• PRIV 6 PRIV 6 Operating Duties and Responsibilities

    • Part 6.1 Part 6.1 Dealing

      • PRIV 6.1.1 Application of pt 6.1 to Umbrella Schemes

        (1) This part applies to each subscheme of an umbrella scheme as if it were a separate scheme.

        Note Umbrella scheme and subscheme are defined in r 1.2.8.
        (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/2010-06 (as from 1st January 2011)

      • PRIV 6.1.2 Initial Offer

        The period of the initial offer for a 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.

        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.1.3 Issue and Redemption of Units Generally

        (1) The operator of a 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) If the scheme is an open-ended scheme, the operator must arrange for the issue and redemption of units as required by the latest filed prospectus.

        Note Open-ended scheme is defined in r 1.2.7 (1).
        (4) If the scheme is an open-ended scheme, the operator 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/2010-06 (as from 1st January 2011)

      • PRIV 6.1.4 Issue and Redemption of Units in Multiple Classes

        (1) This rule applies to a scheme if the scheme is an open-ended scheme that has 2 or more classes of units in issue.

        Note Open-ended scheme is defined in r 1.2.7 (1). 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 either—
        (a) 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
        (b) 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.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.1.5 Limited Issue

        If an open-ended 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 Open-ended scheme is defined in r 1.2.7 (1). Issue, class and latest filed prospectus are defined in the glossary. Constitutional document is defined in r 3.1.1.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.1.6 Issue Only to Qualified Investors

        To remove any doubt, the operator of a 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 scheme, is defined in r 1.2.10 (2).

        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.2 Part 6.2 Valuation and Pricing

      • PRIV 6.2.1 Application of pt 6.2 to Umbrella Schemes

        (1) This part applies in relation to each subscheme of an umbrella scheme as if it were a separate scheme.

        Note Umbrella scheme and subscheme are defined in r 1.2.8.
        (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/2010-06 (as from 1st January 2011)

      • PRIV 6.2.2 Valuation

        (1) For these rules, the value of the scheme property of a scheme is its net asset value.

        Note Net asset value is defined in the glossary.
        (2) To calculate the price of units in the scheme, the operator must conduct a fair and accurate valuation of all scheme property, on a forward price basis, in accordance with—
        (a) these rules; and
        (b) the constitutional document and latest filed prospectus.

        Note Constitutional document is defined in r 3.1.1. Forward price and latest filed prospectus are defined in the glossary.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.2.3 Valuation Points

        (1) An open-ended scheme must have a valuation point on each dealing day, other than a dealing day during the initial offer period.

        Note Open-ended scheme is defined in r 1.2.7 (1). Valuation point, dealing day and initial offer are defined in the glossary.
        (2) The operator of an open-ended scheme must prepare a valuation of the scheme property in accordance with rule 6.2.2 at each valuation point.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.2.4 Prices of Units

        (1) The price of a unit in an open-ended scheme at a valuation point must be calculated by the operator—
        (a) on the basis of the valuation under rule 6.2.3 (2) at the valuation point; and
        (b) using forward prices and in a way that is fair and reasonable as between unitholders; and
        (c) in a way that is otherwise in accordance with the constitutional document and the latest filed prospectus.

        Note Open-ended scheme is defined in r 1.2.7 (1). Constitutional document is defined in r 3.1.1. Valuation point and latest filed prospectus are defined in the glossary.
        (2) For an open-ended scheme, the operator must, on request at any time, provide to any unitholder the price of any class of unit in the scheme, based on the latest valuation under rule 6.2.3 (2).

        Note Class is defined in the glossary.
        (3) The price of a unit in a closed-ended scheme must be calculated by the operator in accordance with the constitutional document and the latest filed prospectus.

        Note Closed-ended scheme is defined in r 1.2.7 (2).
        (4) For a closed-ended scheme, the operator must, on request at any time, provide to any unitholder the most recently calculated net asset value per unit.

