COLL 12.5.9 Borrowing by QFC retail property funds

(1) A QFC retail property fund may borrow money (directly or through any intermediate holding vehicle) for the use of the fund to finance an investment or for operating purposes. The loan must be repaid out of the scheme property.
(2) Money may be borrowed under subrule (1) only from an eligible bank.
(3) The operator of the fund must ensure that any borrowing is entered into, maintained and monitored in accordance with the borrowing policy as stated in the fund's prospectus. The operator must have regard in particular to:
(a) the duration of any borrowing; and
(b) the number of times the fund borrows in any period.
(4) The operator of the fund must also ensure that the fund's total borrowing does not, on any day, exceed 50% of its gross asset value.
(5) All borrowing by the fund must be at arm's length. The operator may pledge the fund's assets to secure the borrowing.
(6) If the borrowing limit is exceeded, the operator must use its best endeavours to reduce the excess borrowing as soon as practicable. The operator must notify the unitholders and the Regulatory Authority of:
(a) the breach;
(b) the cause of the breach; and
(c) any action that has been, or will be, taken to correct the breach.
(7) For this rule, borrowing by intermediate holding vehicles of the fund must be aggregated in calculating the total of the fund's borrowing.
(8) This rule is subject to the obligation of the fund to comply with any restriction in the constitutional document. This rule does not apply to back-to-back borrowing.
Inserted by QFCRA RM/2016-1 (as from 19th September 2016)