COLL 7.4.7 Investments in Associated Schemes—QFC Retail Schemes

(1) For this rule, a scheme is an associated scheme for a QFC retail scheme if the operator of the first scheme is—
(a) the operator of the QFC retail scheme; or
(b) an associate of the operator of the QFC retail scheme.

Note Associate is defined in the glossary.
(2) A QFC retail scheme must not invest in units in an associated scheme unless the latest filed prospectus of the QFC retail scheme clearly states that the scheme property of the QFC retail scheme may include units in the associated scheme.

Note Latest filed prospectus is defined in the glossary.
(3) If—
(a) a QFC retail scheme invests in units in an associated scheme or disposes of units in an associated scheme; and
(b) there is a charge in relation to the investment or disposal;

the operator of the QFC retail scheme must pay the QFC retail scheme the amount payable under subrule (4) or (5) within 4 business days after the day the operator agrees to make the investment or disposal.
(4) For an investment mentioned in subrule (3), the operator of the QFC retail scheme must pay the QFC retail scheme—
(a) any amount by which the consideration paid by the QFC retail scheme exceeds the price that would have been paid for the benefit of the associated scheme if the units were newly issued or sold by the associated scheme; or
(b) if that price cannot be ascertained by the operator—the maximum amount of any charge permitted to be made by the seller of units in the associated scheme.
(5) For a disposal mentioned in subrule (3), the operator of the QFC retail scheme must pay the QFC retail scheme the amount of any charge made in relation to the disposal for the operator of the associated scheme, the operator of the QFC retail scheme or an associate of either operator.
(6) For this rule—
(a) any addition to or deduction from the consideration paid on the acquisition or disposal by a QFC retail scheme of units in an associated scheme that is applied for the benefit of the associated scheme, and is (or is like) a dilution levy made under rule 8.2.16 (Dilution—QFC retail schemes), must be treated as part of the price of the units and not as part of any charge; and
(b) any charge made in relation to an exchange of units in a subscheme or separate part of the associated scheme for units in another subscheme or separate part of that scheme must be included as part of the consideration paid for the units.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)