Meetings of holders, amendments to the scheme and service of notices

Part

CIS Collective Investment Schemes

Chapter

Meetings of holders, amendments to the scheme and service of notices

Printed on: 05/12/2024

Rulebook at: 01/03/2005

CIS 11

Meetings of holders, amendments to the scheme and service of notices

CIS 11.1

Introduction

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CIS 11.1.1

The rules and guidance in this chapter apply in accordance with CIS 11.1.4 R (Table of application).

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Purpose

CIS 11.1.2

This chapter helps in achieving the regulatory objective of protecting consumers as envisaged by section 2 and 5 of the Act, by:

(1) setting out specific conditions for meetings of holders, in particular about convening of meetings, attendance, voting rights and quorums;

(2) giving holders a right to convene a meeting in certain circumstances; and

(3) providing conditions which must be satisfied if the instrument constituting the scheme is to be amended.

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Explanation of this chapter

CIS 11.1.3

This chapter deals mainly with four subjects.

(1) Requirements relating to meetings of holders (see CIS 11.2 and CIS 11.3). These rules are more detailed for a meeting of unitholders of an AUT (CIS 11.3) than for a meeting of shareholders of an ICVC (CIS 11.2), where detailed procedures are left to be covered by the instrument of incorporation of the ICVC;

(2) Requirements relating to the amendment of an instrument of incorporation of an ICVC or a trust deed of an AUT (see CIS 11.4). Changes to the prospectus that require approval of holders are covered by CIS 3.4.2 R (Changes to prospectus);

(3) Requirements relating to amalgamations, reconstructions and other schemes of arrangement that may affect an authorised fund (see CIS 11.5). The conversion of an AUT to an ICVC comes within the meaning of a scheme of arrangement.

(4) Requirements for the service of notices and other documents (see CIS 11.6). The Financial Services and Markets Act 2000 (Services of Notices) Regulations 2001 (SI 2001/1420) contain provisions relating to the service of documents. These do not apply to the service of documents under the rules in CIS owing to the specific rules in this chapter.

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CIS 11.1.4

Table of application

This table belongs to CIS 11.1.1 R

Paragraph or section number

ICVC

ACD

Any other directors of an ICVC

Depositary of an ICVC

Manager

Trustee

11.1

11.2

11.3

11.4.1G - 11.4.2R

11.4.3R

11.4.4R

11.4.5G

11.5

11.6

Note: "X" means "applies".

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CIS 11.2

Meetings of shareholders

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General meetings

CIS 11.2.1

(1) The directors may convene a general meeting of shareholders at any time.

(2) On receipt of a requisition that complies with (3), the directors must immediately proceed to convene a general meeting of the ICVC for a date no later than eight weeks after receipt of the requisition.

(3) A requisition must:

(a) state the objects of the meeting;

(b) be dated;

(c) be signed by shareholders who, at that date, are registered as the shareholders of shares representing not less than one-tenth in value of all of the shares in the ICVC then in issue; and

(d) be deposited at the head office of the ICVC.

(4) A requisition may consist of several documents deposited with the ICVC at the same time, which must each be in similar form and signed by one or more shareholders.

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Special meaning of shareholder

CIS 11.2.2

(1) Unless any share in the ICVC is a participating security, in CIS 11.2.3 R to CIS 11.2.8 R (excluding CIS 11.2.4 R (3)(a)) "shareholders" means:

(a) in the case of a registered share, shareholders on the date seven days before the notices of the relevant meeting are sent out, but excluding any persons who are known to the ACD not to be shareholders at the time of the meeting; or

(b) in the case of bearer shares, shareholders of bearer shares which were in issue on the date seven days before the notices of the relevant meeting are sent out.

(2) If any share in the ICVC is a participating security:

(a) a registered shareholder is entitled to receive a notice of meeting under CIS 11.2.3 R, or a notice of adjourned meeting, if entered on the register at the close of business on a day to be determined by the ACD, which must not be more than 21 days before the notices of the meeting are sent out; and

(b) in CIS 11.2.4 R (1) and CIS 11.2.5 R to CIS 11.2.8 R "shareholders" means:

(i) the persons entered on the register at a time to be determined by the ACD and stated in the notice of the meeting, which must not be more than 48 hours before the time fixed for the meeting; or

(ii) in the case of bearer shares, shareholders of bearer shares which were in issue at the time applicable under (i).