        Note Closed-ended scheme is defined in r 1.2.7 (2). Net asset value per unit is defined in the glossary.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.3 Part 6.3 Title and Register

      • PRIV 6.3.1 Unitholder Register Requirements

        (1) The operator of a scheme must ensure that the unitholder register includes—
        (a) the name and address of each person (a relevant person) who is or has been a unitholder (for joint unitholders, no more than 4 persons need to be included); and
        (b) the number or percentage of units (including fractions of a unit) in each class held by each relevant person; and
        (c) the date each relevant person was registered for the units in the person's name and, if relevant, ceased to be registered for the units in the person's name; and
        (d) the number or percentage of units in each class currently in issue.

        Note 1 Unitholder register is defined in the glossary. Unitholder and unit are defined in r 1.2.5 and r 1.2.4 respectively.

        Note 2 For the operator's obligation to keep the register, see r 4.1.7.
        (2) The operator—
        (a) must not enter notice of any trust (whether express, implied or constructive) on the register; and
        (b) is not bound by notice of any trust.
        (3) The operator must rely on the register as conclusive evidence of the persons entitled to the units entered on it.
        (4) The operator must take all reasonable steps to ensure that the information on the register is at all times complete and up to date.
        (5) Without limiting subrule (4), the operator must do the following in relation to the register:
        (a) take reasonable steps to update the register on receiving written notice of a change of name or address of a unitholder;
        (b) ensure that the register, or a copy of the register, is available for inspection in the QFC during ordinary business hours by or on behalf of any unitholder, the Regulatory Authority or the auditor of the scheme;
        (c) on request by or on behalf of any unitholder, give the unitholder a copy of the register entries relating to the unitholder;
        (d) carry out the conversion of units allowed under rule 6.3.4 (Conversion of units).
        (6) If the operator receives written notice of a change of name of a unitholder and a certificate has been issued for the unitholder's units, the operator must also either endorse the existing certificate or issue an updated one.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.3.2 Transfer of Units by Act of Parties

        (1) Every unitholder of a scheme is entitled to transfer units entered in the unitholder register in the unitholder's name by an instrument of transfer in any form that the operator approves, but the operator is under no duty to accept the transfer unless it is permitted by the constitutional document and the latest filed prospectus.

        Note Constitutional document is defined in r 3.1.1. Latest filed prospectus is defined in the glossary.
        (2) However, the operator must not accept the transfer of units entered in the unitholder register unless the transferee is a qualified investor for the scheme.

        Note Qualified investor, for a scheme, is defined in r 1.2.10 (2).
        (3) Every instrument of transfer of units in a scheme must be signed by, or on behalf of, the unitholder transferring the units (or, if the unitholder is a corporation, may be signed by 2 members of its governing body on behalf of the corporation).

        Note Corporation and governing body are defined in the glossary.
        (4) The transferor must be treated as the unitholder until the transferee's name is entered in the unitholder register.
        (5) Every instrument of transfer must be left for registration with the operator accompanied by—
        (a) any document required by the law applying in the QFC; and
        (b) any other evidence reasonably required by the operator.
        (6) The operator must keep an instrument of transfer for at least 6 years after the day it is registered.
        (7) On registration of an instrument of transfer, a record of the transferor, the transferee and the date of transfer must be made in the unitholder register.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.3.3 Certificates for Units

        (1) If units in a scheme are issued or rule 6.3.2 (Transfer of units by act of parties) is complied with in relation to the transfer of units in a scheme, the operator may issue a document evidencing title to the units in accordance with the constitutional document.

        Note Document evidencing title is defined in the glossary. Constitutional document is defined in r 3.1.1.
        (2) However, the operator must issue a document evidencing title as soon as practicable if the procedures for redeeming units require unitholders to surrender the document evidencing title.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.3.4 Conversion of Units

        (1) This rule applies to a scheme if there are 2 or more classes of units offered for issue.

        Note Class and issue are defined in the glossary.
        (2) A unitholder has the right to convert the units from a class to another class if converting the units does not breach the latest filed prospectus.

        Note Latest filed prospectus and breach are defined in the glossary.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.4 Part 6.4 Operator — Appointment and Removal

      • PRIV 6.4.1 Initial Appointment of Operator

        On the registration of a scheme under these rules, the person named in the application for registration as the person who is to become the operator becomes the initial operator of the scheme.

