Collective
Investment Funds (Unclassified Funds) (Prospectuses) (Jersey) Order 1995
PART 1
General
1 Interpretation
(1) In
this Order, unless the context otherwise requires –
“articles”,
“cancellation”, “constituent part”, “creation”,
“custodian”, “directors”, “investment adviser”,
“memorandum”, “repurchase”, “sale”, “trustee”
have the meanings respectively given to them by Article 1 of the General
Provisions Order;
“bearer certificate”
means a certificate representing units of any type in a unit trust or
open-ended investment company, which contains a statement that the bearer of
the certificate is entitled to the number of units of that type represented by
the certificate;
“cancellation price” –
(a) in
relation to units in a unit trust, means the price for each unit payable by the
trustees on the cancellation of units;
(b) in
relation to units in an open-ended investment company, means the price for each
unit payable by the company on the cancellation of units;
“creation price” –
(a) in
relation to units in a unit trust, means the price for each unit payable by the
manager to the trustee on the creation of units;
(b) in
relation to units in an open-ended investment company, means the price for each
unit payable to the company on the creation of units;
“documents constituting
the fund” includes –
(a) in
the case of a unit trust, the trust deed and any other material contracts or
documents; and
(b) in
the case of an open-ended investment company, the memorandum and articles of
association of that company, the custodian agreement and the management
agreement and any other material contracts or documents, and
any agreements entered
into between the functionaries of the fund with each other or with the fund;
“feeder fund”
means an unclassified fund the principal object of which is to enable
participants to participate in or receive profits or income arising from the
acquisition, holding, management or disposal of units in another fund or other
single investment;
“fund” means a
fund which is –
(a) a
collective investment fund; and
(b) an
open-ended investment company; or
(c) a
unit trust;
“fund of funds”
means an unclassified fund the sole object of which is to enable participants
to participate in or receive profits or income arising from the acquisition,
holding, management or disposal of units in 2 or more other funds;
“General Provisions
Order” means the Collective Investment Funds (Recognized Funds) (General
Provisions) Order 1988;
“holding company”
and “subsidiary”, in relation to a company, have the meanings given
in Article 2 of the General Provisions Order;
“Law” means
the Collective
Investment Funds (Jersey) Law 1988;
“manager”
means –
(a) in
relation to a unit trust, the manager, and
(b) in
relation to an open-ended investment company, a separate company appointed by
that company to perform management functions (including duties imposed upon,
and powers exercised by, the directors) on its behalf;
“open-ended
investment company” means an unclassified fund –
(a) that
takes the form of an open-ended investment company;
(b) in
relation to which a certificate granted under Article 8B of the Law is in
force; and
(c) whose
manager is registered under the Financial Services
(Jersey) Law 1998 as a manager in relation to the fund;
“prospectus”
means a prospectus prepared or, as the case may be, revised or substituted in
accordance with Article 2;
“recognized fund”
means a fund in respect of which a recognized fund certificate has been granted
under Article 5 of the General Provisions Order and not cancelled under Article 6
of that Order;
“umbrella fund”
means an unclassified fund which provides for pooling characteristics in
relation to separate parts of the property of the fund and the participants in
which are entitled to exchange units in respect of one part for units in
respect of another;
“unclassified fund”
means a fund which is not a recognized fund;
“unit trust”
means an unclassified fund –
(a) which takes the form of an open-ended unit
trust; and
(b) whose
manager is registered under the Financial Services
(Jersey) Law 1998 as a manager in relation to the fund.[1]
(2) A
reference in this Order to the trustee or the custodian of a fund is a
reference to the trustee in the case of a unit trust and the custodian in the
case of an open-ended investment company, and a reference in this Order to the
trust deed or the articles is a reference to the trust deed in the case of a
unit trust and the articles in the case of an open-ended investment company..
2 Preparation of prospectus
(1) A
prospectus in the English language stating prominently that it is a prospectus
prepared in accordance with this Order, and complying with the requirements of
the Schedule shall be prepared by –
(a) in
the case of a unit trust, the manager; and
(b) in
the case of an open-ended investment company, the directors, or the manager.[2]
(2) A
prospectus shall be revised if any significant change occurs in the matters
stated therein or any significant new matter arises which ought to be stated
therein.
(3) A
revision of a prospectus may take the form of a complete substitution for the previous
prospectus or of a supplement to that prospectus.
