COLL 8.1.6 Issue and Redemption Generally—QFC Qualified Investor Schemes

(1) The operator of a QFC qualified investor scheme must, at all times during a dealing day, be willing to issue units on behalf of the scheme to any eligible person in accordance with any conditions stated in the constitutional document and the latest filed prospectus, unless the operator has reasonable grounds to refuse the issue.

Note Dealing day, issue and latest filed prospectus are defined in the glossary. Constitutional document is defined in r 3.1.1.
(2) Conditions mentioned in subrule (1) must be fair and reasonable as between all unitholders and potential unitholders.
(3) The operator of a QFC qualified investor scheme must, at all times during a dealing day, be willing to redeem on behalf of the scheme units of an eligible unitholder in accordance with any conditions in the constitutional document and the latest filed prospectus, unless the operator has reasonable grounds to refuse the redemption.

Note Redemption is defined in the glossary.
(4) On agreeing to redeem units under subrule (3), the operator must arrange for the independent entity to pay the appropriate proceeds of the redemption to the unitholder within any reasonable period provided in the constitutional document or the latest filed prospectus, unless the operator or independent entity has reasonable grounds for withholding payment.
(5) Payment of proceeds on redemption must be made in any way provided in the latest filed prospectus.
(6) The way provided for in the latest filed prospectus for subrule (5) must be fair as between redeeming unitholders and continuing unitholders.
(7) The operator must issue or redeem units at a price calculated at the next valuation point for dealing purposes after receiving the instructions to issue or redeem the units.
(8) If a QFC qualified investor scheme is operating limited redemption arrangements, the arrangements must provide for the operator to redeem units in the scheme at least once every 6 months.

Note Limited redemption arrangements is defined in the glossary.

Guidance on limited redemption periods

The maximum period between dealing days for a QFC qualified investor scheme will depend on the reasonable expectations of the target investor group and the particular investment objectives, strategies and policy of the scheme. For example, for a scheme aiming to invest in large property developments, the expectation would be that it is reasonable to have a longer period between dealing days for liquidity reasons than for a scheme investing predominantly in listed securities.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)