• COLL Division 8.1.A COLL Division 8.1.A Dealing—QFC Qualified Investor Schemes

    • COLL 8.1.1 Application of Div 8.1.A to Umbrella Schemes—QFC Qualified Investor Schemes

      (1) This division applies to each subscheme of a QFC qualified investor scheme that is an umbrella scheme as if it were a separate QFC qualified investor scheme.

      Note Umbrella scheme and subscheme are defined in r 1.2.11.
      (2) The currency of a subscheme may, if appropriate, be used for the subscheme instead of the base currency of the umbrella scheme.

      Note Base currency is defined in the glossary.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.2 Initial Offer—QFC Qualified Investor Schemes

      (1) The period of the initial offer for a QFC qualified investor scheme, and how it ends, must be set out in the latest filed prospectus and must not be of unreasonable length.

      Note Initial offer and latest filed prospectus are defined in the glossary.
      (2) During the initial offer period, units may only be issued at the initial price.

      Note Initial price is defined in the glossary.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.3 How Units are Issued and Redeemed Etc—QFC Qualified Investor Schemes

      (1) Units in a QFC qualified investor scheme are issued or redeemed on behalf of the scheme by the operator making a record of—
      (a) the issue or redemption; and
      (b) the number or percentage of the units in each class that are issued or redeemed.

      Note Issue, redemption and class are defined in the glossary.
      (2) Units in a QFC qualified investor scheme cannot be issued or redeemed in any other way.
      (3) The time of an issue or redemption under subrule (1) is the time the record is made.
      (4) The operator of a QFC qualified investor scheme may arrange for the independent entity to issue or redeem units on behalf of the scheme if the operator would otherwise be obliged to issue or redeem the units on behalf of the scheme.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.4 Controls Over Issue and Redemption of Units—QFC Qualified Investor Schemes

      (1) The operator of a QFC qualified investor scheme must ensure that at each valuation point there are at least as many units in issue of any class as there are units registered to unitholders of that class.

      Note Valuation point and class are defined in the glossary.
      (2) In issuing or redeeming units, the operator must not do, or fail to do, anything that would, or might, give the operator, or an associated person for the operator, a benefit or advantage at the expense of a unitholder or potential unitholder.

      Note Issue, redemption and associated person are defined in the glossary.
      (3) The operator must, as required by these rules and the latest filed prospectus—
      (a) issue and redeem units on behalf of the scheme; and
      (b) arrange for the payment of money or transfer of assets to or from the independent entity for scheme.

      Note Money and latest filed prospectus are defined in the glossary.
      (4) The operator of must keep a record of the issues and redemptions it makes.
      (5) If the operator breaches subrule (1) or (2), it must—
      (a) correct the breach as quickly as possible; and
      (b) reimburse the scheme any costs the scheme may have incurred in correcting the breach, subject to any reasonable minimum level for reimbursement provided in the latest filed prospectus.

      Note Breach is defined in the glossary.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.5 Issue and Redemption of Units in Multiple Classes—QFC Qualified Investor Schemes

      (1) This rule applies to a QFC qualified investor scheme if the scheme has 2 or more classes of units in issue.

      Note Class is defined in the glossary.
      (2) The operator may treat all, or any 2 or more, of the classes (the relevant classes) as a single class in deciding how many units are to be issued or redeemed by reference to a particular valuation point if—
      (a) either—
      (i) the relevant classes have the same entitlement to participate in the scheme property, and the same liability for charges, expenses, and other payments, that may be recovered from the scheme property; or
      (ii) the relevant classes differ only as to whether income is distributed or accumulated by periodic credit to capital, and the price of the units in each class is calculated by reference to undivided shares in the scheme property; and
      (b) the independent entity gives its prior agreement.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.6 Issue and Redemption Generally—QFC Qualified Investor Schemes

      (1) The operator of a QFC qualified investor scheme must, at all times during a dealing day, be willing to issue units on behalf of the scheme to any eligible person in accordance with any conditions stated in the constitutional document and the latest filed prospectus, unless the operator has reasonable grounds to refuse the issue.

