Unit Trusts Act , 1990

1 Interpretation.

1.—(1) In this Act, unless the context otherwise requires—

“the Act of 1972” means the Unit Trusts Act, 1972;

“authorised unit trust scheme” means a unit trust scheme which is authorised by the Bank under section 4 and “authorisation”, in relation to a unit trust scheme, shall be construed accordingly;

“the Bank” means the Central Bank of Ireland;

“company” means a company within the meaning of the Companies Act, 1963, or a company incorporated in the State by statute or charter;

“contravention” includes, in relation to any provision, a failure to comply with that provision, and “contravene” shall be construed accordingly;

“debentures” means any debentures, debenture stock or bonds of any body corporate, incorporated in or outside the State, whether constituting a charge on the assets of the body or not;

“the European Communities” has the same meaning as in section 1 of the European Communities Act, 1972;

“holding company” has the same meaning as in the Companies Act, 1963;

“the Minister” means the Minister for Industry and Commerce;

“the register” means the register established and maintained under section 3;

“securities” means—

(a) shares or debentures, or rights or interests (whether described as units or otherwise) in any shares or debentures, or

(b) securities of the Government or the government of any country or territory outside the State, or

(c) rights (whether actual or contingent) in respect of money lent to, or deposited with, any holder of a licence under section 9 of the Central Bank Act, 1971, industrial and provident society, friendly society, building society, the Agricultural Credit Corporation public limited company, the company formed and registered by virtue of section 2 of the Industrial Credit Act, 1933, the Post Office Savings Bank or any trustee savings bank (within the meaning of the Trustee Savings Banks Act, 1989);

“shares” means shares in the share capital of a body corporate or stock of a body corporate;

“subsidiary” has the same meaning as in the Companies Act, 1963;

“trust deed” means the deed in which are expressed the trust or trusts created in pursuance of a unit trust scheme and references to the trust deed of a unit trust scheme shall be construed accordingly;

“the UCITS Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989);

“unit-holder” means the holder of one or more units of a unit trust scheme and references to a unit-holder in such a scheme shall be construed accordingly;

“units”, in relation to a unit trust scheme, means any units (whether described as units or otherwise) into which are divided the beneficial interests in the assets subject to any trust created under the scheme;

“unit trust scheme” means any arrangement made for the purpose, or having the effect, of providing facilities for the participation by the public, as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.

(2) Any reference in this Act to a management company under a unit trust scheme or to a trustee under such a scheme shall be construed as a reference to the person in whom are vested the powers of management relating to property for the time being subject to any trust created in pursuance of the scheme or, as the case may be, to the person in whom such property is or may be vested in accordance with the terms of the trust.

(3) Any reference in this Act to an authorisation, in relation to a unit trust scheme, standing revoked under this Act shall be construed as a reference to an authorisation standing revoked under Regulation 102 (as adapted by section 15) of the UCITS Regulations.

(4) For the purposes of the adaptation by section 15 of certain provisions of the UCITS Regulations to unit trust schemes, the said provisions shall be construed as one with this Act.

(5) In this Act—

(a) a reference to a section is to a section of this Act and a reference to a subsection is to the subsection of the section in which the reference occurs, unless it is indicated that reference to some other provision is intended;

(b) a reference to any other enactment shall, unless the context otherwise requires, be construed as a reference to that enactment as amended or adapted by or under any other enactment, including this Act.

2 Non-application of this Act to certain undertakings.

2.—The provisions of this Act shall not apply to an undertaking for collective investment in transferable securities (within the meaning of the UCITS Regulations) that is authorised under those Regulations or by a competent authority in another member state of the European Communities in accordance with Council Directive 85/611/EEC of 20th December, 1985 [^1] (as amended by Council Directive 88/220/EEC of 22nd March, 1988[^2] ).

3 Register of authorised unit trust schemes.

3.—(1) The Bank shall establish and maintain a register of authorised unit trust schemes.

(2) The register shall be open to the inspection of any member of the public on the payment of such fee as the Bank may specify.

(3) The register established and maintained under section 2 of the Act of 1972 (repealed by this Act) shall form part of the register.

(4) The Bank shall, within 21 days after the date of the authorisation by it under section 4 of a unit trust scheme, publish a notice to that effect in Iris Oifigiúil.

(5) The Bank shall publish from time to time, but not less frequently than once a year, in such manner as it thinks fit, the names of all unit trust schemes which have been authorised by it under section 4 and whose authorisation has not been revoked under this Act.

(6) The report of the Bank under section 20 of the Central Bank Act, 1989, shall contain a report on the exercise of its functions under this Act.

