out of profits available for distribution, or

(b)       redeemed wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds is less than the aggregate nominal value of the shares redeemed (“the aggregable difference”)

then a sum equal to, in the case of sub-paragraph (a) of this paragraph, the nominal amount of the shares redeemed and, in the case of sub-paragraph (b) of this paragraph, the aggregable difference, shall be transferred to a reserve fund (“the capital redemption reserve fund”) and the provisions of the Companies Acts relating to the reduction of the share capital of a company shall, except as provided in this chapter, apply as if the capital redemption reserve fund were paid-up share capital of the company.

(5)       Subject to the provisions of this Regulation and of Regulation 59, the redemption of shares may be effected on such terms and in such manner as may be provided by the articles of the company.

Restriction of Companies Acts.

28.       The following provisions of the Companies Acts shall, in so far as the redemption of shares is made in accordance with these Regulations, not apply to a company to which this chapter applies—

(a)       the Companies Act 1963 —

section 53 (minimum subscription and amount payable on application);

section 56 (applications for, and allotment of, shares and debentures);

section 58 (return as to allotments);

section 60 (giving of financial assistance by a company for the purchase of its shares);

section 69 (notice to registrar of certain alterations in share capital);

section 70 (notice of increase in share capital);

section 72 (power of company to reduce its share capital);

section 119 (inspection of register and index);

section 125 (annual return to be made by a company having a share capital);

(b)       the Companies (Amendment) Act 1983 —

section 5(2) (minimum amount of share capital);

section 6 (restriction on the commencement of business by a public limited company);

section 19 (meaning of “authorised minimum”);

sections 20(3) and 20(4) (duration of authority to allot securities);

section 22 (document containing offer to state whether shares will be allotted where issue not fully subscribed);

sections 23 to 25 (pre-emption rights);

sections 30 to 33 (experts' reports on non-cash consideration before allotment of shares);

section 40 (obligation to convene extraordinary general meeting in event of serious loss of capital);

section 41(1) (restriction on company acquiring its own shares);

Part IV (restrictions on distribution of profits and assets);

(c)       the Companies (Amendment) Act 1986 —

section 14 (information to be included in directors' report regarding acquisition by company of own shares);

(d)       the Companies Act 1990 —

chapters 2 to 4 of Part IV;

section 140 (company may be required to contribute to debt of related company, whether as regards a case in which the investment company is being wound up or a case in which it is a related company within the meaning of that section);

Part XI.

Chapter 2

Investment Companies with Variable capital

Application of Chapter 2.

29.       This chapter applies to an investment company with variable capital authorised under these Regulations.

Share capital.

30.       Notwithstanding Section 5 of the Companies (Amendment) Act 1983 , a company to which this chapter applies must have paid up share capital which, in the opinion of the Bank, will be sufficient to enable it to conduct its business effectively and meet its liabilities.

Name.

31.       A company to which this section applies shall include the words “investment company with variable capital” or “cuideachta infheistíochta le caipiteal athraitheach” on all its deeds, announcements, publications, letters and other documents.

Enabling provision regarding purchase of own shares.

32.       (1)       Subject to the provisions of this chapter, a company may, if so authorised by its articles, repurchase its own shares provided that no such shares shall be repurchased unless they are fully paid.

(2)       Subject to the provisions of this chapter, the repurchase of shares may be effected on such terms and in such a manner as may be provided for by the articles of the company.

Repurchase of shares at request of shareholder and treatment of repurchased shares.

33.       (1)       Subject to the provisions of this Regulation and of Regulation 59, a company shall, if requested to do so by a shareholder, repurchase such of the shareholder's shares as may be requested by the shareholder.

(2)       Shares which have been repurchased under Regulation 32 shall be treated as cancelled and the amount of the company's issued share capital shall be reduced accordingly.

Legal reserve.

34.       For the avoidance of doubt, nothing in the Companies Acts or in these Regulations shall require a company to which this chapter applies to create a legal reserve.

Restriction of Companies Acts.

35.       (1)       The following provisions of the Companies Acts shall not apply to a company to which this chapter applies—

(a)       the Companies Act 1963 —

Section 53 (minimum subscription and amount payable on application);

section 56 (applications for, and allotment of, shares and debentures);

section 58 (return as to allotments);

section 60 (giving of financial assistance by a company for the purchase of its shares);

section 69 (notice to registrar of certain alterations in share capital);

section 70 (notice of increase in share capital);

section 72 (power of company to reduce its share capital);

section 119 (inspection of register and index);

section 125 (annual return to be made by a company having a share capital);

(b)       the Companies (Amendment) Act 1983 —

section 5(2) (minimum amount of share capital);

section 6 (restriction on the commencement of business by a public limited company);

section 19 (meaning of “authorised minimum”);

sections 20(3) and 20(4) (duration of authority to allot securities);

section 22 (document containing offer to state whether shares will be allotted where issue not fully subscribed);

sections 23 to 25 (pre-emption rights);

sections 30 to 33 (experts' reports on non-cash consideration before allotment of shares);

section 40 (obligation to convene extraordinary general meeting in event of serious loss of capital);

section 41 (restriction on company acquiring its own shares);

Part IV (Restrictions on distribution of profits and assets);

(c)       the Companies (Amendment) Act 1986 —

section 14 (information to be included on directors' report regarding acquisition by company of own shares);

(d)       the Companies Act 1990 —

chapters 2 to 4 of Part IV;

section 140 (company may be required to contribute to debt of related company, whether as regards a case in which the investment company is being wound up or a case in which it is a related company within the meaning of that section);

Part XI.

(2)        Section 6 (4)(a) of the Companies Act 1963 , shall have effect in relation to a company to which this chapter applies as if the words “and the division thereof into shares of a fixed amount” were omitted.

Chapter 3

General

Modification of Companies Act 1963.

36.        Sections 5 (1), 36 , 213 (d) and 215 (a)(i) of the Companies Act 1963 shall apply in relation to a company to which chapter 1 or 2 of Part VI applies as if such a company were a private company.

Chapter 4

Trustee

Assets of investment companies.

37.       (1)       The assets of an investment company shall be entrusted to a trustee for safe-keeping in accordance with these Regulations.

(2)       A trustee's liability as referred to in Regulation 43 shall not be affected by the fact that it has entrusted to a third party some or all of the assets in its safekeeping.

(3)       The assets of an investment company shall belong exclusively to the investment company. The assets shall be segregated from the assets of either the trustee or its agents or both and shall not be used to discharge directly or indirectly liabilities or claims against any other undertaking or entity and shall not be available for any such purpose.

Trustee.

38.       The provisions of Regulation 19 in relation to a trustee of a unit trust or a common contractual fund shall also be applicable to a trustee in this chapter.

Obligations of trustee.

39.       The Trustee must—

(a)     ensure that the sale, issue, repurchase, redemption and cancellation of shares effected by or on behalf of a company are carried out in accordance with these Regulations and with the company's memorandum and articles;

(b)     ensure that in transactions involving a company's assets any consideration is remitted to it within the usual time limits;

(c)     ensure that a company's income is applied in accordance with these Regulations and with its memorandum and articles; and

(d)     enquire into the conduct of the investment company in each annual accounting period and report thereon to the shareholders. The trustee's report shall be delivered to the investment company in good time to enable it to include a copy of the report in the Annual Report to the shareholders required under Regulation 77. The report shall state whether in the trustee's opinion the investment company has been managed in that period—

(i)       in accordance with the limitations imposed on the investment and borrowing powers of the investment company and trustee by the memorandum and articles and these Regulations, and

(ii)      otherwise in accordance with the provisions of the memorandum and articles and these Regulations

and, if it has not been so managed, in what respects it has not been so managed and the steps which the trustee has taken in respect thereof.

Exemption from requirement to have trustee.

40.       (1)       Authorised investment companies which market their shares exclusively through one or more stock exchanges on which their shares are admitted to official listing may, at the discretion of the Bank, be exempted from the requirement to have trustees within the meaning of these Regulations.

(2)       Regulations 59 to 63 and Regulation 86 shall not apply to such companies. The rules for the valuation of such companies' assets must be stated in their articles.

Further exemption.

