LR 15
Investment entities
LR 15.1
Application
- 01/07/2005
LR 15.1.1
See Notes
This chapter applies to the following issuers with, or applying for, a listing of their securities:
- (1) an investment company;
- (2) an investment trust;
- (3) an overseas investment company seeking a primary listing;
- (4) a property investment company;
- (5) an authorised property unit trust;
- (6) an open-ended investment company which is a recognised scheme;
- (7) an open-ended investment company which is an unrecognised scheme; and
- (8) an issuer of securities falling within paragraph 1 of Schedule 11A to the Act (Transferable securities).
- 01/07/2005
LR 15.1.2
See Notes
- 01/07/2005
LR 15.2
Requirements for listing
- 01/07/2005
Application
LR 15.2.1
See Notes
- (1) LR 15.2.2 R to LR 15.2.14 R and LR 15.2.18 G apply to an investment company.
- (2) LR 15.2.2 R and LR 15.2.17 R to LR 15.2.18 G apply to an investment trust.
- 01/07/2005
Requirements for all investment entities
LR 15.2.2
See Notes
To be listed, an applicant must comply with the following:
- (1) those responsible for managing the investments must have adequate experience;
- (2) there must be an adequate spread of investment risk;
- (3) the applicant must be a passive investor and must not control or seek to control, or be actively involved in the management of, any companies or businesses in which it invests; and
- (4) the applicant must not, to a significant extent, be a dealer in investments.
- 01/07/2005
Requirements for investment companies
LR 15.2.3
See Notes
- 01/07/2005
Accounts and nature and duration of business activities
LR 15.2.4
See Notes
An investment company must either:
- (1) satisfy the conditions set out in LR 6.1.3 R (Audited accounts for three years) and LR 6.1.4 R (Nature and duration of business activities); or
- (2) satisfy the FSA that its directors and investment managers have sufficient and satisfactory experience in the management of investments of the type in which the company proposes to invest.
- 01/07/2005
LR 15.2.5
See Notes
- 01/07/2005
Corporate governance
LR 15.2.6
See Notes
- 01/07/2005
LR 15.2.7
See Notes
In complying with LR 15.2.6 R:
- (1) a majority of the board or equivalent body must not be:
- (a) directors, employees or professional advisers to other investment companies that are:
- (i) managed by any such investment managers; or
- (ii) managed by any other company in the same group as any such investment managers; or
- (b) directors, employees, partners, officers, or professional advisers to any such investment manager or any other company in the same group as any such investment manager;
- (2) no more than one director, partner, employee, or professional adviser to each such investment manager or any other company in the same group as any such investment manager may be a director of the investment company; and
- (3) a director as described in paragraph (2) must be subject to annual re-election by shareholders.
- 01/07/2005
LR 15.2.8
See Notes
- 01/07/2005
LR 15.2.9
See Notes
In complying with LR 15.2.8 G the chairman of the board must not be:
- (1) a director, employee, officer, partner or professional adviser to any investment manager of the investment company; or
- (2) a director, employee, officer, partner, or professional adviser to any other company in the same group as any investment manager of the investment company; or
- (3) a director of any other investment company managed by any of the same investment managers; or
- (4) a director of any other company in the same group as any of the same investment managers.
- 01/07/2005
Investment policies
LR 15.2.10
See Notes
- (1) An investment company that has an investment policy of principally investing its funds in another company or fund which invests in a portfolio of investments must satisfy the FSA that at all times its directors will comprise a majority of the directors of that other company or fund and will control the policy of that other company or fund to ensure that the other company or fund conforms with the investment policies and related requirements that apply to investment companies set out in LR 15.
- (2) Except as set out in paragraph (1) and except for property investment companies, the issuer must not take legal or management control of investments in its portfolio.
- (3) Except as set out in paragraph (1) no more than 20% of the total assets of the issuer (consolidated where applicable) may be lent to or invested in the securities of any one company or group (including loans to or shares in the issuer's own subsidiaries) at the time the investment or loan is made.
- (4) For the purposes of paragraph (3) any existing holding in the companies concerned must be aggregated with the proposed new investment.
