FINANCIAL SERVICES PART I GENERAL Citation, commencement and extent 1 1 These Regulations may be cited as the Open-Ended Investment Companies Regulations (Northern Ireland) 2004 and shall come into operation – a for the purposes of regulation 6, on 15th September 2004; and b for all other purposes, on 1st November 2004. 2 Subject to regulation 20(2)(b), these Regulations have effect in relation to any open-ended investment company which has its head office situated in Northern Ireland. Interpretation 2 1 In these Regulations – “ the Act ” means the Financial Services and Markets Act 2000 ; “the 1986 Order ” means the Companies (Northern Ireland) Order 1986 ; “the 1989 Order ” means the Insolvency (Northern Ireland) Order 1989 ; “annual general meeting” has the meaning given in regulation 37(1); “annual report” has the meaning given in regulation 66(1)(a); “authorisation order” means an order made by the Authority under regulation 14; “bearer shares” has the meaning given in regulation 48; “court” means the High Court; “depositary”, in relation to an open-ended investment company, has the meaning given in regulation 5(1); “the designated person” means the person designated in the company’s instrument of incorporation for the purposes of paragraph 3 of Schedule 4; “FSA rules” means any rules made by the Authority under regulation 6(1); “larger denomination share” has the meaning given in regulation 45(5); “officer”, in relation to an open-ended investment company, includes a director or any secretary or manager; “open-ended investment company” means a body incorporated by virtue of regulation 3(1) or a body treated as if it had been so incorporated by virtue of regulation 84(3)(a); “prospectus” has the meaning given in regulation 6(2); “relevant provision” means any requirement imposed by or under the Act; “register of shareholders” means the register kept under paragraph 1(1) of Schedule 3; “registrar” means the registrar of companies appointed under Article 653 of the 1986 Order; “scheme property”, in relation to an open-ended investment company, means the property subject to the collective investment scheme constituted by the company; “share certificate” has the meaning given in regulation 46(1); “smaller denomination” share has the meaning given in regulation 45(5); “transfer documents” has the meaning given in paragraph 4(3) of Schedule 4; “ the Tribunal ” means the Financial Services and Markets Tribunal; “the UCITS Directive ” means the Council Directive of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ( No. 85/611/ EEC ) ; and “umbrella company” means an open-ended investment company whose instrument of incorporation provides for such pooling as is mentioned in section 235(3)(a) of the Act (collective investment schemes) in relation to separate parts of the scheme property and whose shareholders are entitled to exchange rights in one part for rights in another. 2 In these Regulations any reference to a shareholder of an open-ended investment company is a reference to – a the person who holds the share certificate, or other documentary evidence of title relating to that share mentioned in regulation 48; and b the person whose name is entered on the company’s register of shareholders in relation to any share other than a bearer share. 3 In these Regulations, expressions which are also used in the Act have the same meaning as in the Act and expressions which are also used in the 1986 Order have the same meaning as in the 1986 Order. PART II FORMATION, SUPERVISION AND CONTROL General Open-ended investment company 3 1 If the Authority makes an authorisation order then, immediately upon the coming into effect of the order, the body to which the authorisation order relates is to be incorporated as an open-ended investment company (notwithstanding that, at the point of its incorporation by virtue of this paragraph, the body will not have any shareholders or property). 2 The name of an open-ended investment company is the name mentioned in the authorisation order made in respect of the company or, if it changes its name in accordance with these Regulations and FSA rules, its new name. Registration by the Authority 4 1 Upon making an authorisation order under regulation 14, the Authority must forthwith register – a the instrument of incorporation of the company; b a statement of the address of the company’s head office; c a statement, with respect to each person named in the application for authorisation as director of the company, of the particulars set out in regulation 13; and d a statement of the corporate name and registered or principal office of the person named in the application for authorisation as the depositary of the company. 2 In this regulation any reference to the instrument of incorporation of a company is a reference to the instrument of incorporation supplied for the purposes of regulation 14(1)(c). Safekeeping of scheme property by depositary 5 1 Subject to paragraph (2), all the scheme property of an open-ended investment company must be entrusted for safekeeping to a person appointed for the purpose (a depositary). 2 Nothing in paragraph (1) – a applies to any scheme property designated for the purposes of this regulation by FSA rules; b prevents a depositary from – i entrusting to a third party all or some of the assets in its safekeeping; or ii in a case falling within sub-paragraph (i), authorising the third party to entrust all or some of those assets to other specified persons. 3 Schedule 1 makes provision with respect to depositaries of open-ended investment companies. FSA rules 6 1 The Authority’s powers to make rules under section 247 (trust scheme rules) and section 248 (scheme particulars rules) of the Act in relation to authorised unit trust schemes are, subject to the provisions of these Regulations, exercisable in relation to open-ended investment companies – a for like purposes; and b subject to the same conditions. 2 In these Regulations any document which a person is required to submit and publish by virtue of rules made by the Authority under paragraph (1) for like purposes to those in section 248 of the Act is referred to as a prospectus. Modification or waiver of FSA rules 7 1 The Authority may, on the application or with the consent of any person to whom any FSA rules apply, direct that all or any of the FSA rules – a are not to apply to him as respects a particular open-ended investment company; or b are to apply to him as respects such a company with such modifications as may be specified in the direction. 2 The Authority may, on the application or with the consent of an open-ended investment company and its depositary acting jointly, direct that all or any of the FSA rules – a are not to apply to the company; or b are to apply to the company with such modifications as may be specified in the direction. 3 Section 148(3) to (9) and (11) of the Act (modification or waiver of rules) has effect in relation to a direction under paragraph (1) as it has effect in relation to a direction under section 148(2) of the Act but with the following modifications – a subsection (4)(a) is to be read as if the words by the authorised person were omitted; b any reference to the authorised person (except in subsection (4)(a)) is to be read as a reference to the person mentioned in paragraph (1); and c subsection (7)(b) is to be read, in relation to a shareholder, as if the word commercial were omitted. 4 Section 148(3) to (9) and (11) of the Act has effect in relation to a direction under paragraph (2) as it has effect in relation to a direction under section 148(2) of the Act but with the following modifications – a subsection (4)(a) is to be read as if the words by the authorised person were omitted; b subsections (7)(b), (8) and (11) are to be read as if the reference to the authorised person were a reference to each of the company and its depositary; c subsection (7)(b) is to be read, in relation to a shareholder, as if the word commercial were omitted; and d subsection (9) is to be read as if the reference to the authorised person were a reference to the company and its depositary acting jointly. Notices: general 8 Subject to the provisions of these Regulations – a section 387 of the Act (warning notices) applies to a warning notice given under any provision of these Regulations in the same way as it applies to a warning notice given under any provision of the Act; b section 388 of the Act (decision notices) applies to a decision notice given under any provision of these Regulations in the same way as it applies to a decision notice given under any provision of the Act; c section 389 of the Act (notices of discontinuance) applies to the discontinuance of the action proposed in a warning notice or the action to which a decision notice relates given under any provision of these Regulations in the same way as it applies to a warning notice or decision notice given under any provision of the Act; d section 390 of the Act (final notices) applies to a decision notice given under any provision of these Regulations in the same way as it applies to a decision notice given under any provision of the Act. Publication 9 Section 391 of the Act (publication) applies to the notices mentioned in regulation 8 in the same way as it applies to any such notice given under any provision of the Act. The Authority’s procedures 10 Section 395 of the Act (the Authority’s procedures) applies to the procedure relating to the Authority’s functions in relation to supervisory notices, warning notices and decision notices given under any provision of these Regulations. The Tribunal 11 Section 133 of the Act (proceedings: general provision) applies to any reference to the Tribunal under these Regulations as it applies to any reference to the Tribunal under the Act. Authorisation Applications for authorisation 12 1 Any application for an authorisation order in respect of a proposed open-ended investment company – a must be made in such manner as the Authority may direct; b must state with respect to each person proposed in the application as a director of the company the particulars set out in regulation 13; c must state the corporate name and registered or principal office of the person proposed in the application as depositary of the company; and d must contain or be accompanied by such other information as the Authority may reasonably require for the purpose of determining the application. 2 At any time after receiving an application and before determining it the Authority may require the applicant to furnish additional information. 3 Different directions may be given and different requirements imposed in relation to different applications. 4 Any information to be furnished to the Authority under this regulation must be in such form or verified in such manner as it may specify. 