41.       (1)       The Bank may, at its discretion, exempt authorised investment companies which market at least 80 per cent of their shares through one or more stock exchanges designated in their articles of association from the requirement to have trustees within the meaning of these Regulations provided that their shares are admitted to official listing on the stock exchanges of those Member States within the territories of which the shares are marketed and provided that any transactions which such a company may effect outside stock exchanges are effected at stock exchange prices only. A company's articles must specify the stock exchange in the country of marketing, the prices on which shall determine the prices at which that company will effect any transactions outside stock exchanges in that country.

(2)       In exercising this discretion the Bank must be satisfied that shareholders in the investment companies referred to in paragraph (1) have equivalent protection to that of shareholders of UCITS which have a trustee within the meaning of these Regulations. In particular, such investment companies and the companies referred to in Regulation 40 must—

(a)       state in their articles the methods of calculation of the net asset value of their shares;

(b)       intervene on the market to prevent the stock exchange value of their shares from deviating by more than 5 per cent from their net asset value; and

(c)       establish the net asset values of their shares and communicate them to the Bank at least twice a week and publish them at least twice a month.

(3)       At least twice a month, an independent auditor, being a person empowered to audit accounts in accordance with the Companies Acts, must ensure that the calculation of the value of the shares is effected in accordance with the investment company's articles. On such occasions, the auditor must ensure that the company's assets are invested in accordance with the provisions in these Regulations and in the company's articles.

Requirement on Bank to inform EC Commission regarding exemptions.

42.       The Bank shall inform the Commission of the identities of the companies benefiting from the exemptions provided for in Regulations 40 and 41.

Liability of trustee.

43.       The trustee shall be liable to the investment company and the unit-holders for any loss suffered by them as a result of its unjustifiable failure to perform its obligations, or its improper performance of them.

Prohibition on a single company acting as investment company and trustee.

44.       (1)       No single company shall act as both investment company and trustee in respect of the same UCITS.

(2)       In carrying out its role as trustee, the trustee must act solely in the interests of the unit-holders.

PART VII

INVESTMENT POLICIES OF UCITS

Permitted investments.

45.       The investments of a UCITS must consist solely of any one or more of the following—

(a)      transferable securities admitted to official listing on a stock exchange in a Member State;

(b)      transferable securities dealt in on another regulated market in a Member State which operates regularly and is recognised and open to the public;

(c)      transferable securities admitted to official listing on a stock exchange in a non-Member State or dealt in on another regulated market in a non-Member State which operates regularly and is recognised and open to the public provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed, the deed of constitution or in the investment company's articles; and

(d)      recently issued transferable securities, provided—

(i)       the terms of issue include an undertaking that application will be made for admission to official listing on a stock exchange or to another regulated market which operates regularly and is recognised and open to the public, provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed, the deed of constitution or in the investment company's articles; and

(ii)     such admission is secured within a year of issue.

Limitations on investments.

46.       (1)       A UCITS may invest no more than 10 per cent of its assets in transferable securities other than those referred to in Regulation 45.

(2)       (a) A UCITS may invest no more than 10 per cent of its assets in debt instruments which, for the purpose of these Regulations, shall be treated, because of their characteristics, as equivalent to transferable securities and which are, inter alia, transferable, liquid and have a value which can be accurately determined at any time or at least with the frequency stipulated in Regulation 86.

(b)       The Bank shall determine the debt instruments which, in accordance with this paragraph, it plans to treat as equivalent to transferable securities and shall, no later than the date on which these Regulations come into operation, send to the Commission a list of such debt instruments, stating the characteristics of the instruments and the reasons for treating them as equivalent to transferable securities.

(c)       The Bank shall also send to the Commission details of any amendments which it proposes making to the lists of instruments referred to above or any further instruments which it proposes treating as equivalent to transferable securities, together with its reasons for so doing.

(3)       An investment company may acquire real and personal property which is required for the purpose of its business.

(4)       A UCITS may not acquire either precious metals or certificates representing them.

(5)       For the purposes of this Regulation and of the following Regulations in this Part, ‘assets’, in relation to a UCITS, means the net assets of a UCITS.

Limit of 10 per cent of assets in other investments.

47.       The total of the investments referred to in Regulation 46(1) and (2) may not under any circumstances amount to more than 10 per cent of the assets of a UCITS.

Ancillary liquid assets and investment techniques and instruments.

48.       A UCITS may—

(i)        hold ancillary liquid assets;

(ii)        employ techniques and instruments relating to transferable securities under the conditions and within the limits laid down by the Bank provided that such techniques and instruments are used for efficient portfolio management; and

(iii)       employ techniques and instruments intended to provide protection against exchange risks in the context of the management of their assets and liabilities.

Investment in one issuer's securities.

49.       (1)       A UCITS may invest no more than 10 per cent of its assets in transferable securities issued by the same body provided that the total value of the transferable securities held by a UCITS in the issuing bodies in each of which it invests more than 5 per cent of its assets does not exceed 40 per cent of the value of its assets.

(2)       Notwithstanding paragraph (1), a UCITS may invest up to 35 per cent of its assets in transferable securities which are issued or guaranteed by a Member State, by its local authorities, by a non-Member State or by public international bodies of which one or more Member States are members.

(3)       Notwithstanding paragraphs (1) and (2), a UCITS may invest a maximum of 25 per cent of its assets in bonds issued by a credit institution which has its registered office in a Member State and is subject by law to special public supervision designed to protect bondholders. Sums deriving from the issue of these bonds must be invested, in conformity with the law, in assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in the event of failure of the issuer, would be used on a priority basis for the reimbursement of the principal and payment of the accrued interest.

(4)       When a UCITS invests more than 5 per cent of its assets in the bonds referred to in paragraph (3) and issued by one issuer, the total value of these investments may not exceed 80 per cent of the value of the assets of the UCITS.

(5)       The transferable securities referred to in paragraphs (2) and (3) shall not be taken into account for the purpose of applying the limit of 40 per cent referred to in paragraph (1) of this Regulation.

(6)       The limits provided for in paragraphs (1), (2) and (3) may not be combined.

(7)       Investments in transferable securities issued by the same body and carried out in accordance with these Regulations shall under no circumstances exceed in total 35 per cent of the assets of a UCITS.

Securities issued or guaranteed by States, local authorities or public international bodies.

50.       (1)       Provided the Bank is satisfied that unit-holders have protection equivalent to that of unit-holders in UCITS complying with the limits laid down in Regulation 49 it may authorise a UCITS to invest, in accordance with the principle of risk-spreading, up to 100 per cent of its assets in different transferable securities issued or guaranteed by any Member State, its local authorities, non-member State or public international bodies of which one or more Member States are members.

(2)       Such a UCITS shall be required to—

(a)       hold securities from at least six different issues, but securities from any one issue may not account for more than 30 per cent of its total assets;

(b)       specify in its trust deed, its deed of constitution or in its articles the names of the States, local authorities or public international bodies issuing or guaranteeing securities in which it intends to invest more than 35 per cent of its assets; and

(c)       include a prominent statement in its prospectus and any promotional literature drawing attention to the Bank's authorisation and indicating the States, local authorities and public international bodies in the securities of which it intends to invest or has invested more than 35 per cent of its assets.

Investments in other UCITS.

51.       (1)       A UCITS may not acquire the units of other collective investment undertakings of the open-ended type unless they are collective investment undertakings within the meaning of Regulation 3(2) (a) and (b).

(2)       A UCITS may invest no more than 5 per cent of its assets in the units of such collective investment undertakings.

(3)       Investment in the units of a unit trust or common contractual fund managed by the same management company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding, shall be permitted only in the case of a unit trust or common contractual fund which, in accordance with its trust deed or deed of constitution, has specialised in investment in a specific geographical area or economic sector, and provided that such investment is authorised by the Bank.

(4)       The Bank shall authorise such investment only if the unit trust or common contractual fund has announced its intention of making use of that option and that option has been expressly stated in its trust deed or deed of constitution.

(5)       A management company may not charge any fees or costs on account of transactions relating to a unit trust's or common contractual fund's units where some of a unit trust's or common contractual fund's assets are invested in the units of another unit trust or common contractual fund managed by the same management company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding.

Acquisition of securities in a linked unit trust, common contractual fund or investment company.

