• Part 5.1 Part 5.1 Transactions with Affected Persons

    • PRIV 5.1.1 Who is an Affected Person for a Scheme?

      An affected person for a scheme is any of the following:

      (a) the operator;
      (b) a member (however described) of the governing body of the operator or, for a CIC or CIP, the scheme;
      (c) any investment adviser for the scheme;
      (d) a person to whom functions of the operator in relation to the scheme are outsourced;
      (e) the auditor of the scheme;
      (f) any associated person for any person mentioned in paragraphs (a) to (e);
      (g) a unitholder with 5% or more in value of all the units then in issue.

      Note Governing body, investment adviser, function and associated person are defined in the glossary. CIC and CIP are defined in r 1.2.12 and r 1.2.13 respectively. Outsourcing is defined in r 6.5.1.
      Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • PRIV 5.1.2 Transactions with Affected Persons — General Rule

      (1) This rule applies to a transaction by the operator of a scheme in relation to the scheme property if the transaction is with an affected person.
      (2) The operator must ensure that the transaction—
      (a) is on terms at least as favourable to the scheme as any comparable transaction on normal commercial terms negotiated at arm's length with an independent third party; and
      (b) does not breach any other provision of this part; and
      (c) is not prohibited by the constitutional document or the latest filed prospectus.

      Note 1 Constitutional document is defined in r 3.1.1. Breach and latest filed prospectus are defined in the glossary.

      Note 2 See also sch 1 (Constitutional document content), r S1.27 (Conflicts of interest with affected persons).
      Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • PRIV 5.1.3 Transactions with Affected Persons — Prior Notice to Unitholders

      (1) This rule applies to a proposed transaction by the operator of a scheme in relation to the scheme property if the transaction is with an affected person.
      (2) The operator must not enter into the transaction unless the operator has given the unitholders prior written notice of the transaction (or transactions that include the transaction), including an explanation of how rule 5.1.2 has been complied with in relation to the transaction (or the transactions).

      Example of written notice

      notice given in the scheme's latest filed prospectus
      Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • PRIV 5.1.4 Transactions with Affected Persons — Details Required for Scheme's Annual Reports

      (1) If the operator of a scheme enters into any transaction with an affected person in relation to the scheme property during an annual accounting period, the scheme's annual report for the period must include—
      (a) a summary of the total value of transactions with affected persons in relation to the scheme property during the period; and
      (b) a summary of the nature of the transactions; and
      (c) a summary of the identities of the affected persons; and
      (d) if the unitholders voted at a general meeting held during the period to approve a transaction with an affected person — details of the approval and the results of the voting in relation to the approval.
      (2) If the operator of a scheme does not enter into a transaction with an affected person in relation to the scheme property during an annual accounting period, the scheme's annual report for the period must include a statement to that effect.
      Derived from QFCRA RM/2010-06 (as from 1st January 2011)