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Notice of meetings

CIS 11.2.3

(1) Shareholders must be given at least 14 days written notice of a general meeting, inclusive of the date on which the notice is first served and the day of the meeting.

(2) Paragraph (1) does not apply to notice of an adjourned meeting.

(3) The accidental omission to give notice to, or the non-receipt of notice by, any of the shareholders does not invalidate the proceedings at any meeting.

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Quorum

CIS 11.2.4

(1) The quorum at a meeting of shareholders is two shareholders, present in person or by proxy or, in the case of a body corporate, by a duly authorised representative.

(2) Business must not be transacted at any meeting unless the requisite quorum is present at the commencement of business.

(3) If within half an hour from the time appointed for the meeting, a quorum is not present, the meeting:

(a) if convened on the requisition of shareholders, must be dissolved; and

(b) in any other case, must stand adjourned to:

(i) a day and time which is seven or more days after the day and time of the meeting; and

(ii) a place to be appointed by the chairman (if a chairman has been appointed in accordance with the instrument of incorporation) or otherwise by the directors.

(4) If, at an adjourned meeting under (3)(b), a quorum is not present within 15 minutes from the time appointed for the meeting, one person entitled to be counted in a quorum present at the meeting is a quorum.

(5) Notice of any adjourned meeting of shareholders must be given to shareholders. That notice must state that one or more shareholders present at the adjourned meeting (whatever their number and whatever the number of shares held by that shareholder or shareholders) will form a quorum.

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Resolutions

CIS 11.2.5

(1) Except where an extraordinary resolution is specifically required or permitted by the rules in this sourcebook, any resolution of shareholders required under the rules in this sourcebook or under the OEIC regulations is passed by a simple majority of the votes validly cast for and against the resolution at a general meeting of shareholders. This rule (CIS 11.2.5 R) is subject to CIS 11.2.10 R (2) (Variation of class rights).

(2) In the case of an equality of votes cast (whether on a show of hands or on a poll) in respect of a resolution put to a general meeting, any chairman appointed in accordance with the instrument of incorporation is entitled to a casting vote in addition to any other vote the chairman may have.

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Voting rights

CIS 11.2.6

(1) On a show of hands every shareholder who:

(a) (if an individual), is present in person; or

(b) (if a body corporate), is present by its representative duly authorised in that regard;

has one vote.

(2) On a poll:

(a) votes may be given either personally or by proxy or in any other manner permitted by the instrument of incorporation;

(b) the voting rights attached to each share must be the proportion of the voting rights attached to all of the shares in issue that the price of the share bears to the aggregate price or prices of all of the shares in issue:

(i) if any share in the ICVC is a participating security, at the time determined under CIS 11.2.2 R (2) (Special meaning of shareholder);

(ii) otherwise at the date specified in CIS 11.2.2 R (1); and

(c) a shareholder entitled to more than one vote need not, if he votes, use all his votes or cast all his votes in the same way.

(3) For joint shareholders of a share, the vote of the senior who votes, whether in person or by proxy, must be accepted to the exclusion of the votes of the other joint shareholders. For this purpose, seniority must be determined by the order in which the names stand in the register of shareholders.

(4)

(a) No director of the ICVC is entitled to be counted in the quorum of, and no director nor any associate of the director is entitled to vote at, any meeting of the ICVC.

(b) The prohibition in (a) does not apply to any shares which the director or its associate holds on behalf of, or jointly with, a person who, if himself the registered shareholder, would be entitled to vote and from whom the director or its associate (as the case may be) has received voting instructions.

(c) Therefore, for the purpose of CIS 11.2.4 R (Quorum) and CIS 11.2.7 R (Right to demand a poll), shares held, or treated as held, by any director, must not, except as mentioned in (b), be regarded as being in issue.

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Right to demand a poll

CIS 11.2.7

A resolution put to the vote of a general meeting must be determined on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:

(1) by the chairman; or

(2) by at least two shareholders (present in person or by proxy or, in the case of a body corporate, by a duly authorised representative); or

(3) by the depositary; or

(4) without affecting (1), (2) or (3), in accordance with any relevant provisions contained in the instrument of incorporation.

