Authorised Collective Investment Schemes (Class A) Rules 2008

Summary

These are the Guernsey Financial Services Commission's detailed rules governing Class A authorised collective investment schemes - the highest, most closely regulated category of Guernsey fund. The rulebook sets out how such schemes must be constituted, how they must deal with investors, what they may invest in and how they must borrow, and how they must be operated on an ongoing basis, including suspension and winding up. It also prescribes the mandatory contents of a scheme's principal documents and prospectus.

• Constitution (Part 3): Sets requirements for how a Class A scheme (unit trust, company scheme, or other structure) must be legally constituted, including its principal documents.
• Investor relations (Part 4): Governs disclosure to investors, prospectus content, unit pricing information, and communications, including additional disclosure required when marketing units in an EEA State.
• Investment and borrowing powers (Part 5): Prescribes permitted investments (transferable securities, money-market instruments, derivatives, property, etc.), diversification limits, eligible markets, and borrowing limits.
• Operating duties and responsibilities (Part 6): Covers valuation and pricing (including single and dual pricing, dilution levies/adjustments), income allocation and distribution, annual and half-yearly reporting, and duties of managers, trustees/directors and auditors.
• Suspension and termination (Part 7): Sets out the circumstances and procedure for suspending dealing in units and for terminating an authorised scheme.
• Transitional provisions (Part 8): Provides for the transition from the predecessor CIS (Class A) Rules 2002, including a defined effective date for full application of the 2008 rules.
• Prospectus and principal document content (Schedules 1 and 2): Set out in detail the mandatory contents of a scheme's principal documents and prospectus, including risk disclosure, fees and expenses, and guarantee/protection arrangements.

The rules apply to authorised Class A schemes and the persons responsible for them, including managers, trustees, directors of company schemes, investment advisers and auditors. They function as the core ongoing regulatory framework for this class of Guernsey fund, supplementing the requirements of the Protection of Investors (Bailiwick of Guernsey) Law.

Key obligations

• Authorised Class A schemes must be constituted and documented in accordance with the requirements of Part 3 and Schedule 1.
• Managers/directors must ensure the prospectus contains all information prescribed in Schedule 2, including risk disclosures, fee/expense details, and information on guarantees or capital protection arrangements.
• Schemes marketing units in another EEA State must include in the prospectus specified additional details on payment/redemption arrangements, document inspection, price publication, and notifications to unitholders in that state.
• Investment and borrowing activity must remain within the limits and eligibility criteria set out in Part 5 (eligible markets, approved securities, derivatives, diversification and borrowing restrictions).
• Managers must operate valuation, pricing, dilution levy/adjustment, income allocation and distribution processes in accordance with Part 6.
• Annual and half-yearly reports must be prepared and made available to unitholders as required under Part 6.
• Suspension of dealing and termination of a scheme must follow the procedures set out in Part 7.
• Schemes transitioning from the CIS (Class A) Rules 2002 must comply with the transitional arrangements in Part 8 by the defined effective date.

Applies to

authorised collective investment schemes (Class A Schemes), unit trust schemes, company schemes, managers of authorised schemes, trustees, directors of company schemes, investment advisers, auditors of authorised schemes

Deadlines

• six months after the Commission gives notice that the CIS (Class A) Rules 2002 are to be revoked: Effective date for full transition from the CIS (Class A) Rules 2002 to these 2008 Rules, as defined in the transitional provisions (Part 8).

Related documents

• This document replaces Collective Investment Schemes (Class A) Rules 2002