The Open-Ended Investment Companies Regulations 2001

• (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+np$(6)In paragraph (5)—(a)N is the relevant number of the larger denomination shares of the class in question;(b)n is the relevant number of the smaller denomination shares of that class; and(c) p is the number of smaller denomination shares of that class that are equivalent to one larger denomination share of that class.$

• (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) In England and Wales or Northern Ireland, 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.

• (9) In Scotland, a share certificate specifying any shares held by any person which is—

• (a) under the common seal of the company; or

• (b) subscribed by the company in accordance with the Requirements of Writing (Scotland) Act 1995 ;

is, unless the contrary is shown, sufficient evidence of that person’s title to the shares.

Exceptions from regulation 46

47

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Nothing in regulation 46 requires a company to prepare share certificates in the following cases.

• (3) 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.

• (4) Case 2 is any case where a shareholder has indicated to the company in writing that he does not wish to receive a certificate.

• (5) Case 3 is any case where shares are issued or transferred to the designated person.

• (6) 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

• (1) An open-ended investment company authorised before the day on which the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 came into force (“the relevant date”) 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.

• (1A) An open-ended investment company authorised before the relevant date may not issue, convert or cancel bearer shares after 1 January 2021 (irrespective of whether its instrument of incorporation purports to authorise it to do so).

• (2) An open-ended investment company authorised on or after the relevant date may not issue any bearer shares under paragraph (1), and any provision in the instrument of incorporation of such an open-ended investment company purporting to authorise it to do so is void.

• (3) Paragraph (2) does not apply to an open-ended investment company if—

• (a) an application for an authorisation order was made in relation to that open-ended investment company before the relevant date; and

• (b) that application was not determined until a date on or after the relevant date.

Register of shareholders

49

Schedule 3 to these Regulations makes provision with respect to the register of shareholders of an open-ended investment company.

Power to close register

50

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 to these Regulations 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 disclose its name in characters that can be read with the naked eye in all letters of the company, in all other documents issued by the company in the course of business, and on its website.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Particulars to appear in correspondence etc.

55

• (1) Every open-ended investment company must have the following particulars disclosed in characters that can be read with the naked eye in all letters of the company, in all other documents issued by the company in the course of business, and on its websites—

• (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: England and Wales

56

Under the law of England and Wales or Northern Ireland 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 expressed 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: England and Wales or Northern Ireland

57

• (1) Under the law of England and Wales or Northern Ireland 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 overseas: England and Wales

58

• (1) Under the law of England and Wales or Northern Ireland an open-ended investment company may, by instrument executed as a deed, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf ....

• (2) A deed executed by such an attorney on behalf of the company has effect as if executed by the company.

Authentication of documents: England and Wales

59

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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—

• (a) to the making of a deed under the law of England and Wales or Northern Ireland; and

• (b) to the undertaking of an obligation under the law of Scotland;

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) Except in the case of the depositary of an AIF (as to which see regulations 29 to 32 of the Alternative Investment Fund Managers Regulations 2013), 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 any 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 depository 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 or defender 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 or defender 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 purpose, 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 ten years or to a fine or to both;

• (b) on summary conviction—

• (i) in England and Wales, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum (or both);

• (ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum (or 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) subject to paragraph (4) 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 FCA 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.

• (4) A resolution of the directors is not sufficient sanction for payments to or for the benefits of directors, former directors or shadow directors.

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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 FCA 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 auditor’s 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 FCA 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 FCA rules; and

• (b) the making of any necessary consequential alterations.

Auditors

69

Schedule 5 to these Regulations makes provision with respect to the auditors of open-ended investment companies.

Mergers and divisions

Mergers and divisions

70

Schedule 6 to these Regulations makes provision with respect to mergers and divisions involving open-ended investment companies other than mergers to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2011 applies.

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 appropriate 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 ....

• (2) The originals of documents delivered to the Authority under any provision of these Regulations in hard copy form must be kept for three years after they are received by the Authority, after which they may be destroyed provided the information contained in them has been recorded in the register.

• (2A) The Authority is under no obligation to keep the originals of documents delivered in electronic form, provided the information contained in them has been recorded in the register.

• (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; and records in respect of which such a direction is given must be disposed of in accordance with the enactments relating to that Office and the rules made under them.

• (4) Paragraph (3) does not extend to Scotland.

• (5) Paragraphs (2) and (2A) apply to documents held by the Authority when this paragraph comes into force as well as to documents subsequently received.