5 A person commits an offence if – a for the purposes of or in connection with any application under this regulation; or b in purported compliance with any requirement imposed on him by or under this regulation; he furnishes information which he knows to be false or misleading in a material particular or recklessly furnishes information which is false or misleading in a material particular. 6 A person guilty of an offence under paragraph (5) is liable – a on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both; b on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both. Particulars of directors 13 1 Subject to paragraph (2), an application for an authorisation order must contain the following particulars with respect to each person proposed as a director of the company – a in the case of an individual, his present name, any former name, his usual residential address, his nationality, his business occupation (if any), particulars of any other directorships held by him or which have been held by him and his date of birth; b in the case of a body corporate or Scottish firm, its corporate or firm name and the address of its registered or principal office. 2 The application need not contain particulars of a directorship – a which has not been held by a director at any time during the 5 years preceding the date on which the application is delivered to the Authority; b which is held by a director in a body corporate which is dormant and, if he also held that directorship for any period during those 5 years, which was dormant for the whole of that period; or c which was held by a director for any period during those 5 years in a body corporate which was dormant for the whole of that period. 3 For the purposes of paragraph (2), a body corporate is dormant during a period in which no significant transaction occurs; and it ceases to be dormant on the occurrence of such a transaction. 4 In paragraph (1)(a) – a name means a person’s Christian name (or other forename) and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them; b the reference to a former name does not include – i in the case of a peer, or an individual normally known by a British title, the name by which he was known previous to the adoption of or succession to the title; ii in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more; or iii in the case of a married woman, the name by which she was known previous to the marriage; and c the reference to directorships is a reference to directorships in any body corporate whether or not incorporated in Northern Ireland. 5 In paragraph (3) the reference to a significant transaction is, in relation to a company within the meaning of Article 3(1) of the 1986 Order, a reference to a significant accounting transaction within the meaning of section 257AA(5) of that Order. Authorisation 14 1 Where an application is duly made under regulation 12, the Authority may make an authorisation order in respect of an open-ended investment company if – a it is satisfied that the company will, on the coming into effect of the authorisation order, comply with the requirements in regulation 15; b it is satisfied that the company will, at that time, comply with the requirements of FSA rules; c it has been provided with a copy of the proposed company’s instrument of incorporation and a certificate signed by a solicitor to the effect that the instrument of incorporation complies with Schedule 2 and with such of the requirements of FSA rules as relate to the contents of that instrument of incorporation; d it has received a notification under regulation 18(3) from the registrar; and e in the case of a company which will, on the coming into effect of the authorisation order, not be an undertaking for collective investment in transferable securities within the meaning of the UCITS Directive, the company has made an application under Part IV of the Act for permission to carry on one or more regulated activities. 2 If the Authority makes an order under paragraph (1), it must give written notice of the order to the applicant. 3 In determining whether the requirement referred to in regulation 15(5) is satisfied in respect of any proposed director of a company, the Authority may take into account – a any matter relating to any person who is or will be employed by or associated with the proposed director, for the purposes of the business of the company; b if the proposed director is a body corporate, any matter relating to any director or controller of the body, to any other body corporate in the same group or to any director or controller of any such other body corporate; c if the proposed director is a partnership, any matter relating to any of the partners; and d if the proposed director is an unincorporated association, any matter relating to any member of the governing body of the association or any officer or controller of the association. 4 An application must be determined by the Authority before the end of the period of six months beginning with the date on which it receives a completed application. 5 The Authority may determine an incomplete application if it considers it appropriate to do so and, if it does so, it must determine the application within the period of twelve months beginning with the date on which it first receives the application. 6 The applicant may withdraw his application, by giving the Authority written notice, at any time before the Authority determines it. 7 An authorisation order must specify the date on which it is to come into effect. 8 Schedule 2 makes provision with respect to the contents, alteration and binding nature of the instrument of incorporation of an open-ended investment company. Requirements for authorisation 15 1 The requirements referred to in regulation 14(1)(a) are as follows. 2 The company and its instrument of incorporation must comply with the requirements of these Regulations and FSA rules. 3 The head office of the company must be situated in Northern Ireland. 4 The company must have at least one director. 5 The directors of the company must be fit and proper persons to act as such. 6 If the company has only one director, that director must be a body corporate which is an authorised person and which has permission under the Act to act as sole director of an open-ended investment company. 7 If the company has two or more directors, the combination of their experience and expertise must be such as is appropriate for the purposes of carrying on the business of the company. 8 The person appointed as the depositary of the company – a must be a body corporate incorporated in the United Kingdom or another EEA State; b must have a place of business in the United Kingdom; c must have its affairs administered in the country in which it is incorporated; d must be an authorised person; e must have permission under Part IV of the Act to act as the depositary of an open-ended investment company; and f must be independent of the company and of the persons appointed as directors of the company. 9 The name of the company must not be undesirable or misleading. 10 The aims of the company must be reasonably capable of being achieved. 11 The company must meet one or both of the following requirements – a shareholders are entitled to have their shares redeemed or repurchased upon request at a price related to the net value of the scheme property and determined in accordance with the company’s instrument of incorporation and FSA rules; or b shareholders are entitled to sell their shares on an investment exchange at a price not significantly different from that mentioned in sub-paragraph (a). Representations against refusal of authorisation 16 1 If the Authority proposes to refuse an application made under regulation 12, it must give the applicant a warning notice. 2 If the Authority decides to refuse the application – a it must give the applicant a decision notice; and b the applicant may refer the matter to the Tribunal. Certificates 17 1 If an open-ended investment company which complies with the conditions necessary to enable it to enjoy the rights conferred by the UCITS Directive so requests, the Authority may issue a certificate to the effect that the company complies with those conditions. 2 Such a certificate may be issued on the making of an authorisation order in respect of the company or at any subsequent time. Names Registrar’s approval of names 18 1 Where, in respect of a proposed open-ended investment company, it appears to the Authority that the requirements of regulation 14(1)(a) to (c) and (e) are or will be met, the Authority must notify the registrar of the name by which it is proposed that the company should be incorporated. 2 Every open-ended investment company must obtain the Authority’s approval to any proposed change in the name by which the company is incorporated and the Authority must notify the registrar of the proposed name. 3 If it appears to the registrar that the provisions of regulation 19(1) are not contravened in relation to the proposed name, he must notify the Authority to that effect. Prohibition on certain names 19 1 No open-ended investment company is to have a name that – a includes any of the following words or expressions, that is to say – i limited, unlimited or public limited company; or ii European Economic Interest Grouping or any equivalent set out in Schedule 3 to the European Economic Interest Grouping Regulations (Northern Ireland) 1989 ; b includes an abbreviation of any of the words or expressions referred to in sub-paragraph (a); or c is the same as any other name appearing in the registrar’s index of company names. 