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Proxies

CIS 11.2.8

(1) A shareholder entitled to attend and vote at a meeting of the ICVC is entitled to appoint another person to attend and vote in his place (whether a shareholder or not).

(2) Except in so far as the instrument of incorporation otherwise provides, a shareholder is entitled to appoint more than one proxy to attend on the same occasion but a proxy is entitled to vote only on a poll.

(3) Every notice calling a meeting of the ICVC must contain a reasonably prominent statement that a shareholder entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of the shareholder.

(4) An instrument appointing a proxy, or any other document necessary to show the validity of, or otherwise relating to, the appointment of a proxy, must not be required to be received by the ICVC or any other person more than 48 hours before the meeting or adjourned meeting for the appointment to be effective.

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Class meetings

CIS 11.2.9

This chapter applies, unless the context otherwise requires, to class meetings as it applies to general meetings of shareholders, but by reference to the shares of the class concerned and the shareholders and prices of such shares.

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Variation of class rights

CIS 11.2.10

(1) The rights attached to a class of shares must not be varied except with the sanction of a resolution passed at a class meeting of the shareholders of the class.

(2) The instrument of incorporation may require such a resolution to be passed by more than a simple majority of the votes validly cast for and against it.

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CIS 11.3

Meetings of unitholders

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Convening and attendance at meetings of unitholders

CIS 11.3.1

(1) The trustee or the manager may, at any time, convene a meeting of unitholders.

(2) The trustee must, on request in writing of unitholders registered as holding not less than one-tenth (or any proportion below one-tenth specified for this purpose in the trust deed) in value of the units in issue, convene a meeting of unitholders.

(3) Any meeting of unitholders must be held at such time and place as the trustee, after consulting the manager, thinks fit.

(4) The manager and trustee are each entitled to receive notice of and to attend every meeting of unitholders.

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Special meaning of unitholder

CIS 11.3.2

(1) Unless any unit in the AUT is a participating security, in CIS 11.3.3 R to CIS 11.3.12 R, "unitholders" means:

(a) in the case of registered units, unitholders on the date seven days before the notices of the relevant meeting are sent out, but excluding any persons who are known to the manager not to be unitholders at the time of the meeting; or

(b) in the case of bearer units, unitholders of bearer units which were in issue on the date seven days before the notices of the relevant meeting are sent out.

(2) If any unit in the AUT is a participating security:

(a) a registered unitholder is entitled to receive a notice of meeting under CIS 11.3.6 R, or a notice of adjourned meeting, if entered on the register at the close of business on a day to be determined by the manager, which must not be more than 21 days before the notices of the meeting are sent out; and

(b) in CIS 11.3.3 R to CIS 11.3.12 R (excluding CIS 11.3.6 R), "unitholders" means:

(i) the persons entered on the register at a time to be determined by the manager and stated in the notice of meeting, which must not be more than 48 hours before the time fixed for the meeting; or

(ii) in the case of bearer units, unitholders of bearer units which were in issue at the time applicable under (i).

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Power of a meeting of unitholders

CIS 11.3.3

A meeting of unitholders duly convened and held in accordance with this chapter is competent by extraordinary resolution to require, authorise or approve any act, matter or document in respect of which any such resolution is required or expressly contemplated by the rules in this sourcebook, but will not have any other powers.

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The chairman

CIS 11.3.4

(1) A meeting of unitholders must be presided over by a chairman, (who need not be a unitholder), nominated in writing by the trustee.

(2) If no such person referred to in (1) is nominated or if at any meeting the person nominated is not present within 15 minutes after the time appointed for holding the meeting, the unitholders present must choose one of their number to be chairman.

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Adjournment

CIS 11.3.5

(1) The chairman:

(a) may, with the consent of any meeting of unitholders at which a quorum is present; and

(b) must, if so directed by the meeting;

adjourn the meeting from time to time and from place to place.

(2) Business must not be transacted at any adjourned meeting, except business which might lawfully have been transacted at the meeting from which the adjournment took place.

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Notice of meetings

CIS 11.3.6

(1) Unitholders must be given at least 14 days written notice (or any longer period of notice specified for the purpose in the trust deed), inclusive of the date on which the notice is first served and the day of the meeting.