        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.4.2 Removal of Operator

        (1) The unitholders of a scheme may, in accordance with the constitutional document—
        (a) remove the operator; and
        (b) appoint another person as the operator of the scheme.

        Note Constitutional document is defined in r 3.1.1.
        (2) Without limiting subrule (1), the unitholders must, under that subrule, remove the operator (and appoint another person as the operator of the scheme) if the operator is no longer eligible to be the operator of the scheme under rule 4.1.1 (Requirements for operator) because of action taken by the Regulatory Authority under the Financial Services Regulations, whether or not under article 31 (Own initiative action by Regulatory Authority).
        (3) The person appointed as operator under subrule (1) must be eligible to be the operator of the scheme under rule 4.1.1.
        (4) If a replacement operator is appointed under subrule (1), the replacement operator must tell the Regulatory Authority about the appointment immediately, but within 1 business day after the day the appointment is made.

        Examples

        See examples to rule 4.1.4 (2) on the meaning of 'within 1 business day'.
        (5) On the removal of the former operator under subrule (1), the former operator is released from all further obligations under these rules and the constitutional document.

        Note Constitutional document is defined in r 3.1.1.
        (6) Subrule (5) does not affect the rights of a person in relation to an act or omission of the former operator before its removal.
        (7) If the name of the scheme contains a reference to the name of the former operator, the former operator is entitled to require the replacement operator to propose a change to the name of the scheme.
        (8) This rule does not affect—
        (a) any right to the compensation that the former operator has under the constitutional document; or
        (b) any right that the former operator has under the constitutional document in relation to units held by the operator.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.4.3 Retirement of Operator

        (1) The operator of a scheme is entitled to retire as operator in favour of another person if—
        (a) the operator appoints the other person as operator and assigns all its rights and functions as operator to the person; and
        (b) the person is eligible to be the operator of the scheme under rule 4.1.1 (Requirements for operator).
        (2) On the appointment of the person taking effect, the former operator—
        (a) is released from all further obligations under these rules and the constitutional document; and

        Note Constitutional document is defined in r 3.1.1.
        (b) may keep any consideration paid to it in relation to the change without having to account for it to any unitholder.
        (3) Subrule (2) (a) does not affect the rights of any person in relation to an act or omission by the former operator before its retirement.
        (4) On the retirement of the operator, the replacement operator must immediately, but within 1 business day after the day the replacement operator's appointment takes effect, tell the Regulatory Authority about the retirement and the appointment.

        Examples

        See examples to rule 4.1.4 (2) on the meaning of 'within 1 business day'.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.4.4 Consequences of Removal or Retirement of Operator

        (1) If the operator of a scheme is removed or retires, it is entitled to continue to be recorded in the unitholder register for the units it holds.
        (2) Subrule (1) is subject to any restriction in the latest filed prospectus relating to the permitted categories of unitholders.

        Note Latest filed prospectus is defined in the glossary.
        (3) If the operator of a scheme is removed or retires, the operator must, without delay, transfer or deliver the scheme property held by it to the replacement operator unless the QFC Court otherwise orders.
        (4) Until all the scheme property has been transferred or delivered, the operator remains accountable for it to the unitholders.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.5 Part 6.5 Outsourcing

      • PRIV 6.5.1 What is Outsourcing?

        (1) For these rules, outsourcing, for a scheme, is any form of arrangement that involves the operator relying on a third party service provider (including a member of its group) for the exercise of a function in relation to the scheme under these rules, any other Rules, the constitutional document or the latest filed prospectus.

        Note Group, exercise, function and latest filed prospectus are defined in the glossary. Rules is defined in INAP. Constitutional document is defined in r 3.1.1.
        (2) However, outsourcing does not include the following arrangements:
        (a) discrete advisory services (including, for example, the provision of legal advice), audit services, procurement of specialised training, billing, and physical security;
        (b) supply arrangements and functions (including, for example, the supply of electricity or water and the provision of catering and cleaning services);
        (c) purchase of standardised services (including, for example, market information services and the provision of prices);
        (d) the appointment of a group employee to exercise a controlled function for an authorised firm.