2 In determining for the purposes of paragraph (1)(c) whether one name is the same as another, there are to be disregarded – a the definite article, where it is the first word of the name; b the following words and expressions where they appear at the end of the name – company ; and company ; company limited ; limited ; unlimited ; public limited company ; “European Economic Interest Grouping” or any equivalent set out in Schedule 3 to the European Economic Interest Grouping Regulations (Northern Ireland) 1989; investment company with variable capital ; open-ended investment company ; abbreviations of any of those words or expressions where they appear at the end of the name; and type and case of letters, accents, spaces between letters and punctuation marks; and “and” and “&” are to be taken as the same. Registrar’s index of company names 20 1 Upon making an authorisation order in respect of an open-ended investment company or upon approving any change in the name of such a company, the Authority must notify the registrar of the name by which the company is incorporated or, as the case may be, of the company’s new name. 2 Article 663 of the 1986 Order (registrar’s index of company and corporate names) has effect as if the bodies listed in paragraph (1) of that Article included – a open-ended investment companies in respect of which an authorisation order has come into effect; and b collective investment schemes which are open-ended investment companies and which have a head office situated in Great Britain. Alterations The Authority’s approval for certain changes in respect of a company 21 1 An open-ended investment company must give written notice to the Authority of – a any proposed alteration to the company’s instrument of incorporation; b any proposed alteration to the company’s prospectus which, if made, would be significant; c any proposed reconstruction or amalgamation involving the company; d any proposal to wind up the affairs of the company otherwise than by the court; e any proposal to replace a director of the company, to appoint any additional director or to decrease the number of directors in post; and f any proposal to replace the depositary of the company. 2 Any notice given under paragraph (1)(a) must be accompanied by a certificate signed by a solicitor to the effect that the change in question will not affect the compliance of the instrument of incorporation with Schedule 2 and with such of the requirements of FSA rules as relate to the contents of that instrument. 3 Effect must not be given to any proposal falling within paragraph (1) unless – a the Authority, by written notice, has given its approval to the proposal; or b one month, beginning with the date on which notice of the proposal was given, has expired without the company or the depositary having received from the Authority a warning notice under regulation 22 in respect of the proposal. 4 No change falling within paragraph (1)(e) may be made if any of the requirements set out in regulation 15(4) to (7) and (8)(f) would not be satisfied if the change were made and no change falling within paragraph (1)(f) may be made if any of the requirements in regulation 15(8) would not be satisfied if the change were made. Procedure when refusing approval of proposed changes 22 1 If the Authority proposes to refuse approval of a proposal to replace the depositary, or any director, of an open-ended investment company, it must give a warning notice to the company. 2 If the Authority proposes to refuse approval of any other proposal falling within regulation 21, it must give separate warning notices to the company and its depositary. 3 To be valid the warning notice must be received by that person before the end of one month beginning with the date on which notice of the proposal was given. 4 If, having given a warning notice to a person, the Authority decides to refuse approval – a it must give him a decision notice; and b he may refer the matter to the Tribunal. 5 If, having given a warning notice to a person, the Authority decides to approve the proposal, it must give him a decision notice. Ending of authorisation Ending of authorisation 23 1 The Authority may revoke an authorisation order if it appears to it that – a any requirement for the making of the order is no longer satisfied; b the company, any of its directors or its depositary – i has contravened any relevant provision; or ii has, in purported compliance with any such provision, knowingly or recklessly given the Authority information which is false or misleading in a material particular; c no regulated activity has been carried on in relation to the company for the previous twelve months; or d it is desirable to revoke the authorisation order in order to protect the interests of shareholders or potential shareholders in the company. 2 For the purposes of paragraph (1)(d), the Authority may take into account any matter relating to – a the company or its depositary; b any director or controller of the depositary; c any person employed by or associated, for the purposes of the business of the company, with the company or its depositary; d any director of the company; e any person exercising influence over any director of the company or its depositary; f any body corporate in the same group as any director of the company or its depositary; g any director of any such body corporate; h any person exercising influence over any such body corporate; i any person who would be such a person as is mentioned in regulation 14(3)(a) to (d) were it to apply to a director as it applies to a proposed director. 3 Before revoking any authorisation order that has come into effect, the Authority must ensure that such steps as are necessary and appropriate to secure the winding up of the company (whether by the court or otherwise) have been taken. Procedure 24 1 If the Authority proposes to make an order revoking an authorisation order (a revoking order), it must give separate warning notices to the company and its depositary. 2 If, having given warning notices, the Authority decides to make a revoking order it must without delay give the company and its depositary a decision notice and either of them may refer the matter to the Tribunal. 3 Sections 393 and 394 of the Act apply to a warning notice or a decision notice given in accordance with this regulation. Powers of intervention Directions 25 1 The Authority may give a direction under this regulation if it appears to the Authority that – a one or more requirements for the making of an authorisation order are no longer satisfied; b the company, any of its directors or its depositary – i has contravened or is likely to contravene any relevant provision; or ii has, in purported compliance with any such provision, knowingly or recklessly given the Authority information which is false or misleading in a material particular; or c it is desirable to give a direction in order to protect the interests of shareholders or potential shareholders in the company. 2 A direction under this regulation may – a require the company to cease the issue or redemption, or both the issue and redemption, of shares or any class of shares in the company; b in the case of a director of the company who is the designated person, require that director to cease transfers to or from, or both to and from, his own holding of shares, or of any class of shares, in the company; c in the case of an umbrella company, require that investments made in respect of one or more parts of the scheme property which are pooled separately be realised and, following the discharge of such liabilities of the company as are attributable to the relevant part or parts of the scheme property, that the resulting funds be distributed to shareholders in accordance with FSA rules; d require any director of the company to present a petition to the court to wind up the company; or e require that the affairs of the company be wound up otherwise than by the court. 3 Subject to paragraph (4), if the authorisation order is revoked, the revocation does not affect the operation of any direction under this regulation which is then in force; and a direction under this regulation may be given in relation to a company in the case of which an authorisation order has been revoked if a direction under this regulation was already in force at the time of revocation. 4 Where a winding-up order has been made by the court, no direction under this regulation is to have effect in relation to the company concerned. 5 For the purposes of paragraph (1)(c), the Authority may take into account any matter relating to any of the persons mentioned in regulation 23(2). 6 If a person contravenes a direction under this regulation, section 150 of the Act (actions for damages) applies to the contravention as it applies to a contravention mentioned in that section. 7 The Authority may, on its own initiative or on the application of the company or its depositary, revoke or vary a direction given under this regulation if it appears to the Authority – a in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force; b in the case of variation, that the direction should take effect or continue in force in a different form. Applications to the court 26 1 This regulation applies if the Authority could give a direction under regulation 25 in relation to an open-ended investment company. 2 The Authority may apply to the court for an order removing the depositary or any director of the company and replacing any such person with a person or persons nominated by the Authority. 3 The Authority may nominate a person for the purposes of paragraph (2) only if it is satisfied that, if the order were made, the requirements of paragraphs (4) to (7) or, as the case may be, of paragraph (8) of regulation 15 would be met. 4 If it appears to the Authority that there is no person whom it may nominate for the purposes of paragraph (2), it may apply to the court for an order removing the director in question or the depositary (or both) and appointing an authorised person to wind up the company. 5 On an application under this regulation the court may make such order as it thinks fit. 6 The court may, on the application of the Authority, rescind any such order as is mentioned in paragraph (4) and substitute such an order as is mentioned in paragraph (2). 7 The Authority must – a give written notice of the making of an application under this regulation to – i the company; ii its depositary; and iii where the application seeks the removal of any director of the company, that director; and b take such steps as it considers appropriate for bringing the making of the application to the attention of the shareholders of the company. Procedure on giving directions under regulation 25 and varying them on Authority’s own initiative 27 1 A direction takes effect – a immediately, if the notice given under paragraph (3) states that that is the case; b on such date as may be specified in the notice; or c if no date is specified in the notice, when the matter to which it relates is no longer open to review. 2 A direction may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to the ground on which it is exercising its power under regulation 25, considers that it is necessary for the direction to take effect immediately (or on that date). 3 If the Authority proposes to give a direction under regulation 25, or gives such a direction with immediate effect, it must give separate written notices to the company and its depositary. 4 The notice must – a give details of the direction; b inform the person to whom it is given of when the direction takes effect; c state the Authority’s reasons for giving the direction and for its determination as to when the direction takes effect; d inform the person to whom it is given that he may make representations to the Authority within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and e inform him of his right to refer the matter to the Tribunal. 