COLL 12.3.4 Use of intermediate holding vehicles to hold immovables—QFC retail property funds

(1) Subject to subrule (2), an immovable may be held by a QFC retail property fund through 1 or 2 intermediate holding vehicles, if:
(a) the purpose of each vehicle is to enable the fund to hold immovables; and
(b) either:
(i) the vehicle or each vehicle is majority-owned or majority-held by the fund; or
(ii) an intermediate holding vehicle that is majority-owned or majority-held by the fund (the first vehicle) holds the immovable through another intermediate holding vehicle (the second vehicle) for the sole purpose of directly holding the immovable for the fund (or arranging financing for the fund) and the second vehicle is majority-owned or majority-held by the first.

Note An investment in an intermediate holding vehicle for the purpose of holding an immovable must be treated as if were a direct investment in the immovable, see rule 12.3.2 (3).
(2) The Regulatory Authority may permit a QFC retail property fund to hold an immovable through a series of more than 2 intermediate holding vehicles if the operator of the fund satisfies the authority that it is necessary to do so (for example when it is necessary for the fund to meet a legal or regulatory requirement in another jurisdiction).

Guidance

In giving permission for a fund to have more than 2 intermediate holding vehicles, the Regulatory Authority would be guided by, among others, the structure of the fund and whether the structure is clear, easily understood and transparent to retail investors.
(3) If practicable, an intermediate holding vehicle of a QFC retail property fund must have the same auditor and accounting reference date as the fund.
(4) The accounts of any intermediate holding vehicle of a QFC retail property fund must be consolidated into the annual and half-yearly reports of the fund.
(5) Despite subrule (1) (b), the Regulatory Authority may permit a QFC retail property fund (or the first intermediate holding vehicle) to hold an immovable through an intermediate holding vehicle even if the fund or vehicle does not have a majority ownership or holding if the authority is satisfied that less than majority ownership or holding is reasonable in the circumstances and the interests of the unitholders are adequately protected.
Inserted by QFCRA RM/2016-1 (as from 19th September 2016)