        Note Employee, controlled function and authorised firm are defined in the glossary.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.5.2 Outsourcing by Operator

        (1) The operator of a scheme may outsource its functions in relation to the scheme in accordance with this part, and not otherwise.

        Note The outsourcing provisions of CTRL do not apply in relation to an outsourcing of functions under this part (see CTRL, rule 8.1.1).
        (2) However, the operator must not outsource functions if the outsourcing may adversely impact on the Regulatory Authority's ability to supervise the operator's activities.
        (3) Also, the operator must not outsource to a person the function of holding documents evidencing title to scheme property unless the person is prohibited under the outsourcing agreement from giving them to a third party without the operator's agreement.

        Note Document evidencing title is defined in the glossary.
        Amended by QFCRA RM/2012-5 (as from 1st July 2013)
        Amended by QFCRA RM/2021-1 (as from 1st July 2021).

      • PRIV 6.5.3 Outsourcing Notice and Information

        (1) The operator of a scheme must give the Regulatory Authority reasonable notice of its intention to outsource a function under this part.
        (2) The notice must be given at least 10 business days before the day the operator outsources the function.

        Note Business day is defined in the glossary.
        (3) The operator must give the Regulatory Authority any information about the proposed outsourcing that the authority reasonably needs.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.5.4 Provisions Applying to Outsourcing by Operator

        (1) This rule applies in relation to an outsourcing of functions made by the operator of a scheme under this part to another person (the service provider).
        (2) The outsourcing must be in writing and in the form of, or part of, an agreement between the operator and the service provider (the outsourcing agreement).
        (3) The outsourcing agreement must—
        (a) describe in adequate detail the functions (the outsourced functions) to be exercised by the service provider under the outsourcing; and
        (b) describe in adequate detail the service standards to be applied by the service provider in exercising the outsourced functions; and
        (c) state that it is an outsourcing agreement under these rules; and
        (d) ensure that the operator can, at all times, effectively monitor the exercise of the outsourced functions by the service provider; and
        (e) authorise the operator—
        (i) to give further instructions to the service provider about the exercise of the outsourced functions; and
        (ii) to withdraw the outsourcing at any time, including with immediate effect, if this is in the interests of the unitholders; and
        (f) not prevent the operator from acting in the best interests of the unitholders in relation to the outsourced functions; and
        (g) not prevent the scheme from being managed in the best interests of the unitholders; and
        (h) ensure that the scheme's auditor can effectively exercise its functions in relation to the scheme; and
        (i) require the service provider to comply with these rules, and any other law applying in the QFC, in relation to the outsourced functions; and
        (j) apply the law of the QFC to the agreement; and
        (k) ensure that the operator and its internal and external auditors have access to books, records and data relating to the exercise of functions under the outsourcing; and
        (l) ensure that the outsourcing provides appropriate protection for confidential information and personal data; and

        Note Personal data is defined in the glossary.
        (m) provide appropriate contingency arrangements; and

        Note See r 6.5.5 (3) and (4) (Outsourcing management).
        (n) require the service provider to deal with the Regulatory Authority in an open and cooperative way in relation to the exercise of the outsourced functions; and
        (o) require the service provider to give the Regulatory Authority access to books, records and data relating to the exercise of the outsourced functions; and
        (p) require the service provider to give the Regulatory Authority any information it reasonably requires about the outsourced functions; and
        (q) require the service provider to keep any records made by the service provider in relation to the outsourced functions for at least 6 years after the day they are made; and
        (r) prevent the service provider from further outsourcing any of the outsourced functions to another person without the prior approval of the operator.
        (4) Without limiting subrule (3), the operator must take the steps necessary to mitigate against any operational risks in relation to the outsourcing.
        (5) The outsourcing agreement may provide that it has effect only in stated circumstances or subject to stated conditions, limits and directions.
        (6) The outsourcing of the outsourced functions to the service provider—
        (a) does not relieve the operator from any regulatory obligations in relation to the outsourced functions; and
        (b) does not prevent the operator from exercising all or part of the outsourced functions, despite anything in the outsourcing agreement or any other agreement.
        (7) The operator remains responsible for ensuring—
        (a) that all applicable QFC regulatory requirements are complied with in relation to the outsourced functions; and
        (b) that the outsourced functions are otherwise properly exercised.
        (8) The service provider must exercise the outsourced functions subject to the terms of the outsourcing agreement, including any conditions, limits and directions in the outsourcing agreement.
        (9) So far as the outsourcing agreement is expressed to operate as a delegation, these rules, all other laws applying in the QFC, the constitutional document and the latest filed prospectus apply to the service provider in exercising the outsourced functions as if the service provider were the operator.

