PRIV 6.8.1 Name of Scheme etc

(1) The operator of a scheme must ensure that the name of the scheme, any subscheme of the scheme, or a class of units, is not undesirable or misleading.

Note Subscheme is defined in r 1.2.8. Class is defined in the glossary.

Guidance on names of CIC

A scheme that is a CIC must not include in its name the following words, abbreviations of the following words or similar words or abbreviations:
(a) limited;
(b) unlimited;
(c) public limited company.
(2) If the Regulatory Authority is of the opinion that the operator is in breach of subrule (1) in relation to a name, it may direct the operator to take the steps necessary to have the name changed.
(3) In deciding whether to give a direction under subrule (2) in relation to a name for a breach of subrule (1), the Regulatory Authority must consider whether the name—
(a) implies that the scheme (or a part of the scheme) has merits that might, or might not, be justified; or
(b) implies that the operator has merits that might, or might not, be justified; or
(c) is inconsistent with the scheme's investment objectives, strategies or policy; or
(d) might mislead investors into thinking that a person other than the operator is responsible for managing the scheme (or part of the scheme); or
(e) incorrectly implies that the scheme is not—
(i) a collective investment scheme; or
(ii) a private placement scheme; or
(iii) a scheme registered in the QFC or under these rules; or
(iv) if the scheme is an open-ended scheme — an open-ended scheme; or
(v) if the scheme is a closed-ended scheme — a closed-ended scheme; or

Note Open-ended scheme and closed-ended scheme are defined in r 1.2.7.
(f) is, in the Regulatory Authority's opinion, likely to offend the public or a part of the public; or
(g) is substantially similar to the name of—
(i) a scheme registered under COLL or these rules; or
(ii) a subscheme of an umbrella scheme registered under COLL or these rules; or
(iii) a class of units for a scheme registered under COLL or these rules; or
(h) implies a degree of security in relation to the capital or income that is not justified.

Examples of names for para (e)
names that include the word 'plan' or 'account'

Examples of names for para (h)
names that include the word 'guaranteed', 'protected' or 'secured'
(4) Subrule (3) does not limit the matters the Regulatory Authority may consider.
(5) If the name includes the word 'guaranteed', 'protected' or 'secured' (or a similar word), the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it of the matters mentioned in subrules (8) and (9).
(6) If the name indicates or implies a guaranteed capital return, income return or both, the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it—
(a) that the total amount paid for a unit is guaranteed under a guarantee; and
(b) of the matters mentioned in subrules (8) and (9).
(7) If the name indicates or implies a degree of capital security (for example, the words 'capital protected' or words with a similar meaning), the Regulatory Authority may regard the name as undesirable or misleading unless the operator satisfies it—
(a) that an amount not materially less than the total amount paid for a unit is guaranteed under a guarantee; and
(b) that the scheme's investment objectives, strategies and policy show a clear intention to provide a material degree of security in relation to the total amount paid for a unit; and
(c) that the degree of capital security is apparent from the name and clearly stated in the latest filed prospectus; and
(d) of the matters mentioned in subrules (8) and (9).
(8) For subrule (5), (6) or (7), the operator must satisfy the Regulatory Authority that the scheme has a guarantee in relation to which all the following requirements are met:
(a) the guarantee is given by a person other than the operator or an associated person for the operator;

Note Associated person is defined in the glossary.
(b) the guarantor has the authority and resources to honour the terms of the guarantee;
(c) the guarantee covers all unitholders of the scheme and is legally enforceable by each unitholder or by a person acting on the unitholder's behalf;
(d) the guarantee relates to the total amount paid for a unit;
(e) the guarantee provides for payment at a stated date or dates and is unconditional although reasonable commercial exclusions such as force majeure may be included;
(f) if the guarantee applies to different classes of units — it is identical in its application to all classes except for differences attributable to income already received, or charges already incurred, by the different classes of units.
(9) For subrule (5), (6) or (7), the operator must also satisfy the Regulatory Authority that the terms of the guarantee and the credentials of the guarantor are clearly set out in detail in the latest filed prospectus and that any exclusions such as force majeure are highlighted.
(10) In deciding whether it is satisfied for subrule (7), the Regulatory Authority must take into account whether the degree of capital security implied by the name fairly reflects the nature of the arrangements for providing the security.
(11) Subrule (10) does not limit the matters the Regulatory Authority may take into account for subrule (7).
(12) In this rule:

total amount paid, for a unit, includes any charge or other cost paid or incurred when the unit was bought.
Derived from QFCRA RM/2010-06 (as from 1st January 2011)