5 If the direction imposes a requirement under regulation 25(2)(a) or (b), the notice must state that the requirement has effect until – a a specified date; or b a further direction. 6 If the direction imposes a requirement under regulation 25(2)(d) or (e), the petition must be presented (or, as the case may be, the company must be wound up) – a by a date specified in the notice; or b if no date is specified, as soon as possible. 7 The Authority may extend the period allowed under the notice for making representations. 8 If, having considered any representations made by a person to whom the notice was given the Authority decides – a to give the direction in the way proposed, or b if it has been given, not to revoke the direction, it must give separate written notices to the company and its depositary. 9 If, having considered any representations made by a person to whom the notice was given, the Authority decides – a not to give the direction in the way proposed, b to give the direction in a way other than that proposed, or c to revoke a direction which has effect, it must give separate written notices to the company and its depositary. 10 A notice given under paragraph (8) must inform the person to whom it is given of his right to refer the matter to the Tribunal. 11 A notice under paragraph (9)(b) must comply with paragraph (4). 12 If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference. 13 This regulation applies to the variation of a direction on the Authority’s own initiative as it applies to the giving of a direction. 14 For the purposes of paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8) of the Act. 15 Section 395 of the Act (the Authority’s procedures) has effect as if subsection (13) included a reference to a notice given in accordance with paragraph (3), (8) or (9)(b). Procedure: refusal to revoke or vary direction 28 1 If on an application under regulation 25(7) for a direction to be revoked or varied the Authority proposes – a to vary the direction otherwise than in accordance with the application, or b to refuse to revoke or vary the direction, it must give the applicant a warning notice. 2 If the Authority decides to refuse to revoke or vary the direction – a it must give the applicant a decision notice; and b the applicant may refer the matter to the Tribunal. Procedure: revocation of direction and grant of request for variation 29 1 If the Authority decides on its own initiative to revoke a direction under regulation 25 it must give separate written notices of its decision to the company and its depositary. 2 If on an application made under regulation 25(7) for a direction to be revoked or varied, the Authority decides to revoke or vary it in accordance with the application, it must give the applicant written notice of its decision. 3 A notice under this regulation must specify the date on which the decision take effect. 4 The Authority may publish such information about the revocation or variation, in such way, as it considers appropriate. Investigations Power to investigate 30 1 The Authority or the Department may appoint one or more competent persons to investigate and report on the affairs of, or of any director or depositary of, an open-ended investment company if it appears to either of them that it is in the interests of shareholders or potential shareholders of the company to do so or that the matter is of public concern. 2 A person appointed under paragraph (1) to investigate the affairs of, or of any director or depositary of, a company may also, if he thinks it necessary for the purposes of that investigation, investigate the affairs of (or of the directors, depositary, trustee or operator of) – a an open-ended investment company the directors of which include any of the directors of the company whose affairs are being investigated by virtue of that paragraph; b an open-ended investment company the directors of which include any of the directors of the depositary whose affairs are being investigated by virtue of that paragraph; c an open-ended investment company the depositary of which is – i the same as the depositary of the company whose affairs are being investigated by virtue of that paragraph; or ii the depositary whose affairs are being investigated by virtue of that paragraph; d an open-ended investment company the directors of which include – i the director whose affairs are being investigated by virtue of that paragraph; or ii any director of a body corporate which is the director whose affairs are being investigated by virtue of that paragraph; e a collective investment scheme the manager, depositary or operator of which is a director of the company whose affairs are being investigated by virtue of that paragraph; f a collective investment scheme the trustee of which is – i the same as the depositary of the company whose affairs are being investigated by virtue of that paragraph; or ii the depositary whose affairs are being investigated by virtue of that paragraph; or g a collective investment scheme the manager, depositary or operator of which is – i the director whose affairs are being investigated by virtue of that paragraph; or ii a director of a body corporate which is the director whose affairs are being investigated by virtue of that paragraph. 3 If a person (A) appointed to conduct an investigation under this regulation considers that a person (B) is or may be able to give information which is relevant to the investigation, A may require B – a to produce to A any documents in B’s possession or under his control which appear to A to be relevant to that investigation; b to attend before A; and c otherwise to give A all such assistance in connection with the investigation which B is reasonably able to give; and it is B’s duty to comply with that requirement. 4 Subsections (5) to (9) of section 170 of the Act (investigations: general) apply if – a the Authority appoints a person under this regulation to conduct an investigation on its behalf; or b the Department appoints a person under this regulation to conduct an investigation on its behalf; as they apply in the cases mentioned in subsection (1) of that section. 5 Section 174 of the Act (admissibility of statements made to investigators) applies to a statement made by a person in compliance with a requirement imposed on him under this regulation as it applies to a statement mentioned in that section. 6 Subsections (2) to (4) and (6) of section 175 (information and documents: supplementary provisions) and section 177 of the Act (offences) have effect as if this regulation were contained in Part XI of the Act (information gathering and investigations). 7 Subsections (1) to (8) of section 176 of the Act (entry of premises under warrant) apply in relation to a person appointed under paragraph (1) as if – a references to the Secretary of State were references to the Department; b references to an investigator were references to a person so appointed; c references to an information requirement were references to a requirement imposed under this regulation by a person so appointed; d the premises mentioned in section 176(3)(a) were the premises of a person whose affairs are the subject of an investigation under this regulation or of an appointed representative of such a person. 8 No person may be required under this regulation to disclose information or produce a document in respect of which he owes an obligation of confidence by virtue of carrying on a banking business unless – a the imposition of the requirement is authorised by the Authority or the Department (as the case may be) or the person to whom the obligation of confidence is owed; or b the person to whom it is owed is – i a director or depositary of any open-ended investment company which is under investigation; or ii any other person whose own affairs are under investigation. Winding up Winding up by the court 31 1 Where an open-ended investment company is wound up as an unregistered company under Part VI of the 1989 Order, the provisions of that Order apply for the purposes of the winding up with the following modifications. 2 A petition for the winding up of an open-ended investment company may be presented by the depositary of the company as well as by any person authorised under Article 104 (application for winding up) or Article 104A of the 1989 Order (petition for winding up on grounds of public interest), as those Articles apply by virtue of Part VI of that Order, to present a petition for the winding up of the company. 3 Where a petition for the winding up of an open-ended investment company is presented by a person other than the Authority – a that person must serve a copy of the petition on the Authority; and b the Authority is entitled to be heard on the petition. 4 If, before the presentation of a petition for the winding up by the court of an open-ended investment company as an unregistered company under Part VI of the 1989 Order, the affairs of the company are being wound up otherwise than by the court – a Article 109(2) of the 1989 Order (commencement of winding up by the court) is not to apply; and b any winding up of the company by the court is to be deemed to have commenced – i at the time at which the Authority gave its approval to a proposal mentioned in paragraph (1)(d) of regulation 21; or ii in a case falling within paragraph (3)(b) of that regulation, on the day following the end of the one-month period mentioned in that paragraph. Dissolution on winding up by the court 32 1 Article 146(7) of the 1989 Order (final meeting of creditors and vacation of office by liquidator), as that Article applies by virtue of Part VI of that Order (winding up of unregistered companies) has effect, in relation to open-ended investment companies, as if the reference to the registrar was a reference to the Authority. 2 Where, in respect of an open-ended investment company, the Authority receives – a a notice given for the purposes of Article 146(7) of the 1989 Order (as aforesaid); or b a notice from the official receiver that the winding up, by the court, of the company is complete; the Authority must, on receipt of the notice, forthwith register it and, subject to the provisions of this regulation, at the end of the period of three months beginning with the day of the registration of the notice, the company is to be dissolved. 3 The Department may, on the application of the official receiver or any other person who appears to the Department to be interested, give a direction deferring the date at which the dissolution of the company is to take effect for such period as the Department thinks fit. 4 An appeal to the court lies from any decision of the Department on an application for a direction under paragraph (3). 