COLL 7.3.3 Spread for Transferable Securities and Money-Market Instruments Issued by Single Issuer or Group—QFC Retail Schemes

(1) This rule does not apply to government or public securities.

Note 1 Government or public security is defined in the glossary.

Note 2 See r 7.3.5 (Spread for government or public securities issued by single issuer—QFC retail schemes).
(2) The operator of a QFC retail scheme must ensure that not more than 5% in value of the scheme property consists of transferable securities or money-market instruments (or both) issued by a single person.

Note 1 Transferable security is defined in r 7.1.6.

Note 2 For investments that are treated as transferable securities, see the following provisions:
•   r 7.4.2 (Investments in closed-ended schemes as transferable securities—QFC retail schemes)
•   r 7.4.3 (Investments linked etc to other assets as transferable securities—QFC retail schemes).
(3) However, the 5% limit under subrule (2) is raised to 10% in relation to not more than 40% in value of the scheme property.
(4) Covered bonds need not be taken into account for the purpose of applying the raised limit of 10% in relation to 40% in value of the scheme property.

Note Covered bond is defined in the glossary.
(5) Also, the 5% limit under subrule (2) is raised to 25% in relation to covered bonds if the total value of the covered bonds held does not exceed 80% in value of the scheme property.
(6) In addition, the 5% limit under subrule (2) may be increased to no more than 20% (or 35%) under rule 7.3.4 (Spread exception for schemes replicating indices—QFC retail schemes).
(7) In applying subrules (2) to (6), securities receipts must be treated as equivalent to the underlying security.

Note Securities receipt is defined in the glossary.
(8) The operator of a QFC retail scheme must also ensure that not more than 20% in value of the scheme property consists of transferable securities or money-market instruments (or both) issued by members of a single group.

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