- (5) The restriction set out in paragraph (3) does not apply to cash deposits awaiting investment.
- 01/07/2005
LR 15.2.11
See Notes
- (1) No more than 10%, in aggregate, of the value of the total assets of the issuer at the time of admission may be invested in other listed investment companies or listed investment trusts.
- (2) The restriction set out in paragraph (1) does not apply to investments in investment company or investment trusts which themselves have stated investment policies to invest no more than 15% of their total assets in other listed investment companies or listed investment trusts.
- 01/07/2005
LR 15.2.12
See Notes
- 01/07/2005
Income, surpluses and dividends
LR 15.2.13
See Notes
- (1) Dividends must not be paid unless they are covered by income received from underlying investments.
- (2) For the purposes set out in paragraph (1) a share of the profits of an associated company is unavailable unless and until distributed to the investment company.
- 01/07/2005
LR 15.2.14
See Notes
- 01/07/2005
When a company will be treated as an investment company
LR 15.2.15
See Notes
An open-ended investment company which does not regularly intervene in the market to keep the price of shares in line with net asset value and which:
will be treated as an investment company that is closed-ended for the purposes of this chapter.
- 01/07/2005
LR 15.2.16
See Notes
An open-ended investment company that:
- (1) is an unrecognised scheme; and
- (2) is treated as a closed-ended investment company;
must comply with the requirements for listing, the continuing obligations that are applicable to investment companies and the requirements set out in LR 15.3.2 G, LR 15.7.4 R and LR 15.7.10 G.
- 01/07/2005
Requirements for investment trusts
LR 15.2.17
See Notes
To be listed, an investment trust must comply with LR 2 and LR 6 with the following modifications and additional conditions:
- (1) the requirements set out in LR 15.2.2 R to LR 15.2.9 R;
- (2) LR 15.2.10R (1); and
- (3) LR 15.2.11 R.
- 01/07/2005
Investment in property
LR 15.2.18
See Notes
An investment company or an investment trust that invests or intends to invest 20% or more of its total assets in property must:
- (1) comply with the requirements for property companies set out in the listing rules; or
- (2) comply with the requirements for property investment companies set out in LR 15.5.
- 01/07/2005
LR 15.3
Listing applications and procedures
- 01/07/2005
LR 15.3.1
See Notes
An issuer to which this chapter applies that is seeking admission of its securities to the official list must:
- (1) comply with LR 3 (Listing applications) as applicable; and
- (2) produce either a prospectus in accordance with the requirements set out in the Prospectus Rules or listing particulars in accordance with the requirements set out in LR 4 (Listing particulars for professional securities market and certain other securities), as applicable.
- 01/07/2005
Sponsors
LR 15.3.2
See Notes
- 01/07/2005
LR 15.3.3
See Notes
- 01/07/2005
LR 15.3.4
See Notes
- 01/07/2005
LR 15.3.5
See Notes
- 01/07/2005
Multi-class fund or umbrella fund
LR 15.3.6
See Notes
- 01/07/2005
LR 15.3.7
See Notes
- 01/07/2005
LR 15.3.8
See Notes
- 01/07/2005
LR 15.3.9
See Notes
- 01/07/2005
Open-ended investment companies and authorised property unit trusts
LR 15.3.10
See Notes
- (1) This rule applies to:
- (2) A new applicant may apply to list such equity securities as it requires for future issues.
- 01/07/2005
LR 15.4
Continuing obligations
- 01/07/2005
Application
LR 15.4.1
See Notes
- (1) LR 15.4.2 R to LR 15.4.17 R apply to an investment company.
- (2) LR 15.4.18 R applies to an overseas investment company.
- (3) LR 15.4.19 R to LR 15.4.25 R applies to an investment trust.
- 01/07/2005
Investment companies
LR 15.4.2
See Notes
- 01/07/2005
Admission requirements with continuing application
LR 15.4.3
See Notes
- (1) An investment company must comply, at all times, with the requirements set out in:
- (a) LR 9.2.1 R to LR 9.2.3 R;
- (b) LR 9.2.15 R to LR 9.2.19 G; and
- (c) LR 15.2.5 R to LR 15.2.9 R.