5 It is the duty of the person – a on whose application a direction is given under paragraph (3); or b in whose favour an appeal with respect to an application for such a direction is determined; not later than seven days after the giving of the direction, or the determination of the appeal, to deliver to the Authority for registration a copy of the direction or determination. 6 If a person without reasonable excuse fails to deliver a copy as required by paragraph (5), he is guilty of an offence. 7 A person guilty of an offence under paragraph (6) is liable, on summary conviction – a to a fine not exceeding level 1 on the standard scale; and b on a second or subsequent conviction instead of the penalty set out in sub-paragraph (a), to a fine of £100 for each day on which the contravention is continued. Dissolution in other circumstances 33 1 Where the affairs of an open-ended investment company have been wound up otherwise than by the court, the Authority must, as soon as is reasonably practicable after the winding up is complete, register that fact and, subject to the provisions of this regulation, at the end of the period of three months beginning with the day of the registration, the company is to be dissolved. 2 The court may, on the application of the Authority or the company, make an order deferring the date at which the dissolution of the company is to take effect for such period as the court thinks fit. 3 It is the duty of the company, on whose application an order of the court under paragraph (2) is made, to deliver to the Authority, not later than seven days after the making of the order, a copy of the order for registration. 4 Where any company is dissolved by virtue of paragraph (1), any sum of money (including unclaimed distributions) standing to the account of the company at the date of the dissolution must on such date as is determined in accordance with FSA rules, be paid into court. PART III CORPORATE CODE Organs Directors 34 1 On the coming into effect of an authorisation order in respect of an open-ended investment company, the persons proposed in the application under regulation 12 as directors of the company are deemed to be appointed as its first directors. 2 Subject to regulations 21 and 26, any subsequent appointment as a director of a company must be made by the company in general meeting, save that the directors of the company may appoint a person to act as director to fill any vacancy until such time as the next annual general meeting of the company takes place. 3 Any act of a director is valid notwithstanding – a any defect that may thereafter be discovered in his appointment or qualifications; or b that it is afterwards discovered that his appointment had terminated by virtue of any provision contained in FSA rules which requires a director to retire upon attaining a specified age. 4 The business of a company must be managed – a where a company has only one director, by that director; or b where a company has more than one director, by the directors but subject to any provision contained in FSA rules as to the allocation between the directors of responsibilities for the management of the company (including any provision there may be as to the allocation of such responsibility to one or more directors to the exclusion of others). 5 Subject to the provisions of these Regulations, FSA rules and the company’s instrument of incorporation, the directors of a company may exercise all the powers of the company. Directors to have regard to interests of employees 35 1 The matters to which a director of an open-ended investment company must have regard in the performance of his functions include the interests of the company’s employees in general, as well as the interests of its shareholders. 2 The duty imposed by this regulation on a director is owed by him to the company (and the company alone) and is enforceable in the same way as any other fiduciary duty owed to a company by its directors. Inspection of directors' service contracts 36 1 Every open-ended investment company must keep at an appropriate place – a in the case of each director whose contract of service with the company is in writing, a copy of that contract; and b in the case of each director whose contract of service with the company is not in writing, a written memorandum setting out its terms. 2 All copies and memoranda kept by a company in accordance with paragraph (1) must be kept at the same place. 3 The following are appropriate places for the purposes of paragraph (1) – a the company’s head office; b the place where the company’s register of shareholders is kept; and c where the designated person is a director of the company and is a body corporate, the registered or principal office of that person. 4 Every copy and memorandum required by paragraph (1) to be kept must be open to the inspection of any shareholder of the company. 5 If such an inspection is refused, the court may by order compel an immediate inspection of the copy or memorandum concerned. 6 Every copy and memorandum required by paragraph (1) to be kept must be made available by the company for inspection by any shareholder at the company’s annual general meeting. 7 Paragraph (1) applies to a variation of a director’s contract of service as it applies to the contract. General meetings 37 1 Subject to paragraph (2), every open-ended investment company must in each year hold a general meeting (annual general meeting) in addition to any other meetings, whether general or otherwise, it may hold in that year. 2 If a company holds its first annual general meeting within 18 months of the date on which the authorisation order made by the Authority in respect of the company comes into effect, paragraph (1) does not require the company to hold any other meeting as its annual general meeting in the year of its incorporation or in the following year. 3 Subject to paragraph (2), not more than 15 months may elapse between the date of one annual general meeting of a company and the date of the next. Capacity of company 38 1 The validity of an act done by an open-ended investment company cannot be called into question on the ground of lack of capacity by reason of anything in these Regulations, FSA rules or the company’s instrument of incorporation. 2 Nothing in paragraph (1) affects the duty of the directors to observe any limitations on their powers. Power of directors and general meeting to bind the company 39 1 In favour of a person dealing in good faith, the following powers, that is to say – a the power of the directors of an open-ended investment company (whether or not acting as a board) to bind the company, or authorise others to do so; and b the power of such a company in general meeting to bind the company, or authorise others to do so; are deemed to be free of any limitation under the company’s constitution. 2 For the purposes of this regulation – a a person deals with a company if he is party to any transaction or other act to which the company is a party; b subject to paragraph (4), a person is not to be regarded as acting in bad faith by reason only of his knowing that, under the company’s constitution, an act is beyond any of the powers referred to in paragraph (1)(a) or (b); and c subject to paragraph (4), a person is presumed to have acted in good faith unless the contrary is proved. 3 The reference in paragraph (1) to any limitation under the company’s constitution on the powers therein set out includes any limitation deriving from these Regulations, from FSA rules or from a resolution of the company in general meeting or of a meeting of any class of shareholders. 4 Sub-paragraphs (b) and (c) of paragraph (2) do not apply where – a by virtue of a limitation deriving from these Regulations or from FSA rules, an act is beyond any of the powers referred to in paragraph (1)(a) or (b); and b the person in question – i has actual knowledge of that fact; or ii has deliberately failed to make enquiries in circumstances in which a reasonable and honest person would have done so. 5 Paragraph (1) does not affect any liability incurred by the directors or any other person by reason of the directors exceeding their powers. No duty to enquire as to capacity etc. 40 Subject to regulation 39(4)(b)(ii), a party to a transaction with an open-ended investment company is not bound to enquire – a as to whether the transaction is permitted by these Regulations, FSA rules or the company’s instrument of incorporation; or b as to any limitation on the powers referred to in regulation 39(1)(a) or (b). Exclusion of deemed notice 41 A person is not to be taken to have notice of any matter merely because of its being disclosed in any document made available by an open-ended investment company for inspection; but this does not affect the question whether a person is affected by notice of any matter by reason of a failure to make such enquiries as ought reasonably to be made. Restraint and ratification by shareholders 42 1 A shareholder of an open-ended investment company may bring proceedings to restrain the doing of an act which but for regulation 38(1) would be beyond the company’s capacity. 2 Paragraph (1) of regulation 39 does not affect any right of a shareholder of an open-ended investment company to bring proceedings to restrain the doing of an act which is beyond any of the powers referred to in that paragraph. 3 No proceedings may be brought under paragraph (1) in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company; and paragraph (2) does not have the effect of enabling proceedings to be brought in respect of any such act. 4 Any action by the directors of a company – a which, but for regulation 38(1), would be beyond the company’s capacity; or b which is within the company’s capacity but beyond the powers referred to in regulation 39(1)(a); may only be ratified by a resolution of the company in general meeting. 5 A resolution ratifying such action does not affect any liability incurred by the directors or any other person, relief from any such liability requiring agreement by a separate resolution of the company in general meeting. 