Securities Markets Order, 2013 · As enacted · Part IX
227. Powers of intervention for collective investment scheme
Official textFrom Attorney General's Chambers, unchanged
The Authority may give a direction under this section if it appears to the
Authority that-
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{a)
one or more of the requirements for the granting of a licence or recognition are no longer satisfied;
the operator or the custodian of a licensed or recognised collective investment scheme has contravened, or is likely to contravene, a requirement imposed on him by or under this Order;
the operator or the custodian of such a collective investment scheme has, in purported compliance with any such requirement, knowingly or recklessly given the Authority information which is false or misleading in a material particular; or
none of paragraphs (a) to (c) applies, but it is desirable to give a direction in order to protect the interests of participants or potential participants in such a scheme.
A direction under this section may
require the operator or the custodian of the collective investment scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme;
require the operator or the custodian and trustee of the collective investment scheme to wind it up.
If the licence is revoked, the revocation does not affect any direction made under this section that is in force.
A direction may be given under this section in relation to a collective investment scheme whose licence has been revoked, even if a prior direction under this section was already in force at the time of the 'revocation of the direction.
collective investment scheme
"collective investment scheme" means any investment arrangements with respect to assets of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition/ holding, management or disposal of the property or sums paid out of such profits or income. [2) The arrangements must be such that - (a) the persons who are to participate ("participants") do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions; (b) the arrangements must also have either or both of the following characteristics - (i) the contributions of the participants and the profits or income out of which payments are to be made to them are pooled; (ii) the property is managed as a whole, by or on behalf of the operator of the collective investment scheme; and (c) the arrangements must satisfy the condition set out in subsection (3). (3) The condition referred to in subsection (2)(b) is that the property belongs beneficially to, and is managed by or on behalf of, a company, the trustee of a trust or some other entity or arrangement having as its purpose the investment of its funds with the aim of spreading the investment risk and giving its members the benefit of the results of the management of those funds for or on behalf of that company, trust, entity or arrangement. (4) If the arrangements referred to in subsection (2)(b)(i) provide for such pooling in relation to separate parts of the property, and each part is maintained in a portfolio segregated in the book of the scheme from the other assets of the scheme, the arrangements shall be regarded as constituting a single umbrella collective investment scheme provided that the participants are entitled to exchange rights in one part for rights in another. Operating without licence.
The Authority may, either on its own initiative or on the application of the operator or the custodian of the collective investment scheme, revoke or vary a direction given under this section if it appears to the Authority -
operator
"operator", of a collective investment' scheme, which is an investment company, means- {a) the licensed corporate director of that company which is the management company; {b) in relation to a unit trust, the management company; and {c) in relation to a partnership, the general partner.
in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force; or
in the case of variation, that the direction should take effect or continue in force in a different form.
Terms defined in this Act
collective investment scheme
Defined · s 203"collective investment scheme" means any investment arrangements with respect to assets of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition/ holding, management or disposal of the property or sums paid out of such profits or income. [2) The arrangements must be such that - (a) the persons who are to participate ("participants") do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions; (b) the arrangements must also have either or both of the following characteristics - (i) the contributions of the participants and the profits or income out of which payments are to be made to them are pooled; (ii) the property is managed as a whole, by or on behalf of the operator of the collective investment scheme; and (c) the arrangements must satisfy the condition set out in subsection (3). (3) The condition referred to in subsection (2)(b) is that the property belongs beneficially to, and is managed by or on behalf of, a company, the trustee of a trust or some other entity or arrangement having as its purpose the investment of its funds with the aim of spreading the investment risk and giving its members the benefit of the results of the management of those funds for or on behalf of that company, trust, entity or arrangement. (4) If the arrangements referred to in subsection (2)(b)(i) provide for such pooling in relation to separate parts of the property, and each part is maintained in a portfolio segregated in the book of the scheme from the other assets of the scheme, the arrangements shall be regarded as constituting a single umbrella collective investment scheme provided that the participants are entitled to exchange rights in one part for rights in another. Operating without licence.
custodian
Defined · s 207"custodian", in relation to any form of collective investment scheme, means any person to whom the property subject to the collective investment scheme is entrusted for safekeeping;
operator
Defined · s 207"operator", of a collective investment' scheme, which is an investment company, means- {a) the licensed corporate director of that company which is the management company; {b) in relation to a unit trust, the management company; and {c) in relation to a partnership, the general partner.
trustee
Defined · s 207"trustee", in relation to a collective investment scheme, means the person holding the property in question on trust for the participants;
Part X
Intervention Powers of Authority
Part XI
Complaints Committee and Investor Compensation Scheme
Part XII
Financial Markets Services Panel
Part XIII