- (2) An investment company must not invest more than 10%, in aggregate, of the value of the gross assets at the time the investment is made, in other listed investment companies or listed investment trusts.
- (3) The restriction in paragraph (2) does not apply to investments in investment companies or investment trusts which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed investment companies or listed investment trusts.
- 01/07/2005
Compliance with the Model Code
LR 15.4.4
See Notes
The FSA may dispense with the provisions of the Model Code to allow, during a close period:
- (1) dealings by persons discharging managerial responsibilities in an investment company;
- (2) purchases by the investment company of its own securities; and
- (3) sales of treasury shares for cash or transfers (except for sales and transfers by an investment company of treasury shares in the circumstances set out in LR 12.6.2 R);
if the FSA is satisfied that all inside information which the directors and the company may have in periods leading up to an announcement of results has previously been notified to a RIS.
- 01/07/2005
LR 15.4.5
See Notes
To obtain a dispensation under LR 15.4.4 R an investment company should:
- (1) calculate, on a weekly or more frequent basis, the net asset value in respect of each class of security in which it is proposed to deal; and
- (2) notify such calculations to a RIS; or
- (3) publish, after the relevant period end, all price sensitive information which is to be included in the forthcoming results statement.
- 01/07/2005
LR 15.4.6
See Notes
For the purposes of LR 15.4.5G (1) the calculation of net asset value should:
- (1) be in respect of not less than 90% of the company's gross assets; and
- (2) comply with industry accepted standards.
- 01/07/2005
LR 15.4.7
See Notes
An investment company which:
- (1) has significant interests in unquoted securities or unregulated investments; or
- (2) derives significant revenues from commercial businesses;
is unlikely to be granted a dispensation under LR 15.4.4 R.
- 01/07/2005
LR 15.4.8
See Notes
- 01/07/2005
Rights as between holders and communication with holders
LR 15.4.9
See Notes
- 01/07/2005
Notification requirements
LR 15.4.10
See Notes
- 01/07/2005
LR 15.4.11
See Notes
An investment company must notify a RIS of the following:
- (1) within two business days of the end of each calendar month, a list of all investments in other listed investment companies and listed investment trusts, as at the last business day of that month, which themselves do not have stated investment policies to invest no more than 15% of their total assets in other listed investment companies or listed investment trusts; and
- (2) within two business days of the end of each quarter, a list of all investments with a value greater than 5% of the company's total assets and at least the 10 largest investments as at the last business day of that quarter.
- 01/07/2005
Financial information
LR 15.4.12
See Notes
In addition to the requirements of LR 9.8 (Annual report and accounts) an investment company must include in its annual report and accounts:
- (1) a statement, set out in a prominent position, as to whether in the opinion of the directors the continuing appointment of the investment manager on the terms agreed is in the interests of shareholders as a whole, together with a statement of the reasons for this view;
- (2) a summary of the principal contents of any agreements between the investment company and each of the investment managers, including but not limited to any provisions relating to compensation payable in the event of termination of the agreement;
- (3) the name of the investment managers together with an indication of the terms and duration of their appointment, the basis for their remuneration and any arrangements relating to the termination of their appointment; and
- (4) a list of all investments with a value greater than 5% of the investment company's investment portfolio, and at least the 10 largest investments.
- 01/07/2005
LR 15.4.13
See Notes
The list described in LR 15.4.12R (4) should include, with comparative figures where relevant:
- (1) the value of each investment; and
- (2) for each investment which is not quoted on a stock exchange the following information:
- (a) a brief description of the business;
- (b) the proportion of capital owned or intended to be owned;
- (c) the cost of the investment and aggregate market value, if any, at the latest practicable date;
- (d) a director's valuation at the latest practicable date, if different from the value in paragraph (c) or if there is no market value;
- (e) the earnings per share for the latest audited financial year;
- (f) the dividend per share received in the most recent financial year, including any abnormal dividends or other payments;
- (g) dividend cover or underlying earnings for the latest audited financial year;
- (h) the net assets attributable to the investment as at the date of the latest audited balance sheet; and
- (i) an analysis of any provision for diminution in value of investments, naming the investments against which provision has been made and stating in respect of each investment:
- (i) the cost;
- (ii) any provision made;
- (iii) the book value; and
- (iv) the reason for the provision.