Inspection etc. of records kept by the Authority

75

• (1) Any person may inspect the register kept by the Authority for the purposes of this Part of these Regulations, and may require a copy of any material on the register.

• (1A) The Authority may specify the form and manner in which an application is to be made for inspection or a copy under paragraph (1).

• (1B) Copies of documents required to be registered under regulation 4 must be provided in hard copy or electronic form, as the applicant requests.

• (1C) The Authority is not obliged by paragraph (1B) to provide copies in electronic form of a document that was delivered to the Authority in hard copy form if the document was delivered to the Authority on or before 31st December 2006 and ten years or more elapsed between the date of delivery and the date of receipt of the first application for a copy.

• (1D) Subject to paragraphs (1B) and (1C), the Authority may determine the form and manner in which copies are to be provided.

• (1E) Copies provided under paragraph (1) in hard copy form must be certified as true copies unless the applicant dispenses with such certification.

• (1F) Copies provided under paragraph (1) in electronic form must not be certified as true copies unless the applicant expressly requests such certification.

• (2) The right of inspection extends to the originals of documents delivered to the Authority in hard copy form only where the record kept by the Authority of the contents of the document is illegible or unavailable.

• (3) A copy provided under this regulation, 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 electronic 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 electronic form.

Documents relating to Welsh open-ended investment companies

77

• (1) This regulation applies to any document which is delivered to the Authority under these Regulations and relates to an open-ended investment company (whether already registered or to be registered) whose instrument of incorporation states that its head office is to be situated in Wales.

• (2) A document to which this regulation applies may be in Welsh but must be accompanied by a certified translation into English.

• (3) The requirement for a translation imposed by paragraph (2) does not apply—

• (a) to documents of such description as may be specified in FCA rules; or

• (b) to documents in a form prescribed in Welsh (or partly in Welsh and partly in English) by virtue of section 26 of the Welsh Language Act 1993 (powers to prescribe Welsh forms).

• (4) An open-ended investment company whose instrument of incorporation states that its head office is to be situated in Wales may deliver to the Authority a certified translation into Welsh of any document in English which relates to the company and which is or has been delivered to the Authority.

• (5) In this regulation “certified translation" means a translation which is certified in the manner specified in FCA rules to be a correct translation.

Public notice by the Authority of receipt and issue of certain documents

78

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exclusion of deemed notice

79

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART V — MISCELLANEOUS

Contraventions

80

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 FCA rules,

is to be treated as having contravened rules made under section 137A of the Act (FCA’s general rules).

Offences by bodies corporate etc.

81

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

82

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.

83

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

84

The provisions mentioned in Schedule 7 to these Regulations (being minor amendments and amendments consequential on the provisions of these Regulations) have effect subject to the amendments specified in that Schedule.

Revocation etc.

85

• (1) The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 (“the 1996 Regulations") are revoked.

• (2) Anything done under or in accordance with the 1996 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 1996 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 1996 Regulations had not been determined by the Authority at the time when this regulation comes into force, 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 appropriate registrar pursuant to regulation 4 of, and Schedule 1 to, the 1996 Regulations.

SCHEDULE 1 — DEPOSITARIES

Appointment

1

On the coming into effect of an authorisation order in respect of an open-ended investment company, the person named in the application under regulation 12 as depositary of the company is deemed to be appointed as its first depositary.

2

Subject to regulations 21 and 26, any subsequent appointment of the depositary of a company must be made by the directors of the company.

Retirement

3

The depositary of a company may not retire voluntarily except upon the appointment of a new depositary.

Rights

4

The depositary of a company is entitled—

• (a) to receive all such notices of, and other communications relating to, any general meeting of the company as a shareholder of the company is entitled to receive;

• (b) to attend any general meeting of the company;

• (c) to be heard at any general meeting which it attends on any part of the business of the meeting which concerns it as depositary;

• (d) to convene a general meeting of the company when it sees fit;

• (e) to require from the company’s officers such information and explanations as it thinks necessary for the performance of its functions as depositary; and

• (f) to have access, except in so far as they concern its appointment or removal, to any reports, statements or other papers which are to be considered at any meeting held by the directors of the company (when acting in their capacity as such), at any general meeting of the company or at any meeting of holders of shares of any particular class.

Statement by depositary ceasing to hold office

5

• (1) Where the depositary of a company ceases, for any reason other than by virtue of a court order made under regulation 26, to hold office, it may deposit at the head office of the company a statement of any circumstances connected with its ceasing to hold office which it considers should be brought to the attention of the shareholders or creditors of the company or, if it considers that there are no such circumstances, a statement that there are none.