52.       (1)       The provisions of Regulation 51(3), (4) and (5) shall also apply where an investment company acquires units in another investment company to which it is linked within the meaning of that Regulation.

(2)       The provisions of Regulation 51(3), (4) and (5) shall also apply where an investment company acquires units of a unit trust or common contractual fund to which it is linked, or where a unit trust or common contractual fund acquires units of an investment company to which it is linked.

Acquisition of shares carrying voting rights.

53.       An investment company or a management company acting in connection with all of the unit trusts or common contractual funds which it manages and which fall within the scope of these Regulations may not acquire any shares carrying voting rights which would enable it to exercise significant influence over the management of an issuing body.

Limits in relation to non-voting shares, debt securities or units of a UCITS.

54.       (1)       A UCITS may acquire not more than—

(a)       10 per cent of the non-voting shares of any single issuing body;

(b)       10 per cent of the debt securities of any single issuing body; and

(c)       10 per cent of the units of any single UCITS to which Regulation 3(2) (a) and (b) applies.

(2)       The limits laid down in paragraph (1) (b) and (c) may be disregarded at the time of acquisition if at that time the gross amount of the debt securities or the net amount of the securities in issue cannot be calculated.

Exemptions from Regulations 53 and 54.

55.       The provisions of Regulations 53 and 54 shall not apply to—

(a)       transferable securities issued or guaranteed by a Member State or its local authorities;

(b)       transferable securities issued or guaranteed by a non-Member State;

(c)       transferable securities issued by public international bodies of which one or more Member States are members;

(d)       shares held by a UCITS in the capital of a company incorporated in a non-member State investing its assets mainly in the securities of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which the UCITS can invest in the securities of issuing bodies of that State. This derogation however, shall apply only if in its investment policy the company from the non-Member State complies with the limits laid down in Regulations 49 51, 52, 53, 54, 56, 57 and 58. Where the limits set down in Regulations 49 51 and 52 are exceeded, Regulations 56, 57 and 58 shall apply with necessary modifications; and

(e)       shares held by an investment company in the capital of subsidiary companies carrying on the business of management, advice or marketing exclusively on its behalf.

Subscription rights.

56.       A UCITS need not comply with the limits laid down in this Part when exercising subscription rights attaching to transferable securities which form part of their assets.

Derogations for recently authorised UCITS.

57.       The Bank may allow recently authorised UCITS to derogate from Regulations 49 and 50 for six months following the date of their authorisation, provided they observe the principle of risk-spreading.

Breaches of limits.

58.       If the limits in this Part are exceeded for reasons beyond the control of a UCITS or as a result of the exercise of subscription rights, the UCITS must adopt as a priority objective for its sales' transactions the remedying of that situation, taking due account of the interests of its unit-holders.

PART VIII

GENERAL PROVISIONS RELATING TO UCITS

Obligation on UCITS to redeem or repurchase units.

59.       Subject to Regulation 63(1), (2) and (3), a UCITS must redeem or repurchase units at the request of the unit-holder.

Issue of units.

60.       (1)       Units shall be issued or sold at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be increased by duties and charges.

(2)       Units may not be issued unless the equivalent of the net issue price is paid into the assets of the UCITS within the usual time limits. This shall not preclude the distribution of bonus units.

Redemption or repurchase of units.

61.       Units shall be redeemed or repurchased at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be decreased by duties and charges.

Value of assets.

62.       (1)       Unless otherwise provided for in the trust deed of a unit trust or the deed of constitution of a common contractual fund or in an investment company's articles, the value of the assets of a UCITS shall be based, in the case of securities traded on a stock exchange or on a regulated market on the last known stock exchange or market quotation unless such quotation is not representative. For securities not so quoted, and for securities which are so quoted but for which the latest quotation is not representative, the value shall be based on the probable realisation value which value shall be estimated with care and in good faith.

(2)       The assets of a UCITS may only be purchased and sold at prices which are in conformity with the criteria set out in paragraph (1).

(3)       The trust deed, the deed of constitution or the articles shall determine the frequency of the calculation of the issue and repurchase price.

Suspension of repurchase or redemption of units.

63.       (1)       Notwithstanding Regulation 59, a UCITS may in the cases and according to the procedure provided in its trust deed, deed of constitution or articles temporarily suspend the repurchase or redemption of its units. Suspension may be provided for only in exceptional cases where circumstances so require and suspension is justified having regard to the interest of the unit-holders.

(2)       The Bank may require the suspension of the repurchase or redemption of units in the interests of the unit-holder or the public.

(3)       A UCITS which acts in accordance with paragraph (1) must without delay communicate its decision to the Bank and to the competent authorities in the Member States in which it markets its units.

Creation and cancellation of units of a unit trust or common contractual fund.

64.       (1)       The trustee of a unit trust shall create or cancel units in accordance with the conditions laid down in the trust deed and on receipt of a written instruction from the management company. The trustee may refuse to create or cancel some or all of such units if it is of the opinion that it is not in the interests of participants for such units to be created or cancelled, as the case may be. The management company of a common contractual fund shall create or cancel units in accordance with the conditions laid down in the deed of constitution of the common contractual fund.

(2)       The trustee or, in the case of a common contractual fund, the management company shall not create or cancel units during any period in which redemption of units is suspended.

Issue of registered certificates or bearer securities.

65.       (1)       The management company or the investment company or the trustee shall issue registered certificates or bearer securities representing one or more portions of the UCITS which it manages, or alternatively, in accordance with the provisions of the trust deed, deed of constitution or articles, shall issue written confirmations of entry in the register of units or fractions of units without limitation as to the splitting up of units.

(2)       Rights attaching to fractions of units are exercised in proportion to the fraction of a unit held except for possible voting rights which can only be exercised by whole units.

(3)       The certificates and bearer securities shall be signed by the management company or the investment company and by the trustee.

(4)       Such signatures may be reproduced mechanically.

Replacement of management company and trustee.

66.       (1)       In relation to unit trusts, the trust deed and, in relation to common contractual funds, the deed of constitution, shall lay down the conditions for the replacement of the management company and the trustee and rules to ensure the protection of unit-holders in the event of such replacement.

(2)       In relation to investment companies, the articles shall lay down the conditions for the replacement of the trustee and rules to ensure the protection of share-holders in the event of such replacement.

Winding up of an investment company.

67.       (1)       Without prejudice to any other powers of the Bank, the following conditions are prescribed for the purpose of subparagraph (ii) of paragraph (fa) of section 213 of the Companies Act 1963 (which relates to the power of the court to wind up an investment company on the grounds that it is just and equitable to do so)—

(a)       the petition for such winding up has been presented by the trustee;

(b)       the trustee has notified the investment company of its intention to resign as such trustee and 6 or more months have elapsed since the giving of that notification without a trustee having been appointed to replace it;

(c)       the court, in considering the said petition, has regard to—

(i)         any conditions imposed under Regulation 97 in relation to the resignation from office of such a trustee and the replacement by it of another trustee, and

(ii)        whether a winding up would best serve the interests of shareholders in the company;

and

(d)       the petition for such winding up has been served on the company (if any) discharging, in relation to the investment company functions of a company referred to in conditions imposed under Regulation 97 as a “management company”.

(2)       The trustee of the investment company concerned is specified for the purpose of paragraph (g) of section 215 of the Companies Act 1963 , in so far as that paragraph applies in relation to the presentation of a petition for the winding up of an investment company on the grounds mentioned in the paragraph.

Remuneration and expenditure.

68.       (1)       The trust deed or the deed of constitution shall prescribe the remuneration and the expenditure which the management company is empowered to charge to a unit trust or a common contractual fund and the method of calculation of such remuneration.

(2)       The articles shall prescribe the nature of the cost to be borne by the company.

Application of income.

69.       The trust deed, the deed of constitution or the articles shall lay down the conditions and manner of application of income.

Borrowing.

70.       (1)       Subject to paragraphs (2) and (3) neither—

(a)       an investment company, nor

(b)       a management company or a trustee acting on behalf of a unit trust or a management company acting on behalf of a common contractual fund

may borrow money.

(2)       A UCITS may acquire foreign currency by means of a “back-to-back” loan.