(2) The notice must specify the place, day and hour of meeting and the terms of the resolutions to be proposed.

(3) Unless the trustee has convened the meeting, a copy of the notice must be sent to the trustee.

(4) The accidental omission to give notice to, or the non-receipt of notice by, any of the unitholders does not invalidate the proceedings at any meeting.

(5) Notice of any adjourned meeting of unitholders must be given to unitholders. That notice must state that one or more unitholders present at the adjourned meeting, whatever their number, and whatever the number of units held by them, will form a quorum.

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Quorum

CIS 11.3.7

(1) The quorum at a meeting of unitholders is the unitholders present in person or by proxy or, in the case of a body corporate, by a duly authorised representative, of one-tenth in value (or any proportion more than one-tenth in value specified for this purpose in the trust deed) of all the units in issue:

(a) if any unit in the AUT is a participating security, at the time determined under CIS 11.3.2 R (2) (Special meaning of unitholders);

(b) otherwise at the date specified in CIS 11.3.2 R (1);

excluding from the calculation any units known to have been redeemed before the time of the meeting.

(2) No business is to be transacted at any meeting unless the requisite quorum is present at the commencement of business.

(3) If within half an hour from the time appointed for the meeting a quorum is not present, the meeting must stand adjourned to:

(a) a day and time which is 14 or more days after the day and time of the meeting; and

(b) a place to be appointed by the chairman.

(4) If, at an adjourned meeting under (3), a quorum is not present within 15 minutes from the time appointed for the meeting, one person entitled to be counted in a quorum present at the meeting is a quorum.

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Restrictions on the posing of composite resolutions to meetings of unitholders

CIS 11.3.8

(1) The amendments to the trust deed set out in (2) must not be taken to have been authorised by an extraordinary resolution at a meeting of unitholders, unless each such modification has been the subject of a separate motion for its approval which has been separately approved by an extraordinary resolution at that meeting.

(2) The amendments to the trust deed referred to in (1) are:

(a) an increase in the maximum of any periodic charge stated in the trust deed;

(b) an increase in the maximum of any preliminary charge stated in the trust deed; and

(i) the kind of property in which the scheme property may be invested; or

(ii) the proportion of property to be invested in assets of any description; or

(iii) the description of transactions permitted; or

(iv) the borrowing powers of the AUT.

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Voting rights

CIS 11.3.9

(1) On a show of hands every unitholder who:

(a) (if an individual) is present in person; or

(b) (if a body corporate) is present by its representative duly authorised in that regard;

has one vote.

(2)

(a) On a poll, every unitholder who is present in person or by proxy or, in the case of a body corporate, by a duly authorised representative has one vote for every complete undivided share in the scheme property and a further part of one vote proportionate to any fraction of such an undivided share of which he is the unitholder.

(b) A unitholder entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.

(3) A body corporate being a unitholder may authorise such person as it thinks fit to act as its representative at any meeting of unitholders and the person so authorised is entitled to exercise the same powers on behalf of the body corporate which he represents as the body corporate could exercise if it were an individual unitholder.

(4) For joint unitholders, the vote of the senior who votes, whether in person or by proxy must be accepted to the exclusion of the votes of the other joint unitholders. For this purpose seniority must be determined by the order in which the names stand in the register of unitholders.

(5) On a poll votes may be given either personally or by proxy or in any other manner permitted by the trust deed.

(6)

(a) No manager is entitled to be counted in the quorum of, and no manager nor any associate of the manager is entitled to vote at, any meeting of unitholders.

(b) The prohibition in (a) does not apply to any units which the manager or its associate holds on behalf of, or jointly with a person who, if himself the registered unitholder, would be entitled to vote and from whom the manager or its associate (as the case may be) has received voting instructions.

(c) Therefore, for the purpose of this rule (CIS 11.3.9 R) and the other rules in this section (CIS 11.3), the units held treated as held by the manager must not, except as mentioned in (b), be regarded as being in issue.