        Note Constitutional document is defined in r 3.1.1. Latest filed prospectus is defined in the glossary.
        (10) Without limiting subrule (9), a function may be exercised by the service provider on the service provider's state of mind if—
        (a) the exercise of the function is dependent on the operator's state of mind; and
        (b) the function is included in the outsourced functions; and
        (c) the outsourcing agreement is expressed to operate as a delegation in relation to the function.
        (11) So far as the outsourcing agreement is expressed to operate as a delegation, anything done by or in relation to the service provider in relation to the outsourced functions is taken to have been done by or in relation to the operator.
        (12) In this rule:

        state of mind includes knowledge, intention, opinion, belief or purpose.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.5.5 Outsourcing Management

        (1) The operator of a scheme must exercise appropriate skill, care and diligence in selecting, entering into and exiting from outsourcings by it under this part.
        (2) The operator must ensure that—
        (a) 1 or more senior managers approve and periodically review its policy and procedures for functions outsourced under this part, including its procedures for the following:
        (i) the assessment of feasibility;
        (ii) the assessment of risk;
        (iii) the assessment of impact on its functions;
        (iv) the costing of outsourcings;
        (v) the criteria for selecting service providers; and

        Note Senior manager is defined in the glossary.
        (b) every service provider has the ability and capacity to exercise reliably and professionally the functions to be outsourced to the service provider, both at the start of the outsourcing and throughout its life cycle, having regard, for example, to—
        (i) whether the service provider is regulated, to what extent and by whom; and
        (ii) whether the exercise of the outsourced functions is subject to specific regulation or supervision; and
        (iii) the risk that outsourced functions are not properly exercised because of the number of other persons using the service provider; and
        (iv) the financial stability and expertise of the service provider; and
        (v) potential conflicts of interest that may arise in relation to the outsourced functions.
        (3) The operator must ensure that it has a comprehensive contingency arrangement to allow business continuity if there is a significant loss of services from the service provider, including an exit strategy and, if appropriate, partial exit and step-in clauses.
        (4) The contingency arrangement must cover, among other things, the following:
        (a) a significant loss of resources by the service provider;
        (b) financial failure of the service provider;
        (c) an unexpected termination of the outsourcing.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.5.6 Application of pt 6.5 to Further Outsourcing

        (1) This part applies to the further outsourcing, whether or not by the third party service provider, of a function outsourced to the third party service provider under this part as if—
        (a) the further outsourcing of the function were an outsourcing of the function; and
        (b) all necessary changes were made.
        (2) To remove any doubt, this rule is subject to rule 6.5.4 (3) (r) (Provisions applying to outsourcing by operator).
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.5.7 Systems and Controls for Outsourcings

        If the operator of a scheme outsources a function in relation to the scheme under this part, the operator must ensure that, as part of its risk management framework, it implements and maintains systems and controls to monitor the exercise of the outsourced function.

        Note Function and exercise are defined in the glossary.

        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.6 Part 6.6 Payments

      • PRIV 6.6.1 Payments

        (1) The operator of a scheme must ensure that the scheme does not incur any expense in relation to any movable or immovable property unless—
        (a) investing in the property is in accordance with the scheme's investment objectives, strategies and policy; or
        (b) the property is necessary for the direct pursuit of the scheme's business of investing in any investments to which it is dedicated.

        Note Dedicated is defined in the glossary.
        (2) Payments made by the operator out of the scheme property may be made from capital property rather than from income if the basis for this is set out in the latest filed prospectus.