(3)       A UCITS may borrow—

(a)       up to 10 per cent of its assets, in the case of an investment company, or 10 per cent of the value of the fund, in the case of a unit trust or a common contractual fund, provided that such borrowing is on a temporary basis; and

(b)       up to 10 per cent of its assets, in the case of an investment company, provided that the borrowing is to make possible the acquisition of real property required for the purpose of its business; in this case, the borrowing and the borrowing referred to in subparagraph (a) may not in total exceed 15 per cent of the borrower's assets.

(4)       For the purpose of this Regulation, ‘assets’ and ‘value of the fund’, in relation to a UCITS, means net assets of a UCITS.

Loans or guarantees.

71.       (1)       Without prejudice to Regulations 45, 46, 47 and 48 neither—

(a)       an investment company, nor

(b)       a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund,

may grant loans or act as a guarantor on behalf of third parties.

(2)       Paragraph (1) shall not prevent such undertakings from acquiring transferable securities which are not fully paid.

Short Sales.

72.       Neither—

(a)       an investment company, nor

(b)       a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund

may carry out sales of transferable securities when such securities are not in the ownership of the investment company or the unit trust or the common contractual fund respectively.

Umbrella funds.

73.       Where a UCITS is constituted as an umbrella fund, each sub-fund of the UCITS must comply with the regulations and conditions governing UCITS.

PART IX

PROSPECTUS, REPORTS AND PUBLICATION OF OTHER INFORMATION

Publication of prospectus.

74.       (1)       An investment company and, for each of the trusts or common contractual funds it manages, a management company must publish a prospectus which must be dated and the essential elements of which must be kept up to date.

(2)       A prospectus issued by a management company or investment company shall include the information necessary for investors to be able to make an informed judgement of the investment proposed to them and shall contain at least the information provided for in Schedule 1 A to these Regulations insofar as that information does not already appear in the documents annexed to the prospectus in accordance with Regulation 75.

(3)       (a)       The following provisions of the Companies Act 1963 shall not apply in relation to a prospectus published by an investment company to which chapter 1 or 2 of Part VI applies or a UCITS situate in another Member State which proposes to market its units in the State—

section 43 (dating of prospectus);

section 44 (matters to be stated and reports to be set out in prospectus);

section 45 (exclusion of section 44 and relaxation of Third Schedule in case of certain prospectuses);

section 46 (expert's consent to issuing of prospectus containing statement by him);

section 47 (registration of prospectus);

section 51 (document containing offer of shares or debenture for sale to be deemed a prospectus);

section 361 (prospectuses relating to companies incorporated outside the State);

section 362 (exclusion of section 361 and relaxation of Third Schedule in case of certain prospectuses);

section 363 (provisions as to expert's consent and allotment);

section 364 (registration of prospectus);

section 367 (interpretation of provisions as to prospectuses).

(b)       The following provisions of the Companies Act 1963 shall not apply in respect of a preliminary prospectus or similar documentation published by an investment company to which chapter 1 or 2 of Part VI applies or a UCITS situate in another Member State which proposes to market its units in the State—

section 43 (dating of prospectus);

section 44 (matters to be stated and reports to be set out in prospectus);

section 45 (exclusion of section 44 and relaxation of Third Schedule in case of certain prospectuses);

section 46 (expert's consent to issuing of prospectus containing statement by him);

section 47 (registration of prospectus);

section 51 (document containing offer of shares or debenture for sale to be deemed a prospectus);

section 361 (prospectuses relating to companies incorporated outside the State);

section 362 (exclusion of section 361 and relaxation of Third Schedule in case of certain prospectuses);

section 363 (provisions as to expert's consent and allotment);

section 364 (registration of prospectus);

section 367 (interpretation of provisions as to prospectuses).

(c)       A preliminary prospectus or similar documentation published by an investment company shall clearly state in a prominent position that—

(i)       it does not constitute an offer or invitation to subscribe for or purchase units,

(ii)       the document has not been approved or reviewed by the Bank,

(iii)       it may not contain all relevant information and that the information contained therein is subject to change and should not be relied upon, and

(iv)       the investment company to which it refers has not been authorised by the Bank.

(4)       In the case of umbrella funds, the prospectus shall clearly state the charges applicable to switching of investments from one sub-fund to another.

Annexation of trust deed, deed of constitution or articles to prospectus.

75.       The trust deed, deed of constitution or the articles shall form an integral part of the prospectus and must be annexed thereto unless the unit-holder is informed in the prospectus that on request he or she will be sent the trust deed, deed of constitution or articles or be appraised of the place where, in each Member State in which the units or shares are placed on the market, he or she may consult them.

Offering of prospectus to investors before contract concluded and transmission of prospectus to Bank.

76.       (1)       The prospectus must be offered to investors free of charge before the conclusion of a contract.

(2)       A UCITS must send its prospectus and any amendments thereto to the Bank.

Publication of annual and half-yearly reports.

77.       An investment company and, for each of the trusts or common contractual funds it manages, a management company must publish an annual report for each financial year and a half-yearly report covering the first six months of the financial year.

Time limits.

78.       The annual and half-yearly reports must be published within the following time limits, with effect from the ends of the periods to which they relate—

(a)       4 months in the case of the annual report,

(b)       2 months in the case of the half-yearly report.

Contents of annual report.

79.       The annual report must include a balance-sheet or a statement of assets and liabilities, a detailed income and expenditure account for the financial year, a report on the activities of the financial year and the other information provided for in Schedule 1 B to these Regulations, as well as any significant information which will enable investors to make an informed judgement on the development of the activities of the UCITS and its results.

Contents of half-yearly report.

80.       The half-yearly report must include at least the information provided for in chapters I to IV of Schedule 1 B to these Regulations. Where a UCITS has paid or proposes to pay an interim dividend, the figures must indicate the results after tax for the half-year concerned and the interim dividend paid or proposed.

Transmission of reports to Bank.

81.       The annual and half-yearly reports and any other reports requested by the Bank must be sent to the Bank by the UCITS.

Offering of reports to investors before contract concluded.

82.       The latest annual report and any subsequent half-yearly report published must be offered to investors free of charge before the conclusion of a contract.

Availability to public of reports.

83.       The annual and half-yearly reports must be available to the public at the places specified in the prospectus.

Supply of reports to unit-holders.

84.       The annual and half-yearly reports shall be supplied to unit-holders free of charge on request.

Auditing requirements in relation to annual report.

85.       (1)       The accounting information given in the annual report must be audited by one or more persons empowered to audit accounts in accordance with the Companies Acts. The auditor's report, including any qualifications, shall be reproduced in full in the annual report.

(2)       If the auditor of a UCITS which has been authorised by the Bank—

(a)       has reason to believe that the information provided to investors or to the Bank in the reports or other documents of the UCITS does not truly describe the financial situation and the assets and liabilities of the UCITS, or

(b)       has reason to believe that the assets of the UCITS are not or have not been invested in accordance with these Regulations or the prospectus or the trust deed or the deed of constitution or the articles, or

(c)       has reason to believe that there exist circumstances which are likely to affect materially the ability of the UCITS to fulfil its obligations to unit-holders or meet any of its financial obligations under these Regulations, or

(d)       has reason to believe that there are material defects in the financial systems and controls or accounting records of the UCITS, or

(e)       has reason to believe that any fact or decision concerning a UCITS is liable to—

(i)         constitute a material breach of the laws, regulations or administrative provisions which lay down the conditions governing authorisation or which specifically govern pursuit of the activities of UCITS, or

(ii)         affect the continuous functioning of the UCITS, or

(iii)        lead to a refusal by the auditor to certify the accounts of the UCITS or to the expression of qualifications by the auditor,

or

(f)       has reason to believe that there are material inaccuracies in or omissions from any returns of a financial nature made by the UCITS to the Bank, or

(g)       proposes to qualify any certificate which he or she is to provide in relation to financial statements or returns of the UCITS under the Companies Acts or these Regulations,

he or she shall report the matter to the Bank in writing without delay.

(3)       (a)       The auditor of an authorised UCITS shall report to the Bank any facts or decisions referred to in paragraph (2)(e) of which the auditor becomes aware while conducting an audit of an undertaking which has close links resulting from a control relationship with the UCITS concerned.

