The Open-Ended Investment Companies Regulations 2001

• (b) apply to the court;

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

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

• (5) If the court is satisfied that the auditor 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 auditor notwithstanding that he 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 (3)(a) in relation to the statement deposited under sub-paragraph (1).

• (6) If the court is not so satisfied, the company must, not later than 14 days after the court’s decision, send to each of the shareholders a copy of the auditor’s statement and notify the auditor of the court’s decision.

• (7) The auditor must, not later than 7 days after receiving such a notice, send a copy of the statement to the Authority.

• (8) Where notice of appeal is filed not later than 14 days after the court’s decision, any reference to that decision in sub-paragraphs (5) and (6) is to be construed as a reference to the final determination or withdrawal of that appeal, as the case may be.

19

• (1) If a person ceasing to hold office as auditor fails to comply with paragraph 18 he 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.

• (2) In proceedings for an offence under sub-paragraph (1), it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

20

Section 249(1) of the Act (disqualification of auditor for breach of trust scheme rules) applies to a failure by an auditor to comply with a duty imposed on him by FCA rules as it applies to a breach of trust scheme rules.

SCHEDULE 6 — MERGERS AND DIVISIONS

1

This Schedule applies to any reconstruction or amalgamation involving an open-ended investment company which takes the form of a scheme described in paragraph 4 other than one to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2011 applies.

2

An open-ended investment company may apply to the court under section 896 or 899 of the Companies Act 2006 (power of company to compromise with creditors and members) in respect of a scheme falling within any of sub-paragraphs (a) to (c) of paragraph 4(1) where—

• (a) the scheme in question involves a compromise or arrangement with its shareholders or creditors or any class of its shareholders or creditors; and

• (b) the consideration for the transfer or each of the transfers envisaged by the scheme is to be—

• (i) shares in the transferee company receivable by shareholders of the transferor company; or

• (ii) where there is more than one transferor company and any one or more of them is a public company, shares in the transferee company receivable by shareholders or members of the transferor companies (as the case may be);

in each case with or without any cash payment to shareholders.

3

A public company may apply to the court under section 896 or 899 of the Companies Act 2006 in respect of a scheme falling within sub-paragraph (b) or (c) of paragraph 4(1) where—

• (a) the scheme in question involves a compromise or arrangement with its members or creditors or any class of its members or creditors; and

• (b) the consideration for the transfer or each of the transfers envisaged by the scheme is to be—

• (i) shares in the transferee company receivable by members of the transferor company; or

• (ii) where there is more than one transferor company and any one or more of them is an open-ended investment company, shares in the transferee company receivable by shareholders or members of the transferor companies (as the case may be),

in each case with or without any cash payment to shareholders.

4

• (1) The schemes falling within this paragraph are—

• (a) any scheme under which the undertaking, property and liabilities of an open-ended investment company are to be transferred to another such company, other than one formed for the purpose of, or in connection with the scheme;

• (b) any scheme under which the undertaking, property and liabilities of two or more bodies corporate, each of which is either—

• (i) an open-ended investment company; or

• (ii) a public company,

are to be transferred to an open-ended investment company formed for the purpose of, or in connection with, the scheme;

• (c) any scheme under which the undertaking, property and liabilities of an open-ended investment company or a public company are to be divided among and transferred to two or more open-ended investment companies whether or not formed for the purpose of, or in connection with, the scheme.

• (2) Nothing in this Schedule is to be taken as enabling the court to sanction a scheme under which the whole or any part of the undertaking, property or liabilities of an open-ended investment company may be transferred to any person other than another such company.

5

An application made by virtue of paragraph 2 or 3 shall be treated as one to which Part 27 of the Companies Act 2006 applies (mergers and divisions of public companies), and the provisions of that Part and Part 26 of that Act have effect accordingly, subject to paragraph 6.

6

• (1) The provisions of the Companies Act 2006 referred to in paragraph 5 have effect with such modifications as are necessary or appropriate for the purposes of this Schedule.

• (2) In particular, any reference in those provisions to a merger by absorption, a merger by formation of a new company or a division is to be taken to be a reference to a scheme falling within sub-paragraph (a), (b) or (c) of paragraph 4(1).

• (3) Without prejudice to the generality of sub-paragraph (1), the following references in those provisions have effect as follows, unless the context otherwise requires—

• (a) any reference to a scheme is to be taken to be a reference to a scheme falling within any of sub-paragraphs (a) to (c) of paragraph 4(1);

• (b) any reference to a company is to be taken to be a reference to an open-ended investment company;

• (c) any reference to members is to be taken to be a reference to shareholders of an open-ended investment company;

• (d) any reference to the registered office of a company is to be taken to be a reference to the head office of an open-ended investment company;

• (e) any reference to the ... articles of a company is to be taken to be a reference to the instrument of incorporation of an open-ended investment company;

• (f) any reference to a report under section 593 of the 2006 Act (public company: valuation of non-cash consideration for shares) is to be taken to be a reference to any report with respect to the valuation of any non-cash consideration given for shares in an open-ended investment company which may be required by FCA rules;

• (g) any reference to annual accounts is to be taken to be a reference to the accounts contained in the annual report of an open-ended investment company;

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (i) any reference to the requirements of the Companies Act 2006 as to balance sheets forming part of a company’s annual accounts is to be taken to be a reference to any requirements arising by virtue of FCA rules as to balance sheets drawn up for the purposes of the accounts contained in the annual report of an open-ended investment company;

• (j) any reference to paid up capital is to be taken to be a reference to the share capital of an open-ended investment company.

SCHEDULE 7 — MINOR AND CONSEQUENTIAL AMENDMENTS

PART I — Primary Legislation

Trustee Investments Act 1961 (c. 62)

1

For paragraph 2A of Part III of Schedule 1 to the Trustee Investments Act 1961 (wider-range investments), substitute—

(2A) In any shares in an open-ended investment company within the meaning of the Open-Ended Investment Companies Regulations 2001.

Stock Transfer Act 1963 (c. 18)

2

For section 1(4)(f) of the Stock Transfer Act 1963 (registered securities to which section 1 applies), substitute—

(f) shares issued by an open-ended investment company within the meaning of the Open-Ended Investment Companies Regulations 2001.

Companies Act 1985 (c. 6)

3

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

4

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

5

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

6

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

7

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

8

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

Company Directors Disqualification Act 1986 (c. 46)

9

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

Pension Schemes Act 1993 (c. 48)

10

In section 38(6) (permitted forms for appropriate schemes), for paragraph (d) substitute—

(d) an open-ended investment company within the meaning of the Open-Ended Investment Companies Regulations 2001.

Limited Liability Partnerships Act 2000 (c. 12)

11

In paragraph 8(2) of the Schedule to the Limited Liability Partnerships Act 2000 (similarity of names), omit the word “and" after “public limited company", and insert at the end—

“open-ended investment company", and

PART II — Subordinate Legislation

The Uncertificated Securities Regulations 1995 (S.I. 1995/3272)

12

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

Signed

Greg Pope — Clive Betts — Two of the Lords Commissioners of Her Majesty’s Treasury — 2001-03-27

Explanatory note

(This note is not part of the Regulations)

Footnotes

Citation, commencement and extent

Interpretation

Appointment

Retirement

Rights

Statement by depositary ceasing to hold office

General

Contents

Location

Index

Inspection

Agent’s default

General

Transfer of registered shares

Transfer of bearer shares

Miscellaneous

Eligibility

Appointment

Rights

Remuneration

Removal

Rights on removal or non-reappointment

Resignation

Statement by auditor ceasing to hold office

Editorial notes