3 Publication of prospectus
(1) The
manager of an unclassified fund and, in the case of an open-ended investment
company, the directors –
(a) shall
not market units in the fund unless –
(i) a prospectus has
been prepared in accordance with Article 2,
(ii) the
consent of the Commission has been obtained under paragraph (4), and
(iii) a
copy of the prospectus has been sent to the Commission and to the trustee or
the custodian; and
(b) shall
ensure that any sale of units in the fund to any person is not effected unless
that person has been offered free of charge a copy of the prospectus and of the
latest annual report and any subsequent half-yearly report.
(2) Subject
to paragraph (3), the requirement of paragraph (1)(b) to offer a free
copy of the prospectus and reports before effecting a sale of units in the fund
does not apply if the sale is effected otherwise than in the course of a
conversation conducted face-to-face or by telephone.
(3) Where
a sale of units in the fund is effected in the circumstances described in paragraph (2),
the manager must send, free of charge, a copy of the prospectus and latest
annual report and any subsequent half-yearly report to the purchaser if he or
she asks for them.
(4) The
Commission may give its consent to the marketing of units in the fund by means
of a prospectus which does not comply in every respect with the requirements of
Article 2 if it is satisfied that the deviation from those requirements
does not affect the substance of the prospectus or is not calculated to
mislead. [3]
4 Inspection of prospectus
The manager of an
unclassified fund shall make a copy of the prospectus available for inspection
by any member of the public free of charge at all times during ordinary office
hours at the principal place of business in Jersey of the manager and, in the
case of an open-ended investment company, of that company.
5 Compensation for false or misleading prospectus
(1) The
following persons are to be treated as responsible for a
prospectus –
(a) in
the case of a unit trust, the manager and every person who has authorized the
contents of the prospectus or in the case of parts of the prospectus, has
authorized those parts; and
(b) in
the case of an open-ended investment company, the manager (where the prospectus
has been prepared by him or her) and the directors of the company and every person
who has authorized the contents of the prospectus or, in the case of parts of
the prospectus has authorized those parts.
(2) A
person who is under paragraph (1) responsible for any prospectus shall,
subject to Article 6, be liable to pay compensation to any person who has
purchased or agreed to purchase units in the fund and suffered loss as a result
of any untrue or misleading statement in the prospectus or the omission from it
of any matter required by this Order to be included therein.
(3) Where
this Order requires a prospectus to include information as to any particular
matter on the basis that the prospectus must include a statement either as to
that matter or, if such be the case, that there is no such matter, the omission
from the prospectus of the information shall be treated for the purposes of paragraph (2)
as a statement that there is no such matter.
(4) Nothing
in this Article shall make a person responsible for a prospectus by reason only
of his or her having given advice in a professional capacity as to the contents
of a prospectus.
6 Exemption from liability to pay compensation
(1) A
person shall not incur any liability under Article 5 for any loss in
respect of units in a fund caused by any such statement or omission as is there
mentioned if he or she satisfies the court that, at the time when the
prospectus was prepared or ought to have been revised in accordance with Article 2,
he or she reasonably believed, having made such enquiries (if any) as were
reasonable, that the statement was true and not misleading or that the matter
the omission of which caused the loss was properly omitted and
that –
(a) he or
she continued in that belief until the time when the units were acquired;
(b) the
units were acquired before it was reasonably practicable to bring a correction
to the attention of persons likely to acquire units in the fund;
(c) before
the units were acquired he or she had taken all such steps as it was reasonable
to have taken to secure that a correction was brought to the attention of
persons likely to acquire units in the fund; or
(d) the person
who acquired the units was not materially influenced by that statement or
omission in making his or her decision to acquire the units.
(2) Without
prejudice to paragraph (1), a person shall not incur any liability under Article 5
for any loss in respect of any units in a fund caused by any such statement or
omission as is there mentioned if he or she satisfies the court –
(a) that
before the units were acquired a correction had been published in a manner
calculated to bring it to the attention of persons likely to participate in the
fund; or
(b) that
he or she took all reasonable steps to secure such publication and reasonably
believed that it had taken place before the units were acquired.
(3) A
person shall not incur any liability under Article 5 if he or she
satisfies the court that the person suffering the loss acquired the units in
question with knowledge that the statement was false or misleading or of the
omitted matter, as the case may be.
(4) A
person shall not incur any liability under Article 5 as a result of a
failure to prepare a revised prospectus in accordance with Article 2(2) if
he or she satisfies the court that he or she reasonably believed that the
change or new matter in question was not such as to call for a revision of the
prospectus under that paragraph.
7 Citation
This Order may be cited
as the Collective Investment Funds (Unclassified Funds) (Prospectuses) (Jersey)
Order 1995.