(b)       For the purposes of this paragraph ‘close links’ means—

(i)        an arrangement whereby two or more persons are linked by—

(I)       ‘participation’, which means the ownership, direct or by way of control, of 20 per cent or more of the voting rights or capital of an undertaking, or

(II)       ‘control’, which means the relationship between a parent undertaking and a subsidiary undertaking, in all the cases referred to in Article 1(1) and (2) of Directive No. 83/349/EEC⁶ or a similar relationship between any person and an undertaking, and any subsidiary of a subsidiary shall also be considered a subsidiary of the parent undertaking which is at the head of those undertakings,

and

(ii)       an arrangement whereby two or more persons are permanently linked to one and the same person by a control relationship.

(4)       If the auditor of a UCITS which has been authorised by the Bank proposes to resign or not to seek re-election or re-appointment as auditor, he or she shall notify the Bank in writing to that effect without delay.

(5)       The auditor of an authorised UCITS shall, if requested by the Bank furnish to the Bank a report stating whether in his or her opinion and to the best of his or her knowledge the UCITS has or has not complied with a specified obligation of a financial nature under these Regulations.

(6)       Where the auditor of an authorised UCITS so requests, the Bank shall provide to the auditor in writing details of such returns of a financial nature to the Bank by the UCITS as the auditor requests for the purpose of enabling him or her to exercise his or her functions under these Regulations.

(7)       The auditor of an authorised UCITS shall send to the UCITS a copy of any report made by him or her to the Bank under paragraph (2) and (5).

(8)       (a)       Whenever the Bank is of the opinion that the exercise of its functions under these Regulations or the protection of the interests of unit-holders or shareholders so requires, it may require the auditor of an authorised UCITS to supply it with such information as it may specify in relation to the audit of the business of the UCITS and the auditor shall comply with the requirement.

(b)       The Bank may require that, in supplying information for the purposes of this paragraph, the auditor shall act independently of the authorised UCITS.

(9)       No duty to which the auditor to an authorised UCITS may be subject shall be regarded as contravened and no liability to the UCITS, or its unit-holders creditors or other interested parties, shall attach to the auditor by reason of his or her compliance with any obligation imposed on him or her by or under these Regulations.

(10)       Any communication made in good faith to the Bank by an auditor under paragraph (2)(e) or (3) shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative regulatory or administrative provision and shall not involve the auditor in liability of any kind.

Publication of issue and redemption prices.

86.       A UCITS must make public in an appropriate manner the issue, sale, repurchase or redemption price of its units each time it issues, sells, repurchases or redeems them, and at least twice a month. The Bank may, however, permit a UCITS to reduce the frequency to once a month on condition that such a derogation does not prejudice the interests of the unit-holders.

Publicity.

87.       All publicity comprising an invitation to purchase the units of a UCITS must indicate that a prospectus exists and the places where it may be obtained by the public.

PART X

SPECIAL PROVISIONS APPLICABLE TO UCITS MARKETING IN A MEMBER STATE OTHER THAN THAT IN WHICH IT IS SITUATED

Prior requirements.

88.       (1)       Where a UCITS situated in the State proposes to market its units in another Member State or a UCITS situated in another Member State proposes to market its units in the State it shall, prior to commencement of marketing, send written notification of its intention to the Bank.

(2)       A UCITS situated in another Member State shall send to the Bank together with the notification under paragraph (1)—

(a)       an attestation by the competent authority of the Member State in which it is situated to the effect that if fulfils the conditions imposed by the Directive,

(b)       its fund rules in the case of a unit trust, its deed of constitution in the case of a common contractual fund, and its memorandum and articles in the case of an investment company,

(c)       its prospectus including any amendments thereto,

(d)       where appropriate its latest Annual Report and any subsequent half yearly report,

(e)       details of the arrangements made for the marketing of its units in the State.

Entitlement to market in the State.

89.       The UCITS may commence marketing its units in the State at the expiry of two months after the requirements of Regulation 88(2) have been complied with unless the Bank establishes, in a reasoned decision taken before the expiry of that period of two months, that the arrangements made for the marketing of units do not comply with the provisions of Regulations 90 and 92.

Compliance with law, regulations and administrative provisions.

90.       A UCITS which markets its units in the State must comply with the law regulations and administrative provisions in force which do not fall within the field governed by the Directive.

Advertising.

91.       A UCITS which advertises its units in the State as part of its marketing activities within the State shall comply with any statutory provisions governing such advertising.

Provision of facilities in relation to unit-holders.

92.       A UCITS which markets its units in the State must satisfy the Bank that adequate measures have been taken to ensure that facilities are available in the State for making payments to unit holders, repurchasing or redeeming units and making available the information which UCITS are obliged to provide.

Distribution of documents and other information.

93.       A UCITS which markets its units in the State must distribute within the State, in at least one of the State's official languages, the documents and information required to be published under these Regulations and in accordance with the same procedure as provided for under these Regulations.

Power of Bank to prohibit marketing.

94.       The Bank may prohibit the marketing of the units of such a UCITS in the State if it fails to comply with the provisions of this Part. Any decision taken by the Bank in this regard shall be notified to the UCITS concerned and to the competent authorities of the Member State in which the UCITS is situated.

Generic names.

95.       For the purpose of carrying on its activities, a UCITS may use the same generic name (such as investment company or unit trust or common contractual fund) in the Community as it uses in the Member State in which it is situated. In the event of any danger of confusion, the host Member State may, for the purpose of clarification, require that the name by accompanied by certain explanatory particulars.

PART XI

SPECIAL PROVISION IN RELATION TO THE BANK

Collaboration with competent authorities in other Member States.

96.       The Bank shall collaborate closely with the competent authorities in other Member States in order to carry out its authorisation and supervision duties under these Regulations and shall for those purposes alone communicate to the competent authorities in other Member States all information required by them.

PART XII

POWERS OF BANK

Compliance with additional requirements imposed by Bank.

97.       (1)       The Bank may impose such supervisory and reporting requirements or conditions relating to the business of a management company, investment company or trustee to which these Regulations apply as the Bank considers appropriate and prudent from time to time for the purposes of the orderly and proper regulation of UCITS in accordance with these Regulations.

(2)       Requirements or conditions imposed under paragraph (1) may be imposed generally or on a particular management company, investment company or trustee or by reference to particular groups or classes of management company, investment company or trustee as the Bank considers appropriate and prudent for the purposes of the orderly and proper regulation of UCITS in accordance with these Regulations.

(3)       Without prejudice to the generality of paragraphs (1) and (2), requirements or conditions imposed by the Bank on one or more UCITS may make provision for any or all of the following matters—

(a)       the prudential requirements of the investment policies of the UCITS;

(b)       prospectuses and other information disseminated by the UCITS;

(c)       such other supervisory and reporting requirements and conditions relating to its business as the Bank considers appropriate and prudent to impose on the UCITS from time to time for the purposes of its or their orderly and proper regulation.

(4)       A UCITS shall comply with any requirements or conditions relating to its authorisation or business imposed by the Bank.

(5)       Supervisory and reporting requirements and conditions imposed under paragraph (1), including conditions relating to the investment policies of UCITS, may be additional to or stricter than those contained in these Regulations.

Keeping of books and records.

98.       (1)       Every management company, investment company or trustee of a UCITS shall keep at an office or offices within the State such books and records (including accounts) as may be specified from time to time by the Bank in the due discharge by the Bank of its statutory functions and shall notify the Bank of the address of every office at which any such book or record is kept for the purposes of this Regulation.

(2)       Different books and records may be specified by the Bank for the purposes of this Regulation in relation to different UCITS.

(3)       A responsible authority may, in writing, appoint a qualified person to exercise the powers conferred by paragraph (4).

(4)       To enable the Bank to perform its statutory functions, an authorised person may, on producing the person's authorisation, at any reasonable time inspect and take copies of, and make such enquiries as the person considers necessary in relation to—

(a)       the records kept under this Regulation by the management company, investment company or trustee of an authorised UCITS and

(b)       any accounting records relating to the management company investment company or trustee and kept under the Companies Acts, and

(c)       any other documents relating to the business of the UCITS.

For those purposes the authorised person may enter any office to which paragraph (1) relates and any other place where the person reasonably believes any such records are kept.