6 Nothing in this regulation affects any power or right conferred by or arising under section 150 (actions for damages) or section 380, 382 or 384 of the Act (injunctions and restitution orders). Events affecting company status 43 1 Where either of the conditions mentioned in paragraph (2) is satisfied, an open-ended investment company is not entitled to rely against other persons on the happening of any of the following events – a any alteration of the company’s instrument of incorporation; b any change among the directors of the company; c as regards service of any document on the company, any change in the situation of the head office of the company; or d the making of a winding-up order in respect of the company or, in circumstances in which the affairs of a company are to be wound up otherwise than by the court, the commencement of the winding up. 2 The conditions referred to in paragraph (1) are that – a the event in question had not been officially notified at the material time and is not shown by the company to have been known at that time by the other person concerned; and b if the material time fell on or before the 15th day after the date of official notification (or where the 15th day was a non-business day, on or before the next day that was a business day), it is shown that the other person concerned was unavoidably prevented from knowing of the event at that time. 3 In this regulation official notification means the notification in the Belfast Gazette (by virtue of regulation 77) of any document containing the information referred to in paragraph (1), and officially notified is to be construed accordingly. Invalidity of certain transactions involving directors 44 1 This regulation applies where – a an open-ended investment company enters into a transaction to which the parties include a director of the company or any person who is an associate of such a director; and b in connection with the transaction, the directors of the company (whether or not acting as a board) exceed any limitation on their powers under the company’s constitution. 2 The transaction is voidable at the instance of the company. 3 Whether or not the transaction is avoided, any such party to the transaction as is mentioned in paragraph (1)(a), and any director of the company who authorised the transaction, is liable – a to account to the company for any gain which he has made directly or indirectly by the transaction; and b to indemnify the company for any loss or damage resulting from the transaction. 4 Nothing in paragraphs (1) to (3) is to be construed as excluding the operation of any other statutory provision or rule of law by virtue of which the transaction may be called into question or any liability to the company may arise. 5 The transaction ceases to be voidable if – a restitution of any money or other asset which was the subject-matter of the transaction is no longer possible; b the company is indemnified for any loss or damage resulting from the transaction; c rights which are acquired, bona fide for value and without actual notice of the directors concerned having exceeded their powers, by a person who is not a party to the transaction would be affected by the avoidance; or d the transaction is ratified by resolution of the company in general meeting. 6 A person other than a director of the company is not liable under paragraph (3) if he shows that at the time the transaction was entered into he did not know that the directors concerned were exceeding their powers. 7 This regulation does not affect the operation of regulation 39 in relation to any party to the transaction not within paragraph (1)(a); but where a transaction is voidable by virtue of this regulation and valid by virtue of that regulation in favour of such a person, the court may, on the application of that person or of the company, make such order affirming, severing or setting aside the transaction, on such terms as appear to the court to be just. 8 For the purposes of this regulation – a “associate”, in relation to any person who is a director of the company, means that person’s spouse, child or stepchild (if under 18), employee, partner or any body corporate of which that person is a director; and if that person is a body corporate, any subsidiary undertaking or director of that body corporate (including any director or employee of such subsidiary undertaking); b transaction includes any act; and c the reference in paragraph (1)(b) to any limitation on directors' powers under the company’s constitution includes any limitation deriving from these Regulations, from FSA rules or from a resolution of the company in general meeting or of a meeting of any class of shareholders. Shares Shares 45 1 An open-ended investment company may issue more than one class of shares. 2 A shareholder may not have any interest in the scheme property of the company. 3 The rights which attach to each share of any given class are – a the right, in accordance with the instrument of incorporation, to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the scheme property; b the right, in accordance with the instrument of incorporation, to vote at any general meeting of the company or at any relevant class meeting; and c such other rights as may be provided for, in relation to shares of that class, in the instrument of incorporation of the company. 4 In respect of any class of shares, the rights referred to in paragraph (3) may, if the company’s instrument of incorporation so provides, be expressed in two denominations; and in the case of any such class, one (the smaller) denomination is to be such proportion of the other (the larger) denomination as is fixed by the instrument of incorporation. 5 In respect of any class of shares within paragraph (4), any share to which are attached rights expressed in the smaller denomination is to be known as a smaller denomination share; and any share to which are attached rights expressed in the larger denomination is to be known as a larger denomination share. 6 In respect of any class of shares, the rights which attach to each share of that class are – a except in respect of a class of shares within paragraph (4), equal to the rights that attach to each other share of that class; and b in respect of a class of shares within that paragraph, equal to the rights that attach to each other share of that class of the same denomination. 7 In respect of any class of shares within paragraph (4), the rights that attach to any smaller denomination share of that class are to be a proportion of the rights that attach to any larger denomination share of that class and that proportion is to be the same as the proportion referred to in paragraph (4). Share certificates 46 1 Subject to regulations 47 and 48, an open-ended investment company must prepare documentary evidence of title to its shares (share certificates) as follows – a in respect of any new shares issued by it; b where a shareholder has transferred part only of his holding back to the company, in respect of the remainder of that holding; c where a shareholder has transferred part only of his holding to the designated person, in respect of the remainder of that holding; d where a company has registered a transfer of shares made to a person other than the company or a person designated as mentioned in sub-paragraph (c) – i in respect of the shares transferred to the transferee; and ii in respect of any shares retained by the transferor which were evidenced by any certificate sent to the company for the purposes of registering the transfer; e in respect of any holding of bearer shares for which a certificate evidencing title has already been issued but where the certificate has been surrendered to the company for the purposes of being replaced by two or more certificates which between them evidence title to the shares comprising that holding; and f in respect of any shares for which a certificate has already been issued but where it appears to the company that the certificate needs to be replaced as a result of having been lost, stolen or destroyed or having become damaged or worn out. 2 A company must exercise due diligence and take all reasonable steps to ensure that certificates prepared in accordance with paragraph (1)(a) to (e) are ready for delivery as soon as reasonably practicable. 3 Certificates need be prepared in the circumstances referred to in paragraph (1)(e) and (f) only if the company has received – a a request for a new certificate; b the old certificate (if there is one); c such indemnity as the company may require; and d such reasonable sum as the company may require in respect of the expenses incurred by it in complying with the request. 4 Each share certificate must state – a the number of shares the title to which is evidenced by the certificate; b where the company has more than one class of shares, the class of shares title to which is evidenced by the certificate; and c except in the case of bearer shares, the name of the holder. 5 Where, in respect of any class of shares, the rights that attach to shares of that class are expressed in two denominations, the reference in paragraph (4)(a) (as it applies to shares of that class) to the number of shares is a reference to the total of – N + n p 6 In paragraph (5) – a N is the relevant number of the larger denomination shares of the class in question; b n is the relevant number of the smaller denomination shares of that class; and c p is the number of smaller denomination shares of that class that are equivalent to one larger denomination share of that class. 7 Nothing in these Regulations is to be taken as preventing the total arrived at under paragraph (5) being expressed on the certificate as a single entry representing the result derived from the formula set out in that paragraph. 8 A share certificate specifying any shares held by any person which is – a under the common seal of the company; or b authenticated in accordance with regulation 59; is prima facie evidence of that person’s title to the shares. Exceptions from regulation 46 47 1 Nothing in regulation 46 requires a company to prepare share certificates in the following cases. 2 Case 1 is any case where the company’s instrument of incorporation states that share certificates will not be issued and contains provision as to other procedures for evidencing a person’s entitlement to shares. 3 Case 2 is any case where a shareholder has indicated to the company in writing that he does not wish to receive a certificate. 4 Case 3 is any case where shares are issued or transferred to the designated person. 