4 Authorisation of unit trust schemes.

4.—(1) Upon application to the Bank in accordance with this section by the management company and trustee under a unit trust scheme, the Bank shall authorise the scheme if, but only if—

(a) the Bank is satisfied that the competence of the management company and trustee in respect of matters of the kind with which they would be concerned in relation to a unit trust scheme and their probity are such as to render them suitable to act as management company and trustee, respectively, under the scheme,

(b) the management company under the scheme is a body corporate that is incorporated under the law of the State or any other member state of the European Communities, has, in the opinion of the Bank, sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities and will be in a position to comply with any conditions imposed by the Bank under section 5,

(c) the trustee under the scheme is a body corporate that is incorporated under the law of the State or any other member state of the European Communities and—

(i) has, in the opinion of the Bank, sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities,

(ii) will be in a position to comply with any conditions imposed by the Bank under section 5, and

(iii) has satisfied the Bank that it has the appropriate expertise and experience to carry out its functions under this Act,

(d) the Bank is satisfied that the scheme is such that the effective control over the affairs of the management company and of the trustee under the scheme will be exercised independently of one another,

(e) the Bank is satisfied that the scheme is such as to secure that every trust created in pursuance of the scheme is expressed in a deed which complies with the provisions of this Act and that the deed contains a covenant providing that the scheme will be carried on in compliance with the provisions of this Act,

(f) a copy of the deed aforesaid is deposited with the Bank, and

(g) the name of the scheme is not, in the opinion of the Bank, undesirable.

(2) The Minister may direct the Bank to make any authorisation by it under this section subject to the imposition by it of conditions or requirements specified in his direction (being conditions or requirements which relate to such matters, which the Minister is satisfied, after consultation with the Minister for Finance and the Bank, do not constrain the prudential supervision by the Bank of a scheme) and, accordingly, the Bank shall make such authorisation subject to every condition or requirement so specified.

(3) A direction under subsection (2) may relate to unit trust schemes generally, schemes of a particular class or a particular scheme.

(4) The management company and trustee under an authorised unit trust scheme shall comply with any conditions or requirements imposed by the Bank under subsection (2) and which are applicable to that scheme.

(5) An application for the authorisation of a unit trust scheme shall be made in writing and shall contain such information as the Bank may specify for the purpose of determining the application (including such additional information as the Bank may specify in the course of determining the application).

(6) The authorisation of a unit trust scheme by the Bank shall not constitute a warranty by the Bank as to the performance of the scheme and the Bank shall not be liable for the performance or default of the scheme.

5 Powers of Bank.

5.—(1) Notwithstanding any other powers which may be available to the Bank under any other enactment, the Bank may impose such conditions for the authorisation of a unit trust scheme under section 4 as it considers appropriate and prudent for the purposes of the orderly and proper regulation of the business of unit trust schemes.

(2) The power to impose conditions referred to in subsection (1) shall include power to impose such conditions from time to time in respect of the manner in which the business of a unit trust scheme authorised under section 4 shall be operated as the Bank considers appropriate and prudent for the purposes referred to in subsection (1).

(3) Conditions imposed under this section may be imposed generally or on a particular unit trust scheme, or by reference to particular classes of scheme, or by reference to any other matter the Bank considers appropriate and prudent for the purposes referred to in subsection (1).

(4) Without prejudice to the generality of subsections (1), (2) and (3), conditions imposed by the Bank on a unit trust scheme may make provision for any or all of the following matters—

(a) the prudential requirements of the investment policies of the scheme,

(b) borrowing policies of the scheme,

(c) prospectuses and other information disseminated in relation to the scheme,

(d) such other supervisory and reporting requirements and conditions relating to its business.

(5) The Bank may amend or revoke a condition imposed by it under this section.

(6) The management company and trustee under an authorised unit trust scheme shall comply with any conditions imposed by the Bank under this section and which are applicable to that scheme.

6 Refusal of authorisation.

6.—(1) Where the Bank decides to refuse authorisation of a unit trust scheme under section 4 it shall notify the management company and trustee under the scheme of its decision and of the reasons therefor. The management company or trustee may apply to the High Court in accordance with Regulation 105 (as adapted by section 15) of the UCITS Regulations.

(2) The management company or trustee shall have the same right to apply to the High Court as in subsection (1) if a decision on authorisation under section 4 has not been taken by the Bank within 6 months of the submission of an application for authorisation which includes the information, other than any additional information, specified by the Bank under subsection (5) of that section.

7 Alteration in trust deed of, or change in name of, authorised unit trust scheme.

7.—(1) No alteration in the trust deed of an authorised unit trust scheme or change in the name of such scheme shall be made without the approval of the Bank and any person who makes an alteration or change as aforesaid without such approval shall be guilty of an offence.