- 01/07/2005
LR 15.4.14
See Notes
In addition to the requirements in LR 9 (Continuing obligations) for half-yearly reports and preliminary statements of annual results an investment company must include information showing the split between:
- (1) dividend and interest received; and
- (2) other forms of income (including income of associated companies).
- 01/07/2005
LR 15.4.15
See Notes
For an investment company,
- (1) LR 9.8.8 R does not apply in respect of the Combined Code; and
- (2) LR 9.8.6R (6) does not apply in respect of principles B.1 to B.2 and provisions B.1.1 to B.1.6 and B.2.1 to B.2.4 of the Combined Code except to the extent that they relate specifically to non-executive directors.
- 01/07/2005
Transactions with related parties
LR 15.4.16
See Notes
- 01/07/2005
LR 15.4.17
See Notes
- 01/07/2005
Overseas investment companies
LR 15.4.18
See Notes
- (1) An overseas investment company with a primary listing is not required to have a registrar situated in the United Kingdom if it has a transfer agent in the United Kingdom that has authority to remit transfers to the overseas registrar.
- (2) Any change in transfer agent must be notified to a RIS as soon as possible.
- 01/07/2005
Investment trusts
LR 15.4.19
See Notes
- 01/07/2005
LR 15.4.20
See Notes
An investment trust must comply with:
- (1) LR 15.2.5 R to LR 15.2.9 R;
- (2) LR 15.4.4 R to LR 15.4.9 R; and
- (3) LR 15.4.11 R to LR 15.4.15 R.
- 01/07/2005
LR 15.4.21
See Notes
In addition to the requirement set out in LR 15.4.12 R, an investment trust must include in its annual report and accounts:
- (1) an analysis of the investment portfolio by broad industrial or commercial sector;
- (2) an analysis of the investment portfolio between equity shares, convertible securities, fixed income securities and other investments;
- (3) an analysis of income between dividends, interest and other forms of income;
- (4) an analysis, where material to an appreciation of the investment trust's financial position, of realised and unrealised profits and losses as between investments quoted on a stock exchange and those that are not quoted on a stock exchange; and
- (5) either:
- (a) a statement confirming that:
- (i) HM Revenue and Customs has approved it as an investment trust for the purpose of section 842 of the Income and Corporation Taxes Act 1988, specifying the last accounting period in respect of which such approval has been given; and
- (ii) the investment trust has subsequently directed its affairs so as to continue to be so approved; or
- (b) a statement, in the case of a newly listed investment trust confirming that:
- (i) the investment trust has announced that it will direct its affairs so as to enable it to seek approval from the HM Revenue and Customs; and
- (ii) it has subsequently directed its affairs so as to enable it to be so approved.
- 01/07/2005
LR 15.4.22
See Notes
- 01/07/2005
Investment companies that are closed ended
LR 15.4.23
See Notes
- (1) Unless authorised by the shareholders, an investment company that is closed-ended may not issue further shares of the same class as existing shares for cash at a price below the net asset value per share of those shares unless they are first offered pro rata to existing holders of shares of that class.
- (2) When calculating the net asset value per share treasury shares held by the company should not to be taken into account.
- 01/07/2005
Significant transactions
LR 15.4.24
See Notes
LR 10 (Significant transactions) applies to:
- (1) investment trusts; and
- (2) closed-ended investment companies;
excluding any transaction that falls within the stated investment policies of the investment trust or closed-ended investment company.