      Note Dealing day, issue and latest filed prospectus are defined in the glossary. Constitutional document is defined in r 3.1.1.
      (2) Conditions mentioned in subrule (1) must be fair and reasonable as between all unitholders and potential unitholders.
      (3) The operator of a QFC qualified investor scheme must, at all times during a dealing day, be willing to redeem on behalf of the scheme units of an eligible unitholder in accordance with any conditions in the constitutional document and the latest filed prospectus, unless the operator has reasonable grounds to refuse the redemption.

      Note Redemption is defined in the glossary.
      (4) On agreeing to redeem units under subrule (3), the operator must arrange for the independent entity to pay the appropriate proceeds of the redemption to the unitholder within any reasonable period provided in the constitutional document or the latest filed prospectus, unless the operator or independent entity has reasonable grounds for withholding payment.
      (5) Payment of proceeds on redemption must be made in any way provided in the latest filed prospectus.
      (6) The way provided for in the latest filed prospectus for subrule (5) must be fair as between redeeming unitholders and continuing unitholders.
      (7) The operator must issue or redeem units at a price calculated at the next valuation point for dealing purposes after receiving the instructions to issue or redeem the units.
      (8) If a QFC qualified investor scheme is operating limited redemption arrangements, the arrangements must provide for the operator to redeem units in the scheme at least once every 6 months.

      Note Limited redemption arrangements is defined in the glossary.

      Guidance on limited redemption periods

      The maximum period between dealing days for a QFC qualified investor scheme will depend on the reasonable expectations of the target investor group and the particular investment objectives, strategies and policy of the scheme. For example, for a scheme aiming to invest in large property developments, the expectation would be that it is reasonable to have a longer period between dealing days for liquidity reasons than for a scheme investing predominantly in listed securities.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.7 When Instructions for Issue and Redemption Must be Given—QFC Qualified Investor Schemes

      (1) The latest filed prospectus of a QFC qualified investor schemes must fix a time before a valuation point (the cut-off point) after which the operator must not accept instructions to issue or redeem units on behalf of the scheme at the valuation point.
      (2) The cut-off point must not be earlier than the close of business on the business day before the valuation point to which it relates.
      (3) However, if there are 2 or more valuation points on a day, the cutoff point for a valuation point must not be earlier than the valuation point immediately before it.

      Examples

      If there are 3 valuations points at 10 am, 12 noon and 2 pm on a business day (the relevant day), the cut-off points for the valuations points must comply with the following:
      (a) the cut-off point for the 10 am valuation point cannot be earlier than the close of business on the business day before the relevant day;
      (b) the cut-off point for the 12 noon valuation point cannot be earlier than 10 am on the relevant day;
      (c) the cut-off point for the 2 pm valuation point cannot be earlier than 12 noon on the relevant day.
      (4) Different cut-off points may be used to differentiate between the methods of submitting instructions to redeem to the operator but not to differentiate between unitholders or potential unitholders.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.8 Limited Issue—QFC Qualified Investor Schemes

      If a QFC qualified investor scheme limits the issue of units in any class, units in the class can only be issued if the issue—

      (a) is in accordance with the constitutional document and the latest filed prospectus; and
      (b) will not materially prejudice any existing unitholders.

      Note Issue, class and latest filed prospectus are defined in the glossary. Constitutional document is defined in r 3.1.1.

      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 8.1.9 Issue Only to Qualified Investors—QFC Qualified Investor Schemes

      To remove any doubt, the operator of a QFC qualified investor scheme must not issue units in the scheme to a person who is not a qualified investor for the scheme.

      Note Issue is defined in the glossary. Qualified investor, for a QFC scheme, is defined in r 1.2.12 (2).

      Derived from QFCRA RM/2010-05 (as from 1st January 2011)