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Right to demand a poll

CIS 11.3.10

(1) An extraordinary resolution put to the vote of a meeting of unitholders must be determined on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:

(a) by the chairman; or

(b) by the trustee; or

(c) by one or more unitholders present in person or by proxy or, in the case of a body corporate by a duly authorised representative, and holding or representing one-twentieth (or any proportion less than one-twentieth specified for this purpose in the trust deed) in value of all the units in issue:

(i) if any unit in the AUT is a participating security, at the time determined under CIS 11.3.2 R (2) (Special meaning of unitholder: participating securities);

(ii) otherwise at the date specified in CIS 11.3.2 R (1) (Special meaning of unitholder);

excluding from that calculation any units known to have been redeemed before the time of the meeting.

(2) Unless a poll is demanded in accordance with (1), a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost is conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.

(3) If a poll is duly demanded, it must be taken in the manner which the chairman directs. The result of a poll is deemed to be the resolution of the meeting at which the poll was demanded.

(4) A poll demanded on the election of a chairman or on a question of adjournment must be taken immediately; a poll demanded on any other question must be taken at the time and place which the chairman directs.

(5) The demand for a poll must not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.

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Proxies

CIS 11.3.11

(1) The instrument appointing a proxy must be signed by the appointor or of his attorney duly authorised in writing or, if the appointor is a body corporate, either under the common seal or by an officer or attorney so authorised.

(2) The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority must be deposited at the place which the trustee, or the manager with the approval of the trustee, may in the notice convening the meeting direct (or if no such place is appointed then at the registered office of the manager).

(3) The instrument must be deposited not less than 48 hours before the time appointed for holding the meeting or adjourned meeting (or in the case of a poll before the time appointed for the taking of the poll) at which the person named in the instrument proposes to vote, and in default the instrument of proxy is not to be treated as valid.

(4) No instrument appointing a proxy is valid after the expiration of 12 months from the date stated in it as the date of its execution.

(5) A person appointed to act as proxy need not be a unitholder.

(6) An instrument of proxy may be in the usual common form or in any other form which the trustee approves.

(7)

(a) A vote given in accordance with the terms of an instrument of proxy is valid in spite of:

(i) the previous death or incapacity of the principal; or

(ii) revocation of the proxy or of the authority under which the proxy was executed; or

(iii) the transfer of the units in respect of which the proxy is given;

provided that no intimation in writing of that death, incapacity, revocation or transfer has been received.

(b) Any such intimation must have been received at the place appointed for the deposit of proxies or, if no such place is appointed, at the registered office of the manager before the commencement of the meeting or adjourned meeting at which the proxy is used.

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Minutes

CIS 11.3.12

(1) Minutes of all resolutions and proceedings at every meeting of unitholders must be made and duly entered in books to be from time to time provided for the purpose by, and at the expense of, the manager.

(2) Any minute referred to in (1) purporting to be signed by the chairman of the meeting of unitholders is conclusive evidence of the matters stated in it.

(3) Until the contrary is proved, every such meeting in respect of the proceedings of which minutes have been made are treated as duly held and convened and all resolutions passed at it to have been duly passed.

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Class meetings

CIS 11.3.13

(1) If the trustee is of the opinion that any extraordinary resolution to be proposed is one in relation to which there is or might be a conflict of interest between:

(a) the unitholders of accumulation units and the unitholders of income units; or

(b) in the case of an AUT that is an umbrella scheme, between the unitholders in one sub-fund and the unitholders in another;

that resolution is not to be treated as duly passed, unless instead of being passed at a single meeting of all unitholders, it is duly passed at separate meetings respectively of the unitholders of accumulation units and income units or of the unitholders in the one sub-fund and unitholders in the other (as the case may be).

(2) This chapter applies to each separate meeting held under (1) as it applies to other meetings.

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CIS 11.4

Amendments to the instrument constituting the scheme

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Explanation

CIS 11.4.1

(1) This section (CIS 11.4) outlines how amendments to the instrument constituting the scheme may be made.

(2) For an ICVC, paragraph 5 of Schedule 2 (Instrument of incorporation) to the OEIC regulations:

(a) Prohibits any amendment to the statements in the instrument of incorporation which are required by Schedule 2, paragraph 2 of the OEIC regulations;

(b) Prohibits any amendment to a provision contained in the instrument of incorporation in accordance with Schedule 2, paragraph 3 of the OEIC regulations, unless it has been approved by a resolution of the shareholders; and

(3) CIS 11.4.2 R and sub-paragraphs (1), (4) and (5) of CIS 11.4.4 R contain the rules referred to in (2)(c). The rules relating to amendments of a trust deed are contained in CIS 11.4.3 R and sub-paragraphs (2) to (4) and (6) to (8) of CIS 11.4.4 R.