(5)       A person who has possession of, or control over, records referred to in paragraph (1) shall, at the request of an authorised person—

(a)       produce the records to that person and permit that person to inspect and take copies of them, and

(b)       give any information that that person reasonably requires with respect to the records, and

(c)       give such other assistance and information to that person as is reasonable in the circumstances.

(6)       Paragraphs (3) and (4) apply to every management company, investment company and trustee of a UCITS. When an inspection of the management company, investment company or trustee of a UCITS is being or proposed to be undertaken, those paragraphs (other than paragraph (4) (a)) also apply to—

(a)       every associated enterprise of the management company investment company and trustee, and

(b)       any other person,

if an inspection of the accounts or other records of that enterprise or other person is, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the UCITS.

(7)       Books and records kept pursuant to this Regulation shall—

(a)       be in addition to any books or other records to be kept by or under any other enactment, and

(b)       be retained for at least such period as the Bank may specify in respect of any such book or record.

(8)       In this Regulation—

‘associated enterprise’, in relation to the management company investment company or trustee of a UCITS, means—

(a)       a holding company of the management company, investment company or trustee, or

(b)       a subsidiary company of the management company or investment company or trustee, or

(c)       a company that is a subsidiary of a body corporate, where the management company, investment company or trustee is also a subsidiary of the body corporate, but neither company is a subsidiary of the other, or

(d)       any other body corporate that is not a subsidiary of the management company, investment company or trustee but in respect of which the management company, investment company or trustee is beneficially entitled to more than 20 per cent in nominal value of either the allotted share capital or of the shares carrying voting rights (other than voting rights that arise only in specified circumstances) in that other body corporate, or

(e)       a partnership in which the management company, investment company or trustee has an interest, and whose business is or, at the relevant time, was, in the opinion of the Bank, materially relevant to any inspection of the management company, investment company or trustee being carried out or proposed to be carried out under this Regulation;

‘authorised person’ means a person appointed under paragraph (3);

‘holding company’ has the meaning given to it by section 155 of the Companies Act 1963 ;

‘qualified person’ means—

(a)       a Director, officer or employee of the Bank, or a member or officer of the Irish Financial Services Regulatory Authority, or

(b)       in relation to any particular inspection (including a proposed inspection), any other person who in the opinion of the responsible authority possesses appropriate qualifications or experience to carry out the inspection to which this Regulation relates, or any part of that inspection;

‘records’ includes books and any other documents, and also includes—

(a)       any information kept in a non-legible form (whether electronically or otherwise) that is capable of being reproduced in a legible form and

(b)       the electronic or other means by which the information is capable of being reproduced;

‘responsible authority’ means the Governor of the Bank or the Chief Executive of the Irish Financial Services Regulatory Authority;

‘statutory functions’ means functions under these Regulations;

‘subsidiary company’ has the meaning given by section 155 of the Companies Act 1963 .

Furnishing of information to Bank.

99.       (1)       A management company, an investment company and a trustee shall each furnish the Bank—

(a)       at such times as the Bank may specify from time to time, such information and returns concerning the business to which the authorisation relates or the carrying on of a business as aforesaid by such person, as the case may be, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions; and

(b)       within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (a) of this Regulation) concerning the business to which the authorisation relates or the carrying on of a business as aforesaid by such person, as the case may be, that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions.

(2)       A person shall not furnish information or returns under this Regulation which he or she knows to be false.

(3)       Paragraphs (1) and (2) shall apply to the business of an associated enterprise to the extent only that the information and returns sought by the Bank are, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the holder of the authorisation to which the associated enterprise relates.

Application by Bank to High Court.

100.     (1)       Where, on an application made in a summary manner by the Bank, the court is of the opinion that there has occurred or is occurring a failure by an authorised UCITS to comply with a requirement or condition imposed by virtue of these Regulations the court may, by order, prohibit the continuance of the failure by the UCITS concerned.

(2)       The court when considering the matter may make such interim or interlocutory order as it considers appropriate.

(3)       Where the court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of the proceedings under this Regulation may be heard otherwise than in public.

Replacement of Management Company or Trustee.

101.     (1)       Without prejudice to section 8 of the Unit Trusts Act 1990 , the Bank may replace a management company or trustee with another management company or trustee where—

(a)       it is satisfied that the management company or trustee has failed to demonstrate the competence, probity or experience in the discharge of its functions reasonably required of it;

(b)       it is satisfied that the management company or trustee is not of sufficiently good repute;

(c)       it is satisfied that it is undesirable in the interests of the unit-holders that the management company or trustee remain as management company or trustee;

(d)       without prejudice to paragraph (c), it is satisfied that the management company or trustee—

(i)         has contravened any provision of these Regulations,

(ii)        in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information, or

(iii)       has contravened any prohibition or requirement imposed under these Regulations.

(2)       Upon replacement by the Bank under this Regulation of a management company or trustee, the management company or trustee shall cease to act for the UCITS, and the powers and duties of the management company or trustee shall be exercised and carried out by the new management company or trustee, as the case may be.

(3)       The Bank may, by application to the court, seek such interim or interlocutory relief preventing a management company or trustee from acting as such or appointing a person to carry out their functions and the court on such application, having regard to the matters specified in paragraph (1) and the protection of the unit-holders, may make such order as it deems appropriate.

(4)       Where the Bank proposes to replace the management company or trustee it shall give the management company or trustee notice of its intention to do so, which notice shall contain a statement of the reasons for which the Bank proposes to act and of the right of the management company or trustee under paragraph (5) to make representations.

(5)       A management company or trustee on whom a notice is given under paragraph (4) may, within 15 days from the date on which such notice is given, make written representations to the Bank.

(6)       The Bank shall have regard to any representations made to it in accordance with paragraph (5) in determining whether or not to replace the management company or trustee.

Revocation of authorisation.

102.     (1)       The Bank may revoke the authorisation of a UCITS if it appears to the Bank—

(a)       that any of the requirements for the authorisation of the UCITS are no longer satisfied;

(b)       that it is undesirable in the interests of the unit-holders or potential unit-holders that the UCITS should continue to be authorised;

(c)       without prejudice to subparagraph (b), that the management company or investment company or trustee of the UCITS has contravened any provision of these Regulations or, in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under these Regulations; or

(d)       that the UCITS has not made use of the authorisation within 12 months of the date on which it was authorised under these Regulations, or has failed to operate as a UCITS for a period of more than 6 months.

(2)       For the purposes of making a determination to revoke the authorisation of a UCITS pursuant to paragraph (1)(b), the Bank may take into account any matter relating to —

(a)       the unit trust, common contractual fund, management company investment company or trustee, or

(b)       a director or controller of the management company, investment company or trustee, or

(c)       any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.

(3)       The Bank may revoke the authorisation of a UCITS at the request of the management company or investment company or trustee of the UCITS; but it may refuse to do so if it considers that any matter concerning the UCITS should be investigated as a preliminary to a decision on the question of whether the authorisation should be revoked or that revocation would not be in the interests of the unit-holders.

(4)       The Bank shall, within 21 days of the revocation of an authorisation publish notice of the revocation in Iris Oifigiúil and in at least one national daily newspaper.

Notice of intention to revoke.

103.     (1)       Where the Bank proposes to revoke the authorisation of a UCITS otherwise than at the request of the management company, investment company or trustee of the UCITS, it shall give the applicants or, as the case may be, the management company, investment company or trustee of the UCITS written notice of its intention to do so, stating the reasons for which it proposes to act and giving particulars of the rights conferred by paragraph (2).

(2)       A management company, investment company or trustee on whom a notice is served under paragraph (1) may, within 15 days of the date of service, make written representations to the Bank.

(3)       The Bank shall have regard to any representations made in accordance with paragraph (2) in determining whether to refuse the application or revoke the authorisation, as the case may be.

Directions by the Bank.