SCHEDULE[4]
(Article 2)
INFORMATION TO BE CONTAINED
IN A PROSPECTUS
1 The manager and, in the
case of an open-ended investment company, the manager and that company
The following particulars
of, in the case of a unit trust, the manager and, in the case of an open-ended
investment company, both that company and the manager, shall be
stated –
(a) its name;
(b) the
nature of its corporate form;
(c) its
place of incorporation;
(d) if it
is a subsidiary, the name of its ultimate holding company and the country or
territory in which that holding company is incorporated;
(e) the
following addresses –
(i) the address of
its registered office,
(ii) the
address of its head office if that is different from the address of its
registered office;
(f) the
date of its incorporation;
(g) if
the duration of its corporate status is limited, when the status will or may
cease;
(h) except
in the case of an open-ended investment company, the amount of its issued share
capital and how much of it is paid up;
(i) the
names of the directors and, in each case, any significant activities of the
director not connected with the business of the manager or, in the case of an
open-ended investment company, that company and the manager;
(j) except
in the case of an open-ended investment company, the nature and extent of any
business other than management of collective investment funds engaged in by it;
(k) if
the manager is also the registrar, that fact.
2 The
trustee or the custodian
The following particulars
of the trustee (in the case of a unit trust) and the custodian (in the case of
an open-ended investment company) shall be stated –
(a) its
name;
(b) the
nature of its corporate form;
(c) its
place of incorporation;
(d) if it
is a subsidiary, the name of its ultimate holding company and the country or
territory in which that holding company is incorporated;
(e) the
address of its registered office;
(f) the
address of its head office if that is different from the address of its
registered office;
(g) the
date of its incorporation;
(h) the
amount of its issued share capital and how much of it is paid up;
(i) a
description of its principal business activity;
(j) the
extent (if any) to which it is not independent of the manager and in the case
of an open-ended investment company, that company;
(k) if
the trustee or custodian is registrar, that fact.
3 The
investment adviser
If the manager employs,
under the terms of a commercial arrangement, the services of an investment
adviser, the following particulars shall be stated –
(a) the
name of the investment adviser;
(b) if
the investment adviser is a body corporate, the address of its registered
office, or, if otherwise, the address of the investment adviser’s
principal place of business;
(c) if
the investment adviser is a body corporate in a group of which the manager is a
member, that fact;
(d) if
the principal activity of the investment adviser is other than providing
services as an investment adviser, what that principal activity is;
(e) the
main terms of the agreement or arrangement between the manager and the
investment adviser (other than those relating to the investment adviser’s
remuneration) and, if the investment adviser has the authority of the manager
to make decisions on behalf of the manager, that fact and a description of the
matters in relation to which the investment adviser has that authority.
4 The
registrar
If, in the case of a unit
trust, the manager or the trustee or, in the case of an open-ended company,
that company, the manager or the custodian employs the services of a registrar,
that is to say, a person who maintains the register of participants in the
fund, that person’s name and address shall be stated.
5 The
auditor
The name and address of
the auditor of the fund shall be stated.
6 Legal
adviser
The name and address of
the legal adviser to the fund shall be stated.
7 The
register of participants
The address, if any,
where the register of participants in the fund can be inspected.
8 Fund service providers
The following details of
each fund service provider in relation to the unclassified fund, whether or not
the provider requires a permit under the Law, or is required to be registered
under the Financial
Services (Jersey) Law 1998, in respect of the fund, shall be
stated –
(a) the
name of the fund service provider;
(b) if
the fund service provider is a body corporate, the address of its registered
office or, if it is not a body corporate, the address of its principal place of
business.
9 The
constitution and objectives of the fund
The following shall be
stated in respect of the fund and, in the case of a feeder fund, in respect of
the other fund (unless the prospectus of the other fund gives the same
information and is attached to the prospectus of the feeder fund) and, in the
case of an umbrella fund, in respect of each constituent part –
(a) the
name of the fund, and previous names in the past 5 years;
(b) the
date on which the fund was established and, if the duration of the fund is not
unlimited, when it will or may terminate;
(c) if
the fund is an open-ended investment company, particulars of its capital
structure;
(d) in
relation to investment policy, full particulars on the investment policy and
investment restrictions to be adopted;
(e) so
far as is material, the extent to which the property of the fund may be
invested in the units of funds which are managed by the manager or by an
associate of the manager;
(f) the
circumstances in which the winding-up of a fund can be decided on, a
description of the procedure to be followed in a winding-up and what the rights
of participants would be in a winding-up;
(g) the
accounting dates.