• (2) If the statement is of circumstances which the depositary considers should be brought to the attention of the shareholders or creditors of the company, the company must, not later than 14 days after the deposit of the statement, either—

• (a) send a copy of the statement to each of the shareholders whose name appears on the register of shareholders (other than the designated person) and take such steps as FCA rules may require for the purpose of bringing the fact that the statement has been made to the attention of the holders of any bearer shares; or

• (b) apply to the court;

and, where an application is made under sub-paragraph (b), the company must notify the depositary.

• (3) Unless the depositary receives notice of an application to the court before the end of the period of 21 days beginning with the day on which it deposited the statement, it must, not later than seven days after the end of that period, send a copy of the statement to the Authority.

• (4) If the court is satisfied that the depositary is using the statement to secure needless publicity for defamatory matter—

• (a) it must direct that copies of the statement need not be sent out and that the steps required by FCA rules need not be taken; and

• (b) it may further order the company’s costs on the application to be paid in whole or in part by the depositary notwithstanding that the depositary is not a party to the application;

and the company must, not later than 14 days after the court’s decision, take such steps in relation to a statement setting out the effect of the order as are required by sub-paragraph (2)(a) in relation to the statement deposited under sub-paragraph (1).

• (5) If the court is not so satisfied, the company must, not later than 14 days after the court’s decision, take the steps required by sub-paragraph (2)(a) and notify the depositary of the court’s decision.

• (6) The depositary must, not later than seven days after receiving such a notice, send a copy of the statement to the Authority.

• (7) Where a notice of appeal is filed not later than 14 days after the court’s decision, any reference to that decision in sub-paragraphs (4) and (5) is to be construed as a reference to the final determination or withdrawal of that appeal (as the case may be).

6

• (1) This paragraph applies where copies of a statement have been sent to shareholders under paragraph 5.

• (2) The depositary who made the statement has, notwithstanding that it has ceased to hold office, the rights conferred by paragraph 4(a) to (c) in relation to the general meeting of the company next following the date on which the copies were sent out.

• (3) The reference in paragraph 4(c) to business concerning the depositary as depositary is to be construed in relation to a depositary who has ceased to hold office as a reference to business concerning it as former depositary.

SCHEDULE 2 — INSTRUMENT OF INCORPORATION

1

The instrument of incorporation of an open-ended investment company must—

• (a) contain the statements set out in paragraph 2; and

• (b) contain provision made in accordance with paragraphs 3 and 4.

2

The statements referred to in paragraph 1(a) are—

• (a) the head office of the company is situated in England and Wales (or Wales), in Scotland or in Northern Ireland (as the case may be);

• (b) the company is an open-ended investment company with variable share capital;

• (ba) in the case of an umbrella company, the assets of a sub-fund belong exclusively to that sub-fund and shall not be used to discharge the liabilities of or claims against the umbrella company or any other person or body, or any other sub-fund, and shall not be available for any such purpose;

• (c) the shareholders are not liable for the debts of the company;

• (d) the scheme property is entrusted to a depositary for safekeeping (subject to any exceptions permitted by FCA rules); and

• (e) charges or expenses of the company may be taken out of the scheme property.

3

• (1) The instrument of incorporation must contain provision as to the following matters—

• (a) the object of the company;

• (b) any matter relating to the procedure for the appointment, retirement and removal of any director of the company for which provision is not made in these Regulations or FCA rules; and

• (c) the currency in which the accounts of the company are to be prepared.

• (2) The provision referred to in sub-paragraph (1)(a) as to the object of an open-ended investment company must state clearly the kind of property in which the company is to invest and must state that the object of the company is to invest in property of that kind with the aim of spreading investment risk and giving its shareholders the benefit of the results of the management of that property.

4

• (1) The instrument of incorporation must also contain provision as to the following matters—

• (a) the name of the company;

• (b) the category, as specified in FCA rules, to which the company belongs;

• (c) the maximum and minimum sizes of the company’s capital;

• (d) in the case of an umbrella company, the investment objectives applicable to each part of the scheme property that is pooled separately;

• (e) the classes of shares that the company may issue indicating, in the case of an umbrella company, which class or classes of shares may be issued in respect of each part of the scheme property that is pooled separately;

• (f) the rights attaching to shares of each class (including any provision for the expression in two denominations of such rights);

• (g) if the company is to be able to issue bearer shares, a statement to that effect together with details of any limitations on the classes of the company’s shares which are to include bearer shares;

• (h) in the case of a company which is a participating issuer, a statement to that effect together with an indication of any class of shares in the company which is a class of participating securities;

• (i) if the company is to dispense with the requirements of regulation 46, the details of any substituted procedures for evidencing title to the company’s shares; and

• (j) the form, custody and use of the company’s common seal (if any).