104.     (1)       Where the Bank is of the opinion that it is in the public interest to do so or in the interests of the orderly and proper regulation of UCITS, or that any of the requirements for authorising a UCITS are no longer satisfied, or that the management company, investment company or trustee of such a UCITS—

(a)       has become or is likely to become unable to meet its obligations to its creditors,

(b)       has contravened any provision of these Regulations, or has failed to comply with any condition or requirement imposed under these Regulations by the Bank, or in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information,

(c)       is not maintaining adequate capital resources having regard to the volume and nature of its business, or

(d)       no longer complies with the capital or other financial requirements imposed by the Bank from time to time,

the Bank may give a direction in writing to the management company investment company or trustee requiring it to take such steps, including the winding-up of the UCITS or the suspension of the issue or redemption or both the issue and redemption, of units of the UCITS on a date specified in that direction until such further date as is specified in that or another direction, as in the opinion of the Bank are necessary in the interests of the orderly and proper regulation of UCITS or for the protection of unit-holders or creditors of the UCITS.

(2)       Where a direction under paragraph (1) affects an individual UCITS, that UCITS shall immediately notify its unit-holders of the terms of the direction.

(3)       The revocation of the authorisation of a UCITS shall not affect the operation of any direction under paragraph (1) which is then in force, and a direction may be given under that paragraph in relation to a UCITS whose authorisation has been revoked if a direction under that paragraph was already in force at the time of revocation.

(4)       For the purpose of paragraph (1), the Bank may take into account any matter relating to the UCITS, management company, investment company, trustee or any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.

(5)       The Bank may revoke a direction under paragraph (1) unless an order under paragraph (10) has been made in respect of that direction.

(6)       A management company, investment company or trustee the subject of a direction under paragraph (1) may apply to the court for, and the court may grant, an order varying or setting aside the direction.

(7)       A creditor who is affected by a direction under paragraph (1) may apply to the court to vary or set aside that direction where it affects the interests of the creditor to a material degree.

(8)       Upon application to it under paragraph (6) or (7), the court shall not vary or set aside a direction given by the Bank unless it is satisfied that the procedures laid down by, or the requirements of, these Regulations have not been complied with in any material respect, or that—

(a)       there was no evidence upon which the Bank could reasonably form an opinion that the public interest or the interests of the orderly and proper regulation of UCITS required such a direction,

(b)       there was no evidence upon which the Bank could reasonably form an opinion that the state of affairs specified in paragraph (1 existed, or

(c)       having regard to the matters submitted to the court and the orderly and proper regulation of UCITS, the direction was not reasonably proportionate to those matters so submitted.

(9)       An application under paragraph (6) or (7) shall be made within the period of 21 days from the date of the making of the direction and any such application that is so made after the expiry of that period shall not be entertained by the court.

(10)      The Bank may apply to the court for, and the court may grant, an order confirming a direction given under paragraph (1) or confirming and extending the period of operation of the direction for such period as the court may consider appropriate.

(11)      A direction to which paragraph (10) applies shall cease to have effect—

(a)       where the direction was confirmed, upon the expiration of the period to which the direction relates,

(b)       where the direction was confirmed and the period of its operation was extended, upon the expiration of that extended period,

(c)       from such date as the court by order determines,

(d)       upon the making of a winding-up order in respect of the UCITS, or with the sanction of the court, the dissolution of the UCITS, or

(e)       where the court is of the opinion that the circumstances which gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make an order to that effect, from such date as the court determines,

whichever occurs first.

(12)      Where the Bank is of the opinion that, even if the management company investment company or trustee the subject of a direction under paragraph (1) appears to be able to meet its obligations to its creditors, the circumstances giving rise to the direction are likely to continue to exist after the giving of direction, it may apply forthwith to the court for, and the court may grant, an order directing the management company investment company or trustee to prepare, in consultation with the Bank, a scheme for the orderly termination of its business and the discharge of its liabilities and to submit the scheme to the court, within 3 months after its preparation, for the approval of the court.

(13)      Notice of an application under paragraph (12) shall be given by the Bank to the management company, investment company or trustee, as appropriate.

(14)      The court shall not grant an order under paragraph (12) unless it is satisfied that the orderly and proper regulation of UCITS as a whole and the interests of the unit-holders and creditors of the UCITS in question together with the creditors of the trustee and management company require such an order.

(15)      The court shall not approve the terms of a scheme under paragraph (12 without hearing the Bank and, if any dispute in respect of the preparation of the scheme arises between the Bank and the other party concerned, the court may determine the dispute on application being made to it in that behalf by either party.

(16)      If the management company, investment company or trustee fails to comply with an order of the court under paragraph (12) or to adhere to a scheme approved by the court under paragraph (12), the Bank may apply to the court for, and the court may grant, such further order as it considers appropriate, including an order of committal or a winding-up order on the grounds that it is just and equitable that the management company investment company or trustee be wound up.

(17)      The court may, on application under paragraph (10), (12) or (16), hear evidence from creditors, and the court may make such interim or interlocutory order, as it considers appropriate.

(18)      While a direction under paragraph (1) is in force—

(a)       the UCITS to which it relates shall not be dissolved, and

(b)       the court may restrain any disposal of the assets of the UCITS should such disposal have the effect of perpetrating a fraud on the UCITS, its creditors or unit-holders.

Review of Bank's decision, etc., by the High Court.

105.     (1)       Where the Bank refuses an application for authorisation under Regulation 14(1), fails to take a decision on an application within the time prescribed by Regulation 14(2), revokes or refuses to revoke an authorisation under these Regulations, or proposes to replace a management company or trustee under Regulation 101, the applicant or the management company investment company, trustee or any aggrieved party may apply to the court to have the matter reviewed.

(2)       Whenever an application to review a decision of the Bank is brought to the court pursuant to paragraph (1) the court shall confirm the decision of the Bank unless it is satisfied that the procedures laid down by, or the requirements of these Regulations or the Directive have not been complied with in any material respect.

(3)       In any case where the court is satisfied that the procedures laid down by or the requirements of these Regulations or the Directive have not been complied with in any material respect, the court may set aside the decision of the Bank or, if the Bank has failed to take a decision within the time prescribed in Regulation 14(2), direct it to take a decision within such time as the court directs, and in any such case, remit the matter to the Bank which shall thereupon reconsider the matter and make a decision in accordance with such procedures and requirements.

PART XIII

OFFENCES

Penalties.

106.     (1)       An investment company, management company or trustee which contravenes any provision of these Regulations is guilty of an offence.

(2)       An auditor who contravenes any provision of these Regulations is guilty of an offence.

(3)       A person who contravenes the conditions of professional secrecy imposed by these Regulations is guilty of an offence.

(4)       (a)       A person guilty of an offence under paragraph (1) or (2) is liable on summary conviction to a fine not exceeding € 1,270 or, at the discretion of the court in the case of an individual, to imprisonment for a term not exceeding 12 months or to both.

(b)       If the contravention in respect of which a person was convicted under paragraph (a) is continued after the conviction that person is guilty of a further offence on every day on which the contravention continues and for each such offence the person is liable on summary conviction to a fine not exceeding € 320.

(5)       Summary proceedings in relation to an offence under these Regulations may be brought and prosecuted by the Director of Public Prosecutions or the Bank.

(6)       Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851 summary proceedings for an offence under these Regulations may be instituted within 3 years from the date of the offence.

(7)       Where an offence under these Regulations committed by a body corporate or by a person purporting to act on behalf of a body corporate is proved to have been so committed with the consent, or connivance of, or to be attributable to, or to have been facilitated by, any neglect on the part of any officer or employee of that body, that person is also guilty of an offence.

(8)       In this Regulation, a reference to a contravention includes a reference to a failure to comply.

PART XIV

VALIDITY OF UCITS ALREADY AUTHORISED AND REVOCATION OF EARLIER STATUTORY INSTRUMENTS

Validity of UCITS already authorised and revocation of earlier statutory instruments.

107.     (1)       The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 1989 ( S.I. No. 78 of 1989 ), the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 1996 ( S.I. No. 357 of 1996 ), the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 1999 ( S.I. No. 50 of 1999 ) and the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment Regulations 2003 ( S.I. No. 51 of 2003 ) are revoked.

(2)       A reference in any other enactment to a provision of the Regulations revoked by paragraph (1) shall be construed as a reference to the corresponding provision of these Regulations as shown in Schedule 2.

(3)       A reference in any other enactment to the Regulations revoked by paragraph (1) shall be construed as a reference to these Regulations.