        Note Capital property and latest filed prospectus are defined in the glossary.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.7 Part 6.7 Accounting Periods

      • PRIV 6.7.1 Accounting Periods

        (1) A scheme must have—
        (a) an annual accounting period; and
        (b) a half-yearly accounting period.
        (2) A half-yearly accounting period starts on the first day of an annual accounting period and ends—
        (a) on the day 6 months before the last day of the annual accounting period; or
        (b) on another reasonable date stated in the latest filed prospectus.

        Note Latest filed prospectus is defined in the glossary.
        (3) The first annual accounting period starts—
        (a) on the first day of the initial offer period; or
        (b) if there is not an initial offer period for the scheme — on the date the scheme is registered;
        and, in either case, ends on the next accounting reference date unless subrule (4) applies.

        Note Initial offer and accounting reference date are defined in the glossary.
        (4) If the accounting reference date falls less than 6 months after the start of the first annual accounting period, the operator may extend the period to the next accounting reference date.
        (5) Each annual accounting period after the first period is for 12 months, starting on the next day after the accounting reference date and ending on the next accounting reference date, unless subrule (7) applies.
        (6) Each annual accounting period or half yearly accounting period ends at the end of the day worked out under this rule or, if the operator so decides, at the last valuation point on that day.

        Note Day and valuation point are defined in the glossary.
        (7) If the accounting reference date stated in the scheme's latest filed prospectus is changed, the operator may extend or shorten the annual accounting period by up to 6 months to end on the next accounting reference date.
        (8) Before extending or shortening an annual accounting period under subrule (4) or (7), the operator must—
        (a) consult the scheme's auditor; and
        (b) give the Regulatory Authority reasonable notice.
        (9) If the annual accounting period is extended under subrule (4) or (7) and this results in a longer than usual period before the publication of reports to unitholders, the operator must make summary information about the scheme's investment activities available to unitholders during the period.
        Amended by QFCRA RM/2014-3 (as from 1st January 2015)

    • Part 6.8 Part 6.8 Names

      • PRIV 6.8.1 Name of Scheme etc

        (1) The operator of a scheme must ensure that the name of the scheme, any subscheme of the scheme, or a class of units, is not undesirable or misleading.

        Note Subscheme is defined in r 1.2.8. Class is defined in the glossary.

        Guidance on names of CIC

        A scheme that is a CIC must not include in its name the following words, abbreviations of the following words or similar words or abbreviations:
        (a) limited;
        (b) unlimited;
        (c) public limited company.
        (2) If the Regulatory Authority is of the opinion that the operator is in breach of subrule (1) in relation to a name, it may direct the operator to take the steps necessary to have the name changed.
        (3) In deciding whether to give a direction under subrule (2) in relation to a name for a breach of subrule (1), the Regulatory Authority must consider whether the name—
        (a) implies that the scheme (or a part of the scheme) has merits that might, or might not, be justified; or
        (b) implies that the operator has merits that might, or might not, be justified; or
        (c) is inconsistent with the scheme's investment objectives, strategies or policy; or
        (d) might mislead investors into thinking that a person other than the operator is responsible for managing the scheme (or part of the scheme); or
        (e) incorrectly implies that the scheme is not—
        (i) a collective investment scheme; or
        (ii) a private placement scheme; or
        (iii) a scheme registered in the QFC or under these rules; or
        (iv) if the scheme is an open-ended scheme — an open-ended scheme; or
        (v) if the scheme is a closed-ended scheme — a closed-ended scheme; or

        Note Open-ended scheme and closed-ended scheme are defined in r 1.2.7.
        (f) is, in the Regulatory Authority's opinion, likely to offend the public or a part of the public; or
        (g) is substantially similar to the name of—
        (i) a scheme registered under COLL or these rules; or
        (ii) a subscheme of an umbrella scheme registered under COLL or these rules; or
        (iii) a class of units for a scheme registered under COLL or these rules; or
        (h) implies a degree of security in relation to the capital or income that is not justified.