• (2) For the purposes of sub-paragraph (1)(c), the size at any time of a company’s capital is to be taken to be the value at that time, as determined in accordance with FCA rules, of the scheme property of the company less the liabilities of the company.

5

• (1) Once an authorisation order has been made in respect of a company, no amendment may be made to the statements contained in the company’s instrument of incorporation which are required by paragraph 2.

• (2) Subject to sub-paragraph (1) and to any restriction imposed by FCA rules, a company may amend any provision which is contained in its instrument of incorporation.

• (3) No amendment to a provision which is contained in a company’s instrument of incorporation by virtue of paragraph 3 may be made unless it has been approved by the shareholders of the company in general meeting.

6

• (1) The provisions of a company’s instrument of incorporation are binding on the officers and depositary of the company and on each of its shareholders; and all such persons (but no others) are to be taken to have notice of the provisions of the instrument.

• (2) A person is not debarred from obtaining damages or other compensation from a company by reason only of his holding or having held shares in the company.

SCHEDULE 3 — REGISTER OF SHAREHOLDERS

General

1

• (1) Subject to sub-paragraph (2), every open-ended investment company must keep a register of persons who hold shares in the company.

• (2) Except to the extent that the aggregate numbers of shares mentioned in paragraphs 5(1)(b) and 7 include bearer shares, nothing in this Schedule requires any entry to be made in the register in respect of bearer shares.

2

• (1) ... The register of shareholders is prima facie evidence of any matters which are by these Regulations directed or authorised to be contained in it.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

In the case of companies registered in England and Wales or Northern Ireland, no notice of any trust, express, implied or constructive, is to be entered on the company’s register or be receivable by the company.

• (2) A company must exercise all due diligence and take all reasonable steps to ensure that the information contained in the register is at all times complete and up to date.

Contents

5

• (1) The register of shareholders must contain an entry consisting of—

• (a) the name of the designated person;

• (b) a statement of the aggregate number of all shares in the company held by that person; ...

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In sub-paragraph (1), for the purposes of sub-paragraph (b), the designated person is to be taken as holding all shares in the company which are in issue and in respect of which no other person’s name is entered on the register.

• (3) The statements referred to in sub-paragraph (1)(b) and (c) must be up-dated at least once a day.

6

• (1) This paragraph does not apply to any issue or transfer of shares to the designated person.

• (2) Where a company issues a share to any person and the name of that person is not already entered on the register, the company must enter his name on the register.

• (3) In respect of any person whose name is entered on the register in accordance with sub-paragraph (2) or paragraph 6 of Schedule 4 to these Regulations, the register must contain an entry consisting of—

• (a) the address of the shareholder;

• (b) the date on which the shareholder’s name was entered on the register;

• (c) a statement of the aggregate number of shares held by the shareholder, distinguishing each share by its number (if it has one) and, where the company has more than one class of shares, by its class; ...

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

The register of shareholders must contain a monthly statement of the aggregate number of all the bearer shares in issue except for any bearer shares in issue which, at the time when the statement is made, are held by the designated person.

8

• (1) This paragraph applies where the aggregate number of shares referred to in paragraphs 5 to 7 includes any shares to which attach rights expressed in two denominations.

• (2) In respect of each class of shares to which are attached rights expressed in two denominations, the number of shares of that class held by any person referred to in paragraph 5 or 6, or the number of bearer shares of that class referred to in paragraph 7, is to be taken to be the total of—

$$N+np$(3)In sub-paragraph (2)—(a) N is the relevant number of larger denomination shares of that class;(b) n is the relevant number of smaller denomination shares of that class; and(c) p is the number of smaller denomination shares of that class that are equivalent to one larger denomination share of that class.$

• (4) Nothing in these Regulations is to be taken as preventing the total arrived at under sub-paragraph (2) being expressed on the register as a single entry representing the result derived from the formula set out in that sub-paragraph.

Location

9

The register of shareholders of a company must be kept available for inspection—

• (a) at its head office, or

• (b) where an alternative inspection location has been notified to the Authority under regulation 36(3)(b), at that place.