(4)       Notwithstanding paragraph (1), the provisions of these Regulations shall not affect any act or thing done or commenced (but not yet completed) pursuant to the Regulations revoked by paragraph (1), prior to the coming into effect of these Regulations, including without limitation, the terms or conditions of Bank authorisations granted pursuant thereto and any such act or thing shall continue to have effect or may be completed and have effect as if done or commenced pursuant to these Regulations.

SCHEDULE 1 A

Information Requirements

—      the method and frequency of calculation of the net asset value of units,

—      the means, place and frequency of the publication of the value,

—      the stock exchange in the country of marketing the price on which determines the price of transactions effected outside stock exchanges in that country.

2.       Information concerning the trustee:

2.1.    Name or style, form in law, registered office and head office if different from the registered office;

2.2     Main activity.

3.       Information concerning the advisory firms or external investment advisers who give advice under contract which is paid for out of the assets of the UCITS:

3.1.    Name or style of the firm or name of the adviser;

3.2.    Material provisions of the contract with the management company or the investment company which may be relevant to the unit-holders, excluding those relating to remuneration;

3.3.    Other significant activities.

4.       Information concerning the arrangements for making payments to unit-holders, purchasing or redeeming units and making available information concerning the UCITS. Such information must in any case be given in the Member State in which the UCITS is situated. In addition, where units are marketed in another Member State, such information shall be given in respect of that Member State in the prospectus published there.

SCHEDULE 1 B

Information to be included in the periodic reports

I.       Statement of assets and liabilities

—transferable securities,

—debt instruments of the type referred to in Regulation 46(2)(a),

—bank balances,

—other assets,

—total assets,

—liabilities,

—net asset value.

II.      Number of units in circulation.

III.     Net asset value per unit.

IV.     Portfolio, distinguishing between:

(a)    transferable securities admitted to official stock exchange listing;

(b)    transferable securities dealt in on another regulated market;

(c)    recently issued transferable securities of the type referred to in Regulation 45(d);

(d)    other transferable securities of the type referred to in Regulation 46(1);

(e)    debt instruments treated as equivalent in accordance with Regulation 46(2)(a);

and analysed in accordance with the most appropriate criteria in the light of the investment policy of the UCITS (e.g. in accordance with economic, geographical or currency criteria) as a percentage of net assets; for each of the above investments the proportion it represents of the total assets of the UCITS should be stated.

Statement of changes in the composition of the portfolio during the reference period.

V.      Statement of the developments concerning the assets of the UCITS during the reference period including the following:

—income from investments,

—other income,

—management charges,

—trustee's charges,

—other charges and taxes,

—net income,

—distributions and income reinvested,

—changes in capital account,

—appreciation or depreciation of investments,

—any other changes affecting the assets and liabilities of the UCITS.

VI.     a comparative table covering the last three financial years and including, for each financial year, at the end of the financial year:

—the total net asset value,

—the net asset value per unit.

VII.    Details, by category of transaction within the meaning of Regulation 48(ii) and (iii) carried out by the UCITS during the reference period, of the resulting amount of commitments.

SCHEDULE 2

Table of cross references to specific UCITS Regulations in legislation

PART 1

Unit Trusts Act 1990

(No. 37 of 1990)

PART 2

Companies Act 1990

(No. 33 of 1990)

EXPLANATORY NOTE

(This is not part of the instrument and does not purport to be a legal interpretation.)

The purpose of these Regulations is to give legal effect to Council Directive No. 85/611/EEC of 20 December 1985¹ as amended by Council Directive No. 88/220/EEC of 22 March 1988² and Directive No. 95/26/EC of the Council and of the European Parliament of 29 June 1995³ , on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).

These Regulations apply to UCITS whose sole object is the collective investment in transferable securities of capital raised from the public, which operate on the principle of risk spreading and whose units are redeemable at the request of the unit holder (open-ended UCITS).

Under the Regulations, UCITS may be constituted either as unit trusts, investment companies with fixed capital or investment companies with variable capital or common contractual funds.

UCITS subject to the Regulations are prohibited from carrying on activities within the State unless they have been authorised by a competent authority in a Member State. The Central Bank and Financial Services Authority of Ireland (Bank), is appointed as a competent authority in respect of UCITS situated in the State. The Regulations are divided into 14 Parts.

Part I sets out the citation and interpretation clauses.

Part II defines the UCITS subject to the Regulations and provides that the provisions of the Unit Trusts Act, 1990 shall not apply to these UCITS.

Part III provides for the appointment of the Bank as a competent authority and publication of the names of UCITS authorised under the Regulations.

Part IV sets out the general requirements relating to authorization by the Bank of UCITS situated in the State and provides for a right of appeal to the High Court when authorization is refused.

Part V requires that the assets of a Unit Trust or a common contractual fund shall be entrusted to a trustee for safekeeping and sets out the general requirements for, and obligations and liability of, the trustee as well as the requirements in relation to the management company.

Part VI provides for the operation of UCITS in the form of investment companies. Disapplications of certain provisions of the Companies Acts are set out in Chapters 1 and 2. Chapter 1 covers investment companies with fixed capital. Chapter 2 provides for investment companies with variable capital. Chapter 3 sets out amendments in the Companies Act of 1963 in relation to UCITS authorised under the Regulations.

Chapter 4 requires that the assets of an investment company shall be entrusted to a trustee for safekeeping and sets out the requirements for, and obligations and liability of, the trustee. The Bank has discretion to exempt investment companies which market 80 per cent or more of their shares through one or more Stock Exchanges from the requirement to have a trustee.

Part VII prescribes the categories of investment in which UCITS subject to the Regulations may invest.

Part VIII obliges UCITS to redeem or repurchase units at the request of the unit holder and makes provision for the valuation of assets and the calculation of the issue and repurchase prices of units. It provides for the suspension of redemption or repurchase of units in certain circumstances. UCITS are required to issue registered certificates or bearer securities or alternatively written confirmation of entry in a register. Provision is made in relation to the remuneration of the manager and for the replacement of manager and trustee in exceptional circumstances. UCITS are prohibited from borrowing, with certain exceptions, and are prohibited from granting loans.

Part IX requires that prospectuses must be published and prescribes minimum information requirements. It also sets out the material to be contained in the annual and half yearly reports, which must be published within time limits and supplied to unit holders free of charge. The auditing requirements and duties of auditors are prescribed. This part also provides for the regular publication of issue and redemption prices for units and requires that all publicity comprising an invitation to purchase must indicate where the prospectuses can be obtained.

Part X sets out the requirements that a UCITS authorised in another Member State must comply with in order to market its units within the State. Such UCITS must ensure that facilities are provided within the State for making payments to unit holders, repurchasing units and distribution of required information in at least one of the official languages of the State.

Part XI provides for collaboration between the Bank and competent authorities in other Member States in relation to its authorisation and supervisory duties.

Part XII provides for the inspection and enforcement powers of the Bank and the keeping of such books and records as the bank may specify. The Bank is provided with powers to revoke authorisation, to issue directions and to apply to the High Court for a prohibition on the continuance of the failure by UCITS to comply with requirements. Provision is made for a review by the High Court of the Bank's decision to refuse or revoke authorisation or failure to take a decision within the prescribed time limits.

Part XIII provides for penalties for breaches of the Regulations.

Part XIV provides for the revocation of previous UCITS Regulations while acts done or commenced including authorisations by the Bank are saved.

These Regulations come into operation on 29 May 2003.

Schedules

Schedule 1A lists information requirements.

Schedule IB sets out the information to be included in the periodic reports referred to in Part IX.

Schedule 2 sets out a table of cross-references to specific UCITS Regulations in legislation.

¹ O.J. No. L375/3 of 31/12/1985

² O.J. No. L100/31 of 19/4/1988

³ O.J. No. L168/7 of 18/7/1995

⁴ O.J. No. L322/30 of 17/12/1977

⁵ O.J. No. L386/1 of 30/12/1998

⁶ O.J. No. L193 of 18/7/1983. Directive as last amended by Directive No. 90/605/EEC (O.J. No. L317 of 16/11/1990).

(1) Investment companies within the meaning of Regulation 41 (1) of these Regulations shall also indicate:

¹ O.J. No. L375/3 of 31/12/1985

² O.J. No. L100/31 of 19/4/1988

³ O.J. No. L168/7 of 18/7/1995