5 Case 4 is any case where shares are issued or transferred to a nominee of a recognised investment exchange who is designated for the purposes of this paragraph in the rules of the investment exchange in question. Bearer shares 48 An open-ended investment company may, if its instrument of incorporation so provides, issue shares (bearer shares) evidenced by a share certificate, or by any other documentary evidence of title for which provision is made in its instrument of incorporation, which indicates – a that the holder of the document is entitled to the shares specified in it; and b that no entry will be made on the register of shareholders identifying the holder of those shares. Register of shareholders 49 Schedule 3 makes provision with respect to the register of shareholders of an open-ended investment company. Power to close register 50 1 Subject to paragraph (2), an open-ended investment company may, on giving notice by advertisement in a national newspaper circulating in all the countries in which shares in the company are sold, close the register of shareholders for any time or times not exceeding, in the whole, 30 days in each year. 2 Paragraph (1) has effect subject to any requirements contained in FSA rules. Power of court to rectify register 51 1 An application to the court may be made under this regulation if – a the name of any person is, without sufficient cause, entered in or omitted from the register of shareholders of an open-ended investment company; b default is made as to the details contained in any entry on the register in respect of a person’s holding of shares in the company; or c default is made or unnecessary delay takes place in amending the register so as to reflect the fact of any person having ceased to be a shareholder. 2 An application under this regulation may be made by the person aggrieved, by any shareholder of the company or by the company itself. 3 The court may refuse the application or may order rectification of the register of shareholders and payment by the company of any damages sustained by any party aggrieved. 4 On such an application the court may decide any question necessary or expedient to be decided for rectification of the register of shareholders including, in particular, any question relating to the right of a person who is a party to the application to have his name entered in or omitted from the register (whether the question arises as between shareholders and alleged shareholders or as between shareholders or alleged shareholders on the one hand and the company on the other hand). Share transfers 52 Schedule 4 makes provision for the transfer of registered and bearer shares in an open-ended investment company. Operation Power incidental to carrying on business 53 An open-ended investment company has power to do all such things as are incidental or conducive to the carrying on of its business. Name to appear in correspondence etc. 54 1 Every open-ended investment company must have its name mentioned in legible characters in all letters of the company and in all other documents issued by the company in the course of business. 2 If an officer of a company or a person on the company’s behalf signs or authorises to be signed on behalf of the company any cheque or order for money or goods in which the company’s name is not mentioned as required by paragraph (1) he is personally liable to the holder of the cheque or order for money or goods for the amount of it (unless it is duly paid by the company). Particulars to appear in correspondence etc. 55 1 Every open-ended investment company must have the following particulars mentioned in legible characters in all letters of the company and in all other documents issued by the company in the course of business – a the company’s place of registration; b the number with which it is registered; c the address of its head office; and d the fact that it is an investment company with variable capital. 2 Where, in accordance with regulation 72, the Authority makes any change of existing registered numbers in respect of any open-ended investment company then, for a period of three years beginning with the date on which the notification of the change is sent to the company by the Authority, the requirement of paragraph (1)(b) is, notwithstanding regulation 72(4), satisfied by the use of either the old number or the new. Contracts 56 A contract may be made – a by an open-ended investment company by writing under its common seal; or b on behalf of such a company, by any person acting under its authority (whether express or implied); and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of such a company. Execution of documents 57 1 The following provisions have effect with respect to the execution of documents by an open-ended investment company. 2 A document is executed by a company by the affixing of its common seal. 3 A company need not have a common seal, however, and the following provisions of this regulation apply whether it does or not. 4 A document that is signed by at least one director and expressed (in whatever form of words) to be executed by the company has the same effect as if executed under the common seal of the company. 5 A document executed by a company which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it is to be presumed, unless a contrary intention is proved, to be delivered upon its being executed. 6 In favour of a purchaser, a document is deemed to have been duly executed by a company if it purports to be signed by at least one director or, in the case of a director which is a body corporate, it purports to be executed by that director; and, where it makes it clear on its face that it is intended by the person or persons making it to be a deed, it is deemed to have been delivered upon its being executed. 7 In paragraph (6), purchaser means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property. Execution of deeds outside the United Kingdom 58 1 An open-ended investment company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place elsewhere than in the United Kingdom. 2 A deed executed by such an attorney on behalf of the company has the same effect as if it were executed under the company’s common seal. Authentication of documents 59 A document or proceeding requiring authentication by an open-ended investment company is sufficiently authenticated – a by the signature of a director or other authorised officer of the company; or b in the case of a director which is a body corporate, if it is executed by that director. Official seal for share certificates 60 1 An open-ended investment company which has a common seal may have, for use for sealing shares issued by the company and for sealing documents creating or evidencing shares so issued, an official seal which is a facsimile of its common seal with the addition on its face of the word securities. 2 The official seal when duly affixed to a document has the same effect as the company’s common seal. Personal liability for contracts and deeds 61 1 A contract, which purports to be made by or on behalf of an open-ended investment company at a time before the coming into effect of an authorisation order in relation to that company, has effect (subject to any agreement to the contrary) as a contract made with the person purporting to act for the company or as agent for it, and he is accordingly personally liable under the contract. 2 Paragraph (1) applies to the making of a deed as it applies to the making of a contract. 3 If a company enters into a transaction at any time after the authorisation order made in respect of the company has been revoked and the company fails to comply with its obligations in respect of that transaction within 21 days of being called upon to do so, the person who authorised the transaction is liable, and where the transaction was authorised by two or more persons they are jointly and severally liable, to indemnify the other party to the transaction in respect of any loss or damage suffered by him by reason of the company’s failure to comply with those obligations. Exemptions from liability to be void 62 1 This regulation applies to any provision, whether contained in the instrument of incorporation of an open-ended investment company or in any contract with the company or otherwise – a which exempts any officer of the company or any person (whether or not an officer of the company) employed by the company as auditor from, or indemnifies him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company; or b which exempts the depositary of the company from, or indemnifies him against, any liability for any failure to exercise due care and diligence in the discharge of his functions in respect of the company. 2 Except as provided by the following paragraph, any such provision is void. 3 This regulation does not prevent a company – a from purchasing and maintaining for any such officer, auditor or depositary insurance against any such liability; or b from indemnifying any such officer, auditor or depositary against liability incurred by him – i in defending any proceedings (whether civil or criminal) in which judgment is given in his favour or he is acquitted; or ii in connection with any application under regulation 63 in which relief is granted to him by the court. Power of court to grant relief in certain cases 63 1 This regulation applies to – a any proceedings for negligence, default, breach of duty or breach of trust against an officer of an open-ended investment company or a person (whether or not an officer of the company) employed by the company as auditor; or b any proceedings against the depositary of such a company for failure to exercise due care and diligence in the discharge of his functions in respect of the company. 2 If, in any proceedings to which this regulation applies, it appears to the court hearing the case – a that the officer, auditor or depositary is or may be liable in respect of the cause of action in question; b that, nevertheless, he has acted honestly and reasonably; and c that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused from the liability sought to be enforced against him; the court may relieve him, either wholly or partly, from his liability on such terms as it may think fit. 3 If any such officer, auditor or depositary has reason to apprehend that any claim will or might be made against him in proceedings to which this regulation applies, he may apply to the court for relief. 4 The court, on an application under paragraph (3), has the same power to relieve the applicant as under this regulation it would have had if it had been a court before which the relevant proceedings against the applicant had been brought. 5 Where a case to which paragraph (2) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant ought in pursuance of that paragraph to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant on such terms as to costs or otherwise as the judge may think proper. Punishment for fraudulent trading 64 1 If any business of an open-ended investment company is carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purposes, every person who was knowingly a party to the carrying on of the business in that manner is guilty of an offence and liable – a on conviction on indictment, to imprisonment not exceeding a term of two years or to a fine or to both; b on summary conviction, to imprisonment not exceeding a term of three months or to a fine not exceeding the statutory maximum or to both. 2 This regulation applies whether or not the company has been, or is in the course of being, wound up (whether by the court or otherwise). Power to provide for employees on cessation or transfer of business 65 1 The powers of an open-ended investment company include power to make the following provision for the benefit of persons employed or formerly employed by the company, that is to say, provision in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company. 