Index

10

• (1) Every company must keep an index of the names of the holders of its registered shares.

• (2) The index must contain, in respect of each shareholder, a sufficient indication to enable the account of that shareholder in the register to be readily found.

• (3) The index must be at all times kept at the same place as the register of shareholders.

• (4) Not later than 14 days after the date on which any alteration is made to the register of shareholders, the company must make any necessary alteration in the index.

Inspection

11

• (1) Subject to regulation 50 and to FCA rules, the register of shareholders and the index of names must be open to the inspection of any shareholder (including any holder of bearer shares) without charge.

• (2) Any shareholder may require a copy of the entries on the register relating to him and the company must cause any copy so required by a person to be sent to him free of charge.

• (3) If an inspection required under this paragraph is refused, or if a copy so required is not sent, the court may by order compel an immediate inspection of the register and index, or direct that the copy required be sent to the person requiring it.

Agent’s default

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 4 — SHARE TRANSFERS

General

1

The instrument of incorporation of a company may contain provison as to share transfers in respect of any matter for which provision is not made in these Regulations or FCA rules.

2

Where any shares are transferred to the company, the company must cancel those shares.

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of registered shares

4

• (1) Where a transfer of shares is made by the person (if any) who is designated in the company’s instrument of incorporation for the purposes of this paragraph, the company may not register the transfer unless such evidence as the company may require to prove that the transfer has taken place has been delivered to the company.

• (2) Where for any reason a person ceases to be designated for the purposes of this paragraph—

• (a) any shares held by that person which are not disposed of on or before his ceasing to be so designated are to be deemed to be the subject of a new transfer to him which takes effect immediately after he ceases to be so designated; and

• (b) the company must make such adjustments to the register as are necessary to reflect his change of circumstances.

5

• (1) Except in the case of any transfer of shares referred to in paragraph 4, the company may not register any transfer unless the transfer documents relating to that transfer have been delivered to the company.

• (2) No share certificate has to be delivered by virtue of sub-paragraph (1) in any case where shares are transferred by a nominee of a recognised investment exchange who is designated for the purposes of regulation 47(6) in the rules of the investment exchange in question.

• (3) In these Regulations “transfer documents", in relation to any transfer of registered shares except a transfer made by means of electronic communication, means—

• (a) a stock transfer within the meaning of the Stock Transfer Act 1963 or the Stock Transfer (Northern Ireland) Act 1963 which complies with the requirements of that Act as to the execution and contents of a stock transfer or such other instrument of transfer as is authorised by, and completed and executed in accordance with any requirements in, the company’s instrument of incorporation;

• (b) except in a case falling within paragraph (3) or (4) of regulation 47, a share certificate relating to the shares in question;

• (c) in a case falling within paragraph (3) of regulation 47, such other evidence of title to those shares as is required by the instrument of incorporation of the company; and

• (d) such other evidence (if any) as the company may require to prove the right of the transferor to transfer the shares in question.

• (3A) In these Regulations “transfer documents”, in relation to any transfer of registered shares made by means of electronic communication, means—

• (a) such information in such form and transmitted by such method of electronic communication as is in accordance with any requirements imposed by the company for transfers by electronic communication, or if no such requirements are imposed, evidence of the electronic communication by which the transfer is made; and

• (b) such evidence (if any) as the company may require to prove the right of the transferor to transfer the shares in question.

6

• (1) Subject to sub-paragraph (2), in the case of any transfer of shares which meets the requirements of paragraph 4 or 5, the company must—

• (a) register the transfer; and

• (b) where the name of the transferee is not already entered on the register, enter that name on the register.

• (2) The company may refuse to register any transfer of shares made by means of electronic communication.

7

• (1) A company may, before the end of the period of 21 days commencing with the date of receipt of the transfer documents relating to any transfer of shares, refuse to register the transfer if—

• (a) there exists a minimum requirement as to the number or value of shares that must be held by any shareholder of the company and the transfer would result in either the transferor or transferee holding less than the required minimum; or

• (b) the transfer would result in a contravention of any provision of the company’s instrument of incorporation or would produce a result inconsistent with any provision of the company’s prospectus.

• (2) A company must give the transferee written notice of any refusal to register a transfer of shares.

• (3) Nothing in these Regulations requires a company to register a transfer or give notice to any person of a refusal to register a transfer where registering the transfer or giving the notice would result in a contravention of any provision of law (including any law that is for the time being in force in a country or territory outside the United Kingdom).