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Amendment to instrument of incorporation: with meeting

CIS 11.4.2

(1) An amendment of a provision of the instrument of incorporation of an ICVC required to comply with paragraphs (3)(1) or (4)(1)(b) or (4)(1)(d) of Schedule 2 (Instrument of incorporation) to the OEIC regulations, must not be made except by an extraordinary resolution, unless:

(a) the amendment is to the category of the ICVC and is made for the purpose of CIS 12.5.5 R (An ICVC with only one sub-fund); or

(b) the amendment is to a provision required to comply with paragraph (4)(1)(d) of Schedule 2 of the OEIC regulations and is made solely to reflect the introduction of a new sub-fund.

(2) Any other amendment of the instrument of incorporation must not be made except by a resolution of the shareholders, but this is subject to (3) and to CIS 11.4.4 R (Amendment to the instrument constituting the scheme: without meeting).

(3) An amendment to the instrument of incorporation that:

(a) relates to a particular class of shares or particular classes (and does not relate to a provision required to comply with paragraph 3(1) of Schedule 2 to the OEIC regulations); and

(b) does not prejudice the shareholders of any other class;

may be made by a resolution passed at a class meeting or class meetings. That resolution must be an extraordinary resolution if the amendment is of a type within (1) and to which (1)(a) or (1)(b) does not apply.

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Amendment to the trust deed: with meeting

CIS 11.4.3

(1) An amendment must not be made to the trust deed except by a deed, expressed to be supplemental to the trust deed, entered into by the manager and the trustee following:

(a) the calling of a meeting of unitholders by notice (if required under (2)); and

(b) the approval of a meeting of unitholders (if required under (3)).

(2) The calling of a meeting is necessary unless the manager and trustee have agreed that the amendment is one which may, in accordance with CIS 11.4.4 R, be made without the approval of a resolution.

(3) The approval of the unitholders (signified by the passing at the meeting of an extraordinary resolution authorising the amendment) is required in any case where a meeting of unitholders has to be called.

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Amendment to the instrument constituting the scheme: without meeting

CIS 11.4.4

(1) An amendment to the instrument of incorporation of an ICVC may be made by a resolution of the directors in any of the cases to which (4) applies, unless CIS 11.4.2 R (1) (Amendment to the instrument of incorporation: with meeting) applies.

(2) An amendment to the trust deed may be made without the approval of a resolution of unitholders, in any of the cases to which (4), (6) or (7) applies. This is subject to:

(a) any restriction on the powers to amend the trust deed which may be contained in the trust deed; and

(b) paragraph (3).

(3) An amendment to the trust deed is not within (2) if it:

(a) would affect any express restriction imposed by the trust deed on the powers which the manager and trustee or either of them would otherwise be able to exercise within the rules in this sourcebook; or

(b) would increase the maximum of any preliminary charge or periodic charge authorised by the trust deed to be made by the manager; or

(c) would relate to the authority for payments to be made out of the scheme property to the trustee by way of remuneration for the trustee's services.

(4) This sub-paragraph (4) applies in respect of an authorised fund, subject to sub-paragraph (5) in the case of an ICVC, if the amendment is required solely:

(a) to implement any change in the law, including a change brought about by an amendment of the OEIC regulations or of the Act or of the rules in this sourcebook; or

(b) as a direct consequence of any such change; or

(d) to remove from the instrument constituting the scheme obsolete provisions; or

(e) in the case of an umbrella scheme, to remove references to a sub-fund, following the approval of the FSA to a proposal to alter the umbrella scheme by removing that sub-fund;

(f) to introduce limited issue shares or limited issue units unless the directors (for an ICVC) or the manager and trustee (for an AUT) consider to do so would involve any holder or potential holder in any material prejudice; or

(g) to make any other change to the instrument constituting the scheme which the directors (for an ICVC) or the manager and trustee (for an AUT) consider does not involve any holder or potential holder in any material prejudice.

(5) For an ICVC, (4) does not apply unless:

(a) the instrument of incorporation provides for the amendment to be made by a resolution of the directors; and

(b) the amendment would not introduce or affect any provision relating to the kind of property in which the scheme property may be invested unless the amendment is required solely to reflect the introduction of a new sub-fund.