2 The power conferred by paragraph (1) is exercisable notwithstanding that its exercise is not in the best interests of the company. 3 The power which a company may exercise by virtue of paragraph (1) may only be exercised by the company – a in a case not falling within sub-paragraph (b) or (c), if sanctioned by a resolution of the company in general meeting; b if so authorised by the instrument of incorporation – i in the case of a company that has only one director, by a resolution of that director; and ii in any other case, by such resolution of directors as is required by FSA rules; or c if the instrument of incorporation requires the exercise of the power to be sanctioned by a resolution of the company in general meeting for which more than a simple majority of the shareholders voting is necessary, by a resolution of that majority; and in any case after compliance with any other requirements of the instrument of incorporation applicable to the exercise of the power. Reports Reports: preparation 66 1 The directors of an open-ended investment company must – a prepare a report (annual report) for each annual accounting period of the company; and b subject to paragraph (2), prepare a report (half-yearly report) for each half-yearly accounting period of the company. 2 Where a company’s first annual accounting period is a period of less than 12 months, a half-yearly report need not be prepared for any part of that period. 3 The directors of a company must lay copies of the annual report before the company in general meeting. 4 Nothing in this regulation or in regulation 67 prejudices the generality of regulation 6(1). 5 In this regulation any reference to annual and half yearly accounting periods of a company is a reference to those periods as determined in relation to that company in accordance with FSA rules. Reports: accounts 67 1 The annual report of an open-ended investment company must, in respect of the annual accounting period to which it relates, contain accounts of the company. 2 The company’s auditors must make a report to the company’s shareholders in respect of the accounts of the company contained in its annual report. 3 A copy of the auditors' report must form part of the company’s annual report. Reports: voluntary revision 68 1 If it appears to the directors of an open-ended investment company that any annual report of the company did not comply with the requirements of these Regulations or FSA rules, they may prepare a revised annual report. 2 Where copies of the previous report have been laid before the company in general meeting or delivered to the Authority, the revisions must be confined to – a the correction of anything in the previous report which did not comply with the requirements of these Regulations or FSA rules; and b the making of any necessary consequential alterations. Auditors 69 Schedule 5 makes provision with respect to the auditors of open-ended investment companies. Mergers and divisions Mergers and divisions 70 Schedule 6 makes provision with respect to mergers and divisions involving open-ended investment companies. PART IV THE AUTHORITY'S REGISTRATION FUNCTIONS Register of open-ended investment companies 71 1 The Authority must maintain a register of open-ended investment companies. 2 The Authority may keep the register in any form it thinks fit provided that it is possible to inspect the information contained on it and to obtain a copy of that information (or any part of it) for inspection. Companies' registered numbers 72 1 The Authority must allocate to every open-ended investment company a number, which is to be known as the company’s registered number. 2 Companies' registered numbers must be in such form, consisting of one or more sequences of figures or letters, as the Authority may from time to time determine. 3 The Authority may, upon adopting a new form of registered number, make such changes of existing registered numbers (including numbers allocated by the registrar) as appear to it to be necessary. 4 A change in a company’s registered number has effect from the date on which the company is notified by the Authority of the change. Delivery of documents to the Authority 73 Any document which is required by these Regulations to be delivered to the Authority to be recorded on the register maintained pursuant to regulation 71 must be delivered in such form as the Authority may from time to time specify. Keeping of company records by the Authority 74 1 The information contained in a document delivered to the Authority under any provision of these Regulations may be recorded and kept by it in any form it thinks fit, provided that it is possible to inspect the information and produce a copy of it in legible form. 2 The originals of documents delivered to the Authority under any provision of these Regulations in legible form must be kept by it for ten years after which they may be destroyed. 3 Where a company has been dissolved, the Authority may, at any time after the expiration of two years from the date of the dissolution, direct that any records in its custody relating to the company may be removed to the Public Record Office of Northern Ireland; and records in respect of which such a direction is given must be disposed of in accordance with the statutory provisions relating to that Office. Inspection etc. of records kept by the Authority 75 1 Any person may inspect any records kept by the Authority for the purposes of this Part and may require – a a copy, in such form as the Authority considers appropriate, of any information contained in those records; or b a certified copy of, or extract from, any such record. 2 The right of inspection extends to the originals of documents delivered to the Authority in legible form only where the record kept by the Authority of the contents of the document is illegible or unavailable. 3 A copy of or extract from a record kept by the Authority under these Regulations, on which is endorsed a certificate signed by a member of the Authority’s staff authorised by it for that purpose certifying that it is an accurate record of the contents of any document delivered to the Authority under these Regulations, is in all legal proceedings admissible in evidence as of equal validity with the original document and as evidence of any fact stated therein of which direct oral evidence would be admissible. 4 No process for compelling the production of a document kept by the Authority under these Regulations is to issue from any court except with the leave of the court; and any such process must bear on it a statement that it is issued with the leave of the court. Provision by the Authority of documents in non-legible form 76 Any requirement of these Regulations as to the supply by the Authority of a document may, if the Authority thinks fit, be satisfied by the communication by the Authority of the information in any non-legible form it thinks appropriate. Public notice by the Authority of receipt and issue of certain documents 77 The Authority must cause to be published in the Belfast Gazette notice of the issue or receipt by it of documents of any of the following descriptions (stating in the notice the name of the open-ended investment company, the description of the document and the date of issue of receipt) – a any document making or evidencing an alteration in a company’s instrument of incorporation; b any notice of a change in the address of a company’s head office; c any notice of a change in the directors of a company; d any notice of a change in the depositary of a company; e any annual report of a company delivered to the Authority as required by FSA rules; f any copy of an order made under Schedule 6; g any copy of a winding-up order in respect of a company; and h any copy of an instrument providing for the dissolution of a company on a winding up. Exclusion of deemed notice 78 A person is not to be taken to have deemed notice of any matter merely because of its being disclosed in any document kept by the Authority (and thus available for inspection) under any provision of these Regulations. PART V MISCELLANEOUS Contraventions 79 Any of the following persons, that is to say – a a person who contravenes any provision of these Regulations; and b an open-ended investment company (including any director or depositary of such a company) which contravenes any provision of FSA rules, is to be treated as having contravened rules made under section 138 of the Act (general rule-making power). Offences by bodies corporate etc. 80 Section 400 of the Act (offences by bodies corporate etc.) applies to an offence under these Regulations as it applies to an offence under the Act. Jurisdiction and procedure in respect of offences 81 Section 403 of the Act (jurisdiction and procedure in respect of offences) applies to offences under these Regulations as it applies to offences under the Act. Evidence of grant of probate etc. 82 The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person must be accepted by the company as sufficient evidence of the grant. Minor and consequential amendments 83 The provisions mentioned in Schedule 7 shall have effect subject to the amendments specified in that Schedule. Revocation etc. 84 1 The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations (Northern Ireland) 1997 (the 1997 Regulations) are revoked. 2 Anything done under or in accordance with the 1997 Regulations has effect as if done under or in accordance with these Regulations. 3 Without prejudice to the generality of paragraph (2) – a a body incorporated by virtue of regulation 3(1) of the 1997 Regulations is to be treated as if it had been incorporated by virtue of regulation 3(1) of these Regulations; b where an application under regulation 7 of the 1997 Regulations has not been determined by the Authority at the time when this regulation comes into operation it is to be treated as if it were an application made under regulation 12 of these Regulations; c the Authority’s registration functions under Part IV of these Regulations apply to any documents or records delivered to the registrar pursuant to regulation 4 of, and Schedule 1 to, the 1997 Regulations. Sealed with the Official Seal of the Department of Enterprise, Trade and Investment on 10th August 2004. James McKeown A senior officer of the Department of Enterprise, Trade and Investment