8

• (1) Where, in respect of any transfer of shares, the company certifies that it has received the transfer documents referred to in paragraph 5(3)(b) or (c) (as the case may be), that certification is to be taken as a representation by the company to any person acting on the faith of the certification that there has been produced to the company such evidence as on its face shows a prima facie title to the shares in the transferor named in the instrument of transfer.

• (2) For the purposes of sub-paragraph (1), a certification is made by a company if the instrument of transfer—

• (a) bears the words “certificate lodged" (or words to the like effect); and

• (b) is signed by a person acting under authority (whether express or implied) given by the company to issue and sign such certifications.

• (3) A certification under sub-paragraph (1) is not to be taken as a representation that the transferor has any title to the shares in question.

• (4) Where a person acts on the faith of a false certification by a company which is made negligently or fraudulently, the company is liable to pay to that person any damages sustained by him.

Transfer of bearer shares

9

A transfer of title to any bearer share in a company is effected by the transfer from one person to another of the instrument mentioned in regulation 48 which relates to that share.

10

Where the holder of bearer shares proposes to transfer to another person a number of shares which is less than the number specified in the instrument relating to those shares, he may only do so if he surrenders the instrument to the company and obtains a new instrument specifying the number of shares to be transferred.

Miscellaneous

11

Nothing in the preceding provisions of this Schedule prejudices any power of the company to register as shareholder any person to whom the right to any shares in the company has been transmitted by operation of law.

12

A transfer of registered shares that are held by a deceased person at the time of his death which is made by his personal representative is as valid as if the personal representative had been the holder of the shares at the time of the execution of the instrument of transfer.

13

On the death of any one of the joint holders of any shares, the survivor is to be the only person recognised by the company as having any title to or any interest in those shares.

SCHEDULE 5 — AUDITORS

Eligibility

1

No person is eligible for appointment as auditor of an open-ended investment company unless he is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006.

2

• (1) A person is ineligible for appointment as auditor of an open-ended investment company if he is—

• (a) an officer or employee of the company; or

• (b) a partner or employee of such a person, or a partnership of which such a person is a partner.

• (2) For the purposes of sub-paragraph (1), an auditor of a company is not to be regarded as an officer or employee of the company.

• (3) A person is also ineligible for appointment if there exists between that person, or any associate of that person, and the company a connection of any such description as may be specified by regulations made by the Secretary of State under section 1214(4) of the Companies Act 2006.

• (4) In sub-paragraph (3) “associate” has the same meaning as in Part 42 of that Act (see section 1260 of that Act).

• (5) The power of the Secretary of State to make regulations under section 1214(4) of that Act for the purposes of subsection (1) of that section in relation to statutory auditors is exercisable, subject to the same conditions, for the purposes of sub-paragraph (3) above in relation to auditors of open-ended investment companies.

3

• (1) No person is to act as auditor of a company if he is ineligible for appointment to the office.

• (2) If during his term of office an auditor of a company becomes ineligible for appointment to the office, he must thereupon vacate office and give notice in writing to the company concerned that he has vacated it by reason of ineligibility.

• (3) A person who acts as auditor of a company in contravention of sub-paragraph (1) or fails to give notice of vacating his office as required by sub-paragraph (2) is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine;

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (4) In the case of continued contravention he is liable on a second or subsequent summary conviction (instead of the fine mentioned in sub-paragraph (3)(b)) to a fine not exceeding £100 in respect of each day on which the contravention is continued.

• (5) In proceedings against a person for an offence under this paragraph it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, ineligible for appointment.

Appointment

4

• (1) Every company must appoint an auditor or auditors in accordance with this paragraph.

• (2) Subject to sub-paragraphs (6) and (7), a company must, at each general meeting at which the company’s annual report is laid, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next general meeting at which an annual report is laid.

• (3) Subject to sub-paragraph (6), the first auditors of a company may be appointed by the directors of the company at any time before the first general meeting of the company at which an annual report is laid; and auditors so appointed are to hold office until the conclusion of that meeting.

• (4) Where no appointment is made under sub-paragraph (3), the first auditors of any company may be appointed by the company in general meeting.

• (5) Subject to sub-paragraph (5A), no rules made under section 340 of the Act (appointment of auditors) apply in relation to open-ended investment companies.

• (5A) Rules may be made under section 340 of the Act in relation to open-ended investment companies that are UCITS.

• (6) On the date on which the holding of an annual general meeting is dispensed with in accordance with regulation 37A, any auditor or auditors appointed in accordance with sub-paragraph (2) or (3) ceases to hold office and the directors must forthwith re-appoint the auditor or auditors or appoint a new auditor or auditors.