- 01/07/2005
Transactions with related parties
LR 15.4.25
See Notes
- 01/07/2005
LR 15.5
Property investment companies
- 01/07/2005
Application
LR 15.5.1
See Notes
- 01/07/2005
Requirements for listing - general
LR 15.5.2
See Notes
To be listed, a property investment company must comply with LR 2 (Requirements for listing - all securities) and LR 6 (Additional requirements for listing for equity securities), with the modifications and additional conditions set out in LR 15.5.3 G to LR 15.5.10 R and, if applicable, LR 15.5.11 R to LR 15.5.13 R, and either:
- (1) the requirements for listing for an investment company set out in LR 15.2.2 R to LR 15.2.14 R and LR 15.2.18 G; or
- (2) the requirements for listing for an investment trust set out in LR 15.2.2 R and LR 15.2.17 R to LR 15.2.18 G.
- 01/07/2005
Requirements for listing - corporate governance
LR 15.5.3
See Notes
- 01/07/2005
LR 15.5.4
See Notes
- 01/07/2005
Requirements for listing - investment policies and restrictions
LR 15.5.5
See Notes
- 01/07/2005
LR 15.5.6
See Notes
- 01/07/2005
LR 15.5.7
See Notes
- 01/07/2005
LR 15.5.8
See Notes
The term "long leasehold" in LR 15.5.7 R means a leasehold with over 60 years remaining either:
- 01/07/2005
LR 15.5.9
See Notes
- 01/07/2005
LR 15.5.10
See Notes
- 01/07/2005
Requirements for listing: new applicants
LR 15.5.11
See Notes
- 01/07/2005
LR 15.5.12
See Notes
- 01/07/2005
LR 15.5.13
See Notes
- 01/07/2005
Continuing obligations
LR 15.5.14
See Notes
- 01/07/2005
LR 15.5.15
See Notes
- (1) A property investment company must comply, at all times, with:
- (a) LR 15.5.3 G to LR 15.5.4 R;
- (b) LR 15.5.6 R to LR 15.5.8 R;
- (c) LR 15.5.9 R except that properties acquired by a property investment company need not be counted as part of the property portfolio until six months after acquisition;
- (d) LR 15.5.10 R; and
- (e) LR 15.5.13 R.
- (2) No single property (including all adjacent or contiguous properties) can, at the time of acquisition, constitute more than 15% of the gross assets of a property investment company, consolidated where applicable.
- 01/07/2005
LR 15.5.16
See Notes
- 01/07/2005
LR 15.5.17
See Notes
A property investment company's annual accounts must:
- (1) state whether LR 15.5.15 R has been met throughout the accounting period;
- (2) provide an explanation for any failures to meet LR 15.5.15 R throughout the accounting period; and
- (3) include a summary of the valuation, carried out in accordance with LR 15.5.18 R, of the property investment company's portfolio.
- 01/07/2005
LR 15.5.18
See Notes
A valuation required by LR 15.5.17R (3) must:
- (1) either:
- (a) be made in accordance with the Appraisal and Valuation Standards (5th edition) issued by the Royal Institution of Chartered Surveyors; or
- (b) where the valuation does not comply in all applicable respects with the Appraisal and Valuation Standards (5th edition) issued by the Royal Institution of Chartered Surveyors, include a statement which sets out a full explanation of such non-compliance; and
- (2) be carried out by an external valuer as defined in the Appraisal and Valuation Standards (5th edition) issued by the Royal Institution of Chartered Surveyors.
- 01/07/2005
LR 15.5.19
See Notes
The summary described in LR 15.5.17R (3) must include:
- (1) the total value of properties held at the year end;
- (2) totals of the cost of properties acquired;
- (3) the net book value of properties disposed of during the year; and
- (4) an indication of the geographical location and type of properties held at the year end.
- 01/07/2005
LR 15.5.20
See Notes
- 01/07/2005
Transactions
LR 15.5.21
See Notes
- 01/07/2005
Change of status
LR 15.5.22
See Notes
- 01/07/2005
LR 15.5.23
See Notes
- 01/07/2005
LR 15.6
Authorised property unit trusts
- 01/07/2005
Application
LR 15.6.1
See Notes
- 01/07/2005
Requirements for listing
LR 15.6.2
See Notes
To be listed, an authorised property unit trust must comply, with appropriate modifications to reflect the legal form of the trust, with LR 2 (Requirements for listing - all securities) and LR 6 (Additional requirements for listing for equity securities), with the following modifications and additional conditions:
- (1) the requirements set out in LR 15.2.2 R, LR 15.2.4 R, LR 15.5.3 G and LR 15.5.11 R; and
- (2) the trustee of the authorised property unit trust must be independent of the manager.