        Examples of names for para (e)
        names that include the word 'plan' or 'account'

        Examples of names for para (h)
        names that include the word 'guaranteed', 'protected' or 'secured'
        (4) Subrule (3) does not limit the matters the Regulatory Authority may consider.
        (5) If the name includes the word 'guaranteed', 'protected' or 'secured' (or a similar word), the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it of the matters mentioned in subrules (8) and (9).
        (6) If the name indicates or implies a guaranteed capital return, income return or both, the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it—
        (a) that the total amount paid for a unit is guaranteed under a guarantee; and
        (b) of the matters mentioned in subrules (8) and (9).
        (7) If the name indicates or implies a degree of capital security (for example, the words 'capital protected' or words with a similar meaning), the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it—
        (a) that an amount not materially less than the total amount paid for a unit is guaranteed under a guarantee; and
        (b) that the scheme's investment objectives, strategies and policy show a clear intention to provide a material degree of security in relation to the total amount paid for a unit; and
        (c) that the degree of capital security is apparent from the name and clearly stated in the latest filed prospectus; and
        (d) of the matters mentioned in subrules (8) and (9).
        (8) For subrule (5), (6) or (7), the operator must satisfy the Regulatory Authority that the scheme has a guarantee in relation to which all the following requirements are met:
        (a) the guarantee is given by a person other than the operator or an associated person for the operator;

        Note Associated person is defined in the glossary.
        (b) the guarantor has the authority and resources to honour the terms of the guarantee;
        (c) the guarantee covers all unitholders of the scheme and is legally enforceable by each unitholder or by a person acting on the unitholder's behalf;
        (d) the guarantee relates to the total amount paid for a unit;
        (e) the guarantee provides for payment at a stated date or dates and is unconditional although reasonable commercial exclusions such as force majeure may be included;
        (f) if the guarantee applies to different classes of units — it is identical in its application to all classes except for differences attributable to income al received, or charges al incurred, by the different classes of units.
        (9) For subrule (5), (6) or (7), the operator must also satisfy the Regulatory Authority that the terms of the guarantee and the credentials of the guarantor are clearly set out in detail in the latest filed prospectus and that any exclusions such as force majeure are highlighted.
        (10) In deciding whether it is satisfied for subrule (7), the Regulatory Authority must take into account whether the degree of capital security implied by the name fairly reflects the nature of the arrangements for providing the security.
        (11) Subrule (10) does not limit the matters the Regulatory Authority may take into account for subrule (7).
        (12) In this rule:

        total amount paid, for a unit, includes any charge or other cost paid or incurred when the unit was bought.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

      • PRIV 6.8.2 Use of Certain Names

        (1) The operator of a scheme must ensure that the name of the scheme, or of a class of units, does not state or imply that the scheme is an Islamic fund unless the scheme is an Islamic fund.

        Note Islamic fund is defined in r 1.2.9.
        (2) The operator of an umbrella scheme must ensure that the name of a subscheme, or of a class of units of a subscheme, does not state or imply that the subscheme is an Islamic fund unless the subscheme is an Islamic fund.

        Note Umbrella scheme and subscheme are defined in r 1.2.8.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)

    • Part 6.9 Part 6.9 Shari'a Supervisory Board

      • PRIV 6.9.1 Islamic Fund Must have a Supervisory Board

        (1) The operator of a scheme that is an Islamic fund, or an umbrella scheme that has a subscheme that is an Islamic fund, must ensure that there is at all times a Shari'a Supervisory Board for the fund (or subscheme).

        Note Islamic fund is defined in r 1.2.9. Umbrella scheme and subscheme are defined in r 1.2.8.
        (2) Any decision relating to the appointment or dismissal of a member of the Shari'a Supervisory Board, or to a change affecting the board, must be made by the operator.
        (3) CTRL, Part 9.3, applies to a scheme that is an Islamic fund, or an umbrella scheme that has a subscheme that is an Islamic fund, as if—
        (a) the scheme (or subscheme) were an authorised firm to which the Part applies; and

        Note Authorised firm is defined in the glossary.
        (b) a reference to the authorised firm or its governing body were, subject to subrule (2), a reference to the scheme (or subscheme) or the operator, as the context requires; and
        (c) all other necessary changes were made.
        Derived from QFCRA RM/2010-06 (as from 1st January 2011)
        Amended by QFCRA RM/2021-1 (as from 1st July 2021)