• (7) The directors of any company which does not hold annual general meetings must appoint the auditor or auditors.

5

If, in any case, no auditors are appointed as required in paragraph 4, the Authority may appoint a person to fill the vacancy.

6

• (1) The directors of a company, or the company in general meeting, may fill a casual vacancy in the office of auditor.

• (2) While such a vacancy continues, any surviving or continuing auditor or auditors may continue to act.

7

• (1) Sub-paragraphs (2) to (5) apply to the appointment, as auditor of a company, of a partnership constituted under the law of England and Wales or Northern Ireland, or under the law of any country or territory in which a partnership is not a legal person; and sub-paragraphs (3) to (5) apply to the appointment as such an auditor of a partnership constituted under the law of Scotland, or under the law of any country or territory in which an partnership is a legal person.

• (2) The appointment is, unless the contrary intention appears, an appointment of the partnership as such and not of the partners.

• (3) Where the partnership ceases, the appointment is to be treated as extending to—

• (a) any partnership which succeeds to the practice of that partnership and is eligible for the appointment; and

• (b) any person who succeeds to that practice having previously carried it on in partnership and is eligible for the appointment.

• (4) For this purpose a partnership is to be regarded as succeeding to the practice of another partnership only if the members of the successor partnership are substantially the same as those of the former partnership; and a partnership or other person is to be regarded as succeeding to the practice of a partnership only if it or he succeeds to the whole or substantially the whole of the business of the former partnership.

• (5) Where the partnership ceases and no person succeeds to the appointment under sub-paragraph (3), the appointment may with the consent of the company be treated as extending to a partnership or other person eligible for the appointment who succeeds to the business of the former partnership or to such part of it as is agreed by the company to be treated as comprising the appointment.

Rights

8

• (1) The auditors of a company have a right of access at all times to the company’s books, accounts and vouchers and are entitled to require from the company’s officers such information and explanations as they think necessary for the performance of their duties as auditors.

• (2) An officer of a company commits an offence if he knowingly or recklessly makes to the company’s auditors a statement (whether written or oral) which—

• (a) conveys or purports to convey any information or explanations which the auditors require, or are entitled to require, as auditors of the company; and

• (b) is misleading, false or deceptive in a material particular.

• (3) A person guilty of an offence under sub-paragraph (2) is 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.

9

• (1) The auditors of a company are entitled—

• (a) to receive all such notices of, and other communications relating to, any general meeting of the company as a shareholder of the company is entitled to receive;

• (b) to attend any general meeting of the company; and

• (c) to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditors.

• (2) The right to attend and be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting.

Remuneration

10

• (1) The remuneration of auditors of a company who are appointed by the company in general meeting must be fixed by the company in general meeting or in such manner as the company in general meeting may decide.

• (2) The remuneration of auditors who are appointed by the directors or the Authority must, as the case may be, be fixed by the directors or the Authority (and be payable by the company even where it is fixed by the Authority).

11

• (1) Subject to sub-paragraph (2), the power of the Secretary of State to make regulations under section 494 of the Companies Act 2006 (remuneration of auditors or their associates for non-audit work) in relation to company auditors is to be exercisable in relation to auditors of open-ended investment companies—

• (a) for like purposes; and

• (b) subject to the same conditions.

• (2) For the purposes of the exercise of the power to make regulations under section 494 of the Companies Act 2006, as extended by sub-paragraph (1), the reference in section 494(4) to a note to a company’s accounts is to be taken to be a reference to the annual report of an open-ended investment company.

Removal

12

• (1) A company may by resolution remove an auditor from office notwithstanding anything in any agreement between it and him.

• (2) Where a resolution removing an auditor is passed at a general meeting of a company, the company must, not later than 14 days after the holding of the meeting, notify the Authority of the passing of the resolution.

• (3) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor.

Rights on removal or non-reappointment

13

• (1) A resolution at a general meeting of a company—

• (a) removing an auditor before the expiration of his period of office; or

• (b) appointing as auditor a person other than the retiring auditor;

is not effective unless notice of the intention to move it has been given to the open-ended investment company at least 28 days before the meeting at which it is moved.

• (2) On receipt of notice of such an intended resolution, the company must forthwith send a copy to the person proposed to be removed or, as the case may be, to the person proposed to be appointed and to the retiring auditor.