(2) Within 21 days after the making of an alteration in the trust deed of an authorised unit trust scheme or a change in the name of such scheme the management company under the scheme shall deposit with the Bank a copy of the deed as so altered or containing the alterations or (as the case may be) particulars of the change in name.

(3) Where the management company under an authorised unit trust scheme fails to comply with subsection (2), it shall be guilty of an offence.

8 Replacement of management company or trustee.

8.—(1) Neither the management company nor the trustee under an authorised unit trust scheme may be replaced by another management company or trustee (as the case may be) without the approval of the Bank.

(2) The trust deed of an authorised unit trust scheme shall specify the conditions under which there may be effected, and the procedure to be followed with respect to, the replacement of the management company or trustee under the scheme with another management company or trustee (including such a replacement by the Bank under subsection (3)) and shall contain provisions to ensure the protection of unit-holders in the event of any such replacement.

(3) The Bank may, where it appears to it to be desirable in the interests of unit-holders or potential unit-holders in an authorised unit trust scheme to do so, replace the management company or trustee under the scheme with another management company or trustee.

(4) Where the Bank proposes to replace a management company or trustee under subsection (3) it shall give the management company or trustee, as the case may be, notice of its intention to do so, which notice shall contain a statement of the reasons for which the Bank proposes to act and of the right of the management company or trustee (as the case may be) under subsection (5) to make representations.

(5) A management company or trustee which is given a notice under subsection (4) may, within 30 days of the date on which the notice is given, make written representations to the Bank.

(6) The Bank shall have regard to any representations made to it in accordance with subsection (5) in determining whether to replace the management company or trustee.

(7) The management company or trustee (as the case may be) may apply to the High Court in accordance with Regulation 105 (as adapted by section 15) of the UCITS Regulations where the Bank replaces the management company or trustee under this section.

(8) Upon the replacement by the Bank under this section of a management company or trustee under an authorised unit trust scheme, that management company or trustee (as the case may be) shall cease to hold office as management company or trustee under the scheme and, in either case, its powers and duties under the scheme shall be exercised and carried out by the new management company or trustee (as the case may be).

9 Prohibition of the sale or purchase of units of unauthorised unit trust schemes and certain like schemes.

9.—(1) The management company or trustee (if any) under, or any person concerned with the management or supervision of—

(a) a unit trust scheme (other than a scheme to which subsection (2) applies) that is not an authorised unit trust scheme, or

(b) a scheme which is an arrangement of a kind (not being an arrangement to which subsection (2) applies) made for the purpose, or having the effect, solely or mainly, of providing facilities for the participation by the public, as beneficiaries (otherwise than under a trust or through membership of a company, a building society, a friendly society or an industrial and provident society) in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever,

shall not, without the approval of the Bank (which approval may be subject to such conditions as the Bank thinks fit to impose) sell or purchase units of the scheme or make solicitation in respect of such sale or purchase.

(2) This subsection applies to a unit trust scheme or an arrangement which is made for the purpose or has the effect, solely or mainly, of providing facilities for the participation by the public, as beneficiaries under a trust, or (in the case of an arrangement) otherwise than under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever and which is administered by the holder of an authorisation under the European Communities (Life Assurance) Regulations, 1984 (S.I. No. 57 of 1984), and for participation in which a policy of assurance upon human life is required to be effected.

(3) The prohibition contained in subsection (1) does not apply to the purchase from a unit-holder of units of a unit trust scheme the authorisation of which under this Act stands revoked.

(4) A person who sells or purchases units, or makes a solicitation in respect of such sale or purchase, in contravention of subsection (1) (whether because the approval of the Bank under that subsection has not been obtained in respect thereof or because any condition to which the approval is subject has not been complied with) shall be guilty of an offence.

10 Prohibition of certain advertising in relation to unauthorised unit trust schemes and certain like schemes.

10.—(1) There shall not be published or communicated, without the approval of the Bank (which approval may be subject to such conditions as the Bank thinks fit to impose) advertisements in relation to or referring to a scheme to which paragraph (a) or (b) of section 9 (1) applies.

(2) (a) Whenever it is shown to the satisfaction of the Bank, in the case of a newspaper or magazine printed outside the State that, in the opinion of the Bank, has only a small circulation in the State, that compliance with this section would necessitate the production for circulation in the State of a special edition of the newspaper or magazine and that the cost of such production would impose a burden on the owner of the newspaper or magazine that would be unreasonably heavy in all the circumstances, the Bank may exempt from the application of this section advertisements published in the newspaper or magazine.