- 01/07/2005
Continuing obligations
LR 15.6.3
See Notes
An authorised property unit trust must comply with the following, modified as necessary to reflect the legal form of the trust:
- (1) LR 9 (Continuing obligations), as modified by the requirements set out in this section;
- (2) LR 15.4.10 R;
- (3) LR 15.4.12R (4);
- (4) LR 15.4.14 R; and
- (5) LR 15.7.7 R to LR 15.7.9 R.
- 01/07/2005
LR 15.6.4
See Notes
The following do not apply to an authorised property unit trust:
- (1) LR 9.2.3 R;
- (2) LR 9.3.11 R to LR 9.3.12 R;
- (3) LR 9.3.3R (3)(b) and (c);
- (4) LR 9.5.14 R;
- (5) LR 9.6.7 R to LR 9.6.15 G;
- (6) LR 10 (Significant transactions);
- (7) LR 11 (Related party transactions); and
- (8) LR 12.2.1 R.
- 01/07/2005
LR 15.6.5
See Notes
- (1) The Model Code applies in relation to persons discharging managerial responsibilities within the managers of an authorised property unit trust as if it were a company and such persons discharging managerial responsibilities were employed by it.
- (2) Paragraph 16 of the Model Code does not apply to dealings in an authorised property unit trust.
- 01/07/2005
LR 15.6.6
See Notes
- 01/07/2005
LR 15.6.7
See Notes
- 01/07/2005
LR 15.6.8
See Notes
- 01/07/2005
LR 15.6.9
See Notes
An authorised property unit trust must notify the following information to a RIS as soon as possible and in any event within three months of the end of each distribution or allocation period:
- (1) the total gross and net income per unit before charging fees to the authorised property unit trust;
- (2) the net amount per unit (after allowing for charges and adjustments) to be distributed or allocated, together with the gross equivalent attributable to the distribution or allocation period (specifying, where grouping is permitted by the trust deed or equivalent constitutional document, the amount per unit represented by income equalisation);
- (3) the date of the striking of the unit holders register balances; and
- (4) any date on and from which trading ex distribution (where applicable) will take place.
- 01/07/2005
LR 15.6.10
See Notes
An authorised property unit trust must notify the following information to a RIS as soon as possible:
- (1) any changes in the identity or control of the manager or trustee;
- (2) any change in the investment policy of the trust; and
- (3) any proposal to renew, vary, amalgamate or terminate the authorised property unit trust.
- 01/07/2005
LR 15.6.11
See Notes
- (1) A complete file must be maintained by the manager of all advertisements, brochures, leaflets and other documents issued by or on behalf of the manager with a view to effecting or stimulating sales or purchases of units.
- (2) The file must be produced to the FSA at any time on demand.
- 01/07/2005
LR 15.7
Open ended investment companies
- 01/07/2005
Application
LR 15.7.1
See Notes
- 01/07/2005
Requirements for listing
LR 15.7.2
See Notes
- 01/07/2005
LR 15.7.3
See Notes
- 01/07/2005
Publication
LR 15.7.4
See Notes
- 01/07/2005
LR 15.7.5
See Notes
- 01/07/2005
Continuing obligations
LR 15.7.6
See Notes
- 01/07/2005
LR 15.7.7
See Notes
- 01/07/2005
LR 15.7.8
See Notes
- 01/07/2005
LR 15.7.9
See Notes
- 01/07/2005
LR 15.7.10
See Notes
- (1) Any continuing obligation set out in LR 9 (Continuing obligations) or in this chapter, requiring an open-ended investment company which is an unrecognised scheme to publish information or send a document to the public, is modified to require the sending of such information or document only to the FSA and to other recipients permitted under the Act.
- (2) When sending any document as described in paragraph (1), an open-ended investment company should clearly mark the document "not for onward publication".
- 01/07/2005
LR 15.7.11
See Notes
- 01/07/2005