• (3) The auditor proposed to be removed or, as the case may be, the retiring auditor may make with respect to the intended resolution representations in writing to the company (not exceeding a reasonable length) and request their notification to the shareholders of the company.

• (4) The company must (unless the representations are received by the company too late for it to do so)—

• (a) in any notice of the resolution given to the shareholders of the company, state the fact of the representations having been made;

• (b) send a copy of the representations to each of the shareholders whose name appears on the register of shareholders (other than the designated person) and to whom notice of the meeting is or has been sent;

• (c) take such steps as FCA rules may require for the purpose of bringing the fact that the representations have been made to the attention of the holders of any bearer shares; and

• (d) at the request of any holder of bearer shares, provide a copy of the representations.

• (5) If a copy of any such representations is not sent out as required because they were received too late or because of the company’s default or if, for either of those reasons, any steps required by sub-paragraph (4)(c) or (d) are not taken, the auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting.

• (6) Copies of the representations need not be sent out, the steps required by sub-paragraph (4)(c) or (d) need not be taken and the representations need not be read out at the meeting if, on the application of the company or any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the company on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

14

• (1) An auditor who has been removed from office has, notwithstanding his removal, the rights conferred by paragraph 9 in relation to any general meeting of the company at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his removal.

• (2) The reference in paragraph 9 to business concerning the auditors as auditors is to be construed in relation to an auditor who has been removed from office as a reference to business concerning him as former auditor.

Resignation

15

• (1) An auditor of a company may resign his office by depositing a notice in writing to that effect at the company’s head office.

• (2) Such a notice is not effective unless it is accompanied by the statement required by paragraph 18.

• (3) An effective notice of resignation operates to bring the auditor’s term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it.

• (4) The company must, not later than 14 days after the deposit of a notice of resignation, send a copy of the notice to the Authority.

16

• (1) This paragraph applies where a notice of resignation of an auditor is accompanied by a statement of circumstances which he considers ought to be brought to the attention of the shareholders or creditors of the company.

• (2) An auditor may deposit with the notice a signed requisition that a general meeting of the company be convened forthwith for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting.

• (3) The company must, not later than 21 days after the date of the deposit of a requisition under this paragraph, proceed to convene a meeting for a day not later than 28 days after the date on which the notice convening the meeting is given.

• (4) The auditor may request the company to circulate a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation to each of the shareholders of the company whose name appears on the register of shareholders (other than the designated person)—

• (a) before the meeting convened on his requisition; or

• (b) before any general meeting at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his resignation;

and to take such steps as FCA rules may require for the purpose of bringing the fact that the statement has been made to the attention of the holders of any bearer shares.

• (5) The company must (unless the statement is received by it too late for it to do so)—

• (a) in any notice or advertisement of the meeting given or made to shareholders of the company, state the fact of the statement having been made;

• (b) send a copy of the statement to every shareholder of the company to whom notice of the meeting is or has been sent; and

• (c) at the request of any holder of bearer shares, provide a copy of the statement.

• (6) If a copy of the statement is not sent out or provided as required because it was received too late or because of the company’s default the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.

• (7) Copies of a statement need not be sent out or provided and the statement need not be read out at the meeting if, on the application of the company or any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the company on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

17

• (1) An auditor who has resigned has, notwithstanding his removal, the rights conferred by paragraph 9 in relation to any such general meeting of the company as is mentioned in paragraph 16(4)(a) or (b).

• (2) The reference in paragraph 9 to business concerning the auditors as auditors is to be construed in relation to an auditor who has resigned as a reference to business concerning him as former auditor.

Statement by auditor ceasing to hold office

18

• (1) Where an auditor ceases for any reason to hold office, he must deposit at the head office of the company a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the attention of the shareholders or creditors of the company or, if he considers that there are no such circumstances, a statement that there are none.

• (2) The statement must be deposited—

• (a) in the case of resignation, along with the notice of resignation;

• (b) in the case of failure to seek re-appointment, not less than 14 days before the end of the time allowed for next appointing auditors; and

• (c) in any other case, not later than the end of the period of 14 days beginning with the date on which he ceases to hold office.

• (3) If the statement is of circumstances which the auditor considers should be brought to the attention of the shareholders or creditors of the company, the company must, not later than 14 days after the deposit of the statement, either—

• (a) send a copy of the statement to each of the shareholders whose name appears on the register of shareholders (other than the designated person) and take such steps as FCA rules may require for the purpose of bringing the fact that the statement has been made to the attention of the holders of any bearer shares; or