• COLL Part 7.2 COLL Part 7.2 Investments Generally—QFC retail schemes

    • COLL 7.2.1 Investment Powers Generally—QFC Retail Schemes

      (1) The scheme property of a QFC retail scheme must be invested only in investments mentioned in rule 7.2.2 (Permissible investments generally—QFC retail schemes) to which the scheme is dedicated.

      Note Investment and dedicated are defined in the glossary.
      (2) The scheme property of a QFC retail scheme must be invested and used only in accordance with the relevant provisions of this chapter, including within any limit or other restriction (however described) of this chapter.
      (3) The constitutional document and the latest filed prospectus of a QFC retail scheme may further restrict—
      (a) the kinds of property in which the scheme property may be invested; and
      (b) the proportion of the capital property of the scheme that may be invested in investments of any kind; and
      (c) the kinds of transactions permitted by the scheme and any relevant limits; and
      (d) the borrowing powers of the scheme.

      Note Constitutional document is defined in r 3.1.1. Capital property is defined in the glossary.
      (4) Subrule (3) does not limit the further restrictions that the constitutional document and latest filed prospectus may impose on investment and borrowing by the scheme or on the use of the scheme property.
      (5) The operator must ensure that any further restrictions are complied with.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 7.2.2 Permissible Investments Generally— QFC Retail Schemes

      The scheme property of a QFC retail scheme (other than a QFC retail property fund) must be invested only in any 1 or more of the following:

      (a) transferable securities;
      (b) money-market instruments;
      (c) units in schemes;
      (d) derivatives and forward transactions;
      (e) deposits.

      Note 1 A QFC retail scheme cannot invest in precious metals or commodity contracts. A QFC retail scheme that is a QFC retail property fund can invest in immovables, property-related assets and other investments (see rule 12.1.4).

      Note 2 Transferable security is defined in rule 7.1.6. For investments that are treated as transferable securities, see the following provisions:
      •   r 7.4.2 (Investments in closed—ended schemes as transferable securities—QFC retail schemes)
      •   r 7.4.3 (Investments linked etc to other assets as transferable securities—QFC retail schemes).
      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL 7.2.3 Significant Influence Through Transferable Securities— UCITS Type Schemes

      (1) The operator of a QFC retail scheme must ensure that the scheme does not acquire transferable securities (the relevant securities) issued by a corporation if—
      (a) the relevant securities give the right to vote (whether or not on substantially all matters) at general meetings of the corporation; and
      (b) either—
      (i) the scheme al holds transferable securities issued by the corporation that give the scheme power to influence significantly the conduct of business by the corporation; or
      (ii) acquisition of the relevant securities would give the scheme that power.

      Note Corporation is defined in the glossary.
      (2) For subrule (1), the QFC retail scheme is taken to have power to influence significantly the conduct of business by the corporation if the scheme, or the operator or independent entity (or both acting together), can exercise or control the exercise of at least 1/3 of the voting rights in the corporation because of the transferable securities issued by the corporation that are held by the scheme.
      (3) For subrule (2), any temporary suspension of voting rights must be disregarded.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 7.2.4 Investments by Money-Market Funds—QFC Retail Schemes

      (1) A QFC retail scheme that is a money-market fund must comply with its primary investment objective, and the investment restrictions, mentioned in schedule 2 (Constitutional document content—QFC schemes), rule S2.33 (Primary investment objective etc—QFC money-market funds).

      Note Money-market fund is defined in r 1.3.12.
      (2) For the investment restrictions, an approved money-market instrument is a high-quality approved money-market instrument if—
      (a) it has been rated by at least 1 rating agency; and
      (b) it has been awarded the highest available credit rating by each rating agency that has rated it.

      Note Approved money-market instrument is defined in r 7.1.5. Rating agency is defined in INAP.
      (3) If an approved money-market instrument forms part of the scheme property of a QFC retail scheme that is a money-market fund, the operator must monitor the instrument to ensure that it continues to be of high quality, taking into account both its credit risk and its final maturity.
      (4) A QFC retail scheme that is a money-market fund must provide liquidity through same day or next day settlement.
      (5) The weighted average maturity of its investments must not exceed 60 days.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)