(6) This sub-paragraph (6) applies to an AUT, if the amendment is required solely:

(a) for a relevant pension scheme or a relevant charitable scheme, to preserve its status as such a scheme; or

(b) for a relevant pension scheme, to specify as the scheme or the investment trust in which the AUT is to invest, a regulated collective investment scheme or eligible investment trust which has replaced the previous scheme or investment trust as a result of a scheme of arrangement; or

(c) to include a provision to enable the manager to deduct a redemption charge, where the circumstance envisaged by CIS 8.5.3 R (Control over maximum charges on issue and redemption: single-priced AUTs) and CIS 15.4.11 R (Control over maximum charges on issue and redemption: for dual-priced AUTs) does not apply; or

(d) to replace the manager or the trustee where it has been removed or wishes to retire or has retired; or

(e) to include or change a provision relating to the remuneration of the trustee for its services in connection with the establishment and maintenance of a plan register.

(7) This sub-paragraph (7) applies to an AUT, if the amendment is:

(a)

(i) solely for the purpose of applying to the AUT the rules applicable to single-priced AUTs; or

(ii) an amendment which is necessary as a result of an amendment within (i); and

(b) made not less than six weeks after:

(i) the manager has given notice in writing to the unitholders and plan investors of the proposed amendment and the date on which it is intended to take effect or how that date will be determined; and

(ii) the manager has revised the prospectus to include a statement about the proposed change from dual to single-pricing.

(8) The notice referred to in (7)(b)(i) must include or be accompanied by suitable information on the nature and implications of the proposed change.

01/11/2002

Matters to be included in notices sent to unitholders when a manager proposes a change from dual to single pricing

CIS 11.4.5

(1) CIS 11.4.4 R(8) requires any notice given to unitholders or plan investors when a manager proposes a change from dual to single pricing to include or be accompanied by suitable information on the nature and implications of the proposed change. Paragraph (3) of this guidance (CIS 11.4.5 G) lists some matters which could assist managers in their consideration of what constitutes suitable information.

(2)

(a) The matters listed in (3) are not intended to be exhaustive, nor are they in any particular order of importance.

(b) In considering whether information is suitable, managers are expected to take into account the amount of information, its relevance and the manner of its presentation.

(c) The FSA has no objection to detailed issues being covered by reference to the prospectus, key features or simplified prospectus for the AUT and other documents, where these documents accompany the notice sent to unitholders or plan investors.

(3)

(a) The manager's reason for the change: The manager's reason for the proposed change should be stated.

(b) Time: The notice should state when the proposed change is intended to take effect.

(d) Differences between dual and single-pricing: The notice should outline the main differences between dual and single-pricing.

(e) Dilution: The notice should cover dilution:

(i) what it is;

(ii) how it will affect investors; and

(iii) the manager's policy on either imposing a dilution levy or making a dilution adjustment or doing neither.

(f) Impact on the investor: The notice should indicate what the implications of a change from dual to single-pricing are for investors, taking into account the particular circumstances of the AUT concerned.

(g) Valuation of the scheme property: The notice should state the major differences in the valuation of the scheme property.

(h) Any other material facts: The notice should state any other material facts that a unitholder or plan investor should be aware of in order to understand the implications of the intended transition.

01/08/2002

CIS 11.5

Schemes of arrangement

01/12/2004

Schemes of arrangement: explanation

CIS 11.5.1

(1) Under section 251 of the Act (Alteration of schemes and changes of manager or trustee) or regulation 21 of the OEIC regulations (The Authority's approval for certain changes in respect of a company), written notice of certain types of proposed change must be given to the FSA. Effect cannot be given to such a change except in accordance with that section or regulation.

(2) One of the types of proposal that is subject to section 251 or regulation 21 is a proposal that an ICVC or AUT should be involved in a scheme of arrangement.

(3) The issue of units in exchange for assets is subject to:

(a) CIS 4.3.3 R (Issue and cancellation of shares by an ICVC);

(b) CIS 4.3.4 R (Issue and cancellation of units in an AUT);

(d) CIS 15.3.5 R (Issue by trustee).

01/12/2004

Schemes of arrangement: requirements

CIS 11.5.2

(1) A scheme of arrangement must not result in holders of units in an authorised fund becoming holders of units in any body other than a regulated collective investment scheme.

(2) For a UCITS scheme or a sub-fund of a UCITS scheme, (1) applies as if the reference to a regulated collective investment scheme excluded any recognised scheme other than a scheme recognised under section 264 of the Act (Schemes constituted in other EEA States).

(3) Where, for the purpose of a scheme of arrangement, it is proposed that scheme property of an authorised fund should become the property of another regulated collective investment scheme or sub-fund of a regulated collective investment scheme, the proposal must not be implemented without the sanction of an extraordinary resolution of the holders of units in the authorised fund, unless (4) applies.

(4) Where, for the purposes of a scheme of arrangement, it is proposed that scheme property attributable to a sub-fund of an umbrella scheme should become the property of another regulated collective investment scheme or of another sub-fund of a regulated collective investment scheme (whether or not of that umbrella scheme), the proposal must not be implemented without the sanction of:

(a) an extraordinary resolution of the holders of units in the sub-fund of that umbrella scheme; and

(b) (unless implementation of the scheme of arrangement is not likely to result in any material prejudice to the interests of the holders of units in any other sub-fund of that umbrella scheme) an extraordinary resolution of the holders of units in that umbrella scheme.

(5) If it is proposed that an authorised fund or sub-fund of an umbrella scheme should receive property (other than its first property) as a result of a scheme of arrangement (or an arrangement equivalent to a scheme of arrangement) which is entered into by some other collective investment scheme or sub-fund, or by a body corporate, the proposal must not be implemented without the sanction of an extraordinary resolution of the holders of units in the authorised fund or (as the case may be) of the class or classes of units related to the sub-fund unless (6) applies.

(6) This paragraph (6) applies if the directors of the ICVC or the manager and trustee of the AUT agree that the receipt of the property concerned for the account of the ICVC or AUT:

(a) is not likely to result in any material prejudice to the interests of the holders of units in the authorised fund; and

(b) is consistent with the objectives of the authorised fund or sub-fund; and

01/12/2004

CIS 11.6

Service of notices and other documents

01/12/2004

Notices to holders

CIS 11.6.1

(1) Where this sourcebook requires any notice or document to be served upon a holder, it is duly served :

(a) for units held by a registered holder, if it is:

(i) sent by post to or left at the registered holder's address as appearing in the register; or

(ii) delivered by using an electronic medium in accordance with CIS 11.6.2 R (Other notices); or

(b) for units for the time being represented by bearer certificates, if it is given in the manner provided for in the most recently published prospectus.

(2) Any notice or document served by post is deemed to have been served on the second day following the day on which the letter containing the notice or document is posted, and in proving such service it is sufficient to prove that that letter was properly addressed, stamped and posted. Any notice or document left at a registered address or delivered other than by post is deemed to have been served on the day it was so left or delivered.

(3) Service of a notice or document on any one of joint holders is effective service on the other joint holders.

01/12/2004

Other notices

CIS 11.6.2

(1) Where this sourcebook requires any notice or document to be served or information to be given to any person, including the FSA, this must be:

(a) in hard copy; or

(b) in any other legible form, provided:

(i) this is consistent with the ICVC's, the director's, the authorised fund manager's or depositary's knowledge of how the recipient of the notice or document wishes or expects to receive the notice or document;

(ii) the ICVC, the director, the authorised fund manager or depositary is able to produce the item in hard copy;

(iii) the recipient is able to know or record the time of receipt; and

(iv) the context does not require otherwise.

(2) In this sourcebook, any requirement that a document be signed may be satisfied by an electronic signature or electronic evidence of assent.

(3) This rule (CIS 11.6.2 R) is subject to CIS 4.3.6 R (Instructions or notifications between manager and trustee: for single-priced AUTs) or CIS 15.3.10 R (Instructions or notifications between manager and trustee: for dual-priced AUTs).

01/12/2004

Form of document or notice

CIS 11.6.3

In this sourcebook:

(1) CIS 11.6.2 R does not affect any other legal requirement which may apply in relation to the form or manner of executing a document or agreement; and

(2) references to written form include hard copy and electronically displayed or recorded information.

01/12/2004