10 The
characteristics of units in the fund
The following shall be
stated –
(a) in
relation to each available type of unit in the fund, the entitlement of the
holder of that unit to participate in the property of the fund and the income thereof,
a statement of the nominal value (if any) of each type of unit, and, where
there is more than one type of unit, the names given to each type and the
characteristics of each type which distinguish it from the others;
(b) if
the title to the units or to some of the units will be evidenced by the issue
of bearer certificates, that fact;
(c) if
the title to the units or to some of the units is to be evidenced by entries on
a register of unit holders, whether or not certificates evidencing title to
those units will be issued;
(d) in
the case of a unit trust the fact that the nature of the right represented by
units is that of a beneficial interest under a trust and, in the case of an
open-ended investment company, the fact that the nature of the right
represented by units is that of an appropriately described share in that
company;
(e) how
meetings of unit holders are called or how ballots of unit holders are
organised, what voting rights are exercisable by the holders of units and, if
different rights attach to different classes of units, what those different
rights are and, in the case of an open-ended investment company, whether
persons other than unit holders can vote at meetings of unit holders and who
those persons are.
11 Valuation
of property, charges and distributions
The following shall be
stated –
(a) how
frequently the property of the fund will be valued for the purpose of
determining prices at which units in the fund may be sold, repurchased, created
or cancelled and a description of any circumstances in which the fund may be
specially valued;
(b) in
relation to each purpose for which the property of the fund will be required to
be valued, whether it will be valued on an offer basis, a bid basis, a
mid-market basis or on any other specified basis;
(c) if
the price at which units may be purchased from the manager, as principal or
agent, may include a preliminary charge, a statement of the amount of that
charge expressed as a percentage of the creation price of those units (or of
the payment to be made by the investor) which is permitted by the trust deed or
the articles and, if different, the amount currently charged and how it may be
altered;
(d) how
the following remuneration and expenses will be determined where they are
payable out of the property of the fund –
(i) the remuneration
of the manager,
(ii) the
remuneration of the trustee or the custodian,
(iii) the
remuneration and expenses of the registrar, and
(iv) where
the fund is an open-ended investment company, the remuneration and expenses of
the directors;
(e) if
initial charges are levied when distributions are reinvested, that fact;
(f) the
nature of any other expenses or charges payable out of the property of the fund
and how their amounts will be determined;
(g) the
dates in each calendar year on which distributions or dividends are expected to
be paid to participants and, in the case of participants who are the holders of
bearer certificates, how they are to identify themselves for the purposes of
receiving the same;
(h) if
there is to be income equalisation in relation to the fund, that fact together
with an explanation of its meaning and its method of operation.
12 The
sale and repurchase of units in the fund
The following shall be
stated –
(a) the
days and times therein on which the manager or the open-ended investment
company, as the case may be, will be available to receive requests for the sale
and repurchase or the creation and cancellation, as the case may be, of units;
(b) the
procedures for effecting the sale and repurchase or the creation and
cancellation of units and the settlement of transactions and how a holder to
whom no certificate has been issued may produce evidence of title to his or her
units;
(c) the
amounts of the following minima (if they apply) for each type of unit in the
fund –
(i) the minimum
number of units which any one person may hold,
(ii) the
minimum value of units which any one person may hold,
(iii) the
minimum number of units which may be the subject of one transaction of sale or
creation,
(iv) the
minimum value of units which may be the subject of any one transaction of sale
or creation,
(v) the minimum number of
units which may be the subject of one act of repurchase or cancellation,
(vi) the
minimum value of units which may be the subject of one act of repurchase or
cancellation;
(d) the
circumstances in which the repurchase or cancellation of units may be
suspended;
(e) where
and when the most recent prices of units will be published;
(f) the
investment exchanges (if any) on which units in the fund are listed or dealt
with;
(g) whether
the manager, as principal or agent, deals in units at forward or historic
prices and an explanation of those prices;
(h) the
arrangements (if any) for fixed price offers subsequent to the initial offer.
13 General
information
The following shall be
stated –
(a)
(i) brief particulars
including dates of the documents constituting the fund including the rights and
protections available for the benefit of unit holders (by classes if relevant)
and the means available to a holder to assert his or her rights,
(ii) any
indemnities which the fund is permitted to grant,
(iii) in
the case of an open-ended investment company, the role and rights of the directors
of that company, and
(iv) any
provision which would have the effect of exempting or limiting the
responsibility of the manager or trustee or custodian or any director thereof
or, in the case of an open-ended investment company any director of that
company, from liability for any failure to exercise due care and diligence in
the discharge of the functions in respect of the fund;
(b) when
periodic reports will be published and the name and address of the person from
whom the latest report can be obtained;
(c) the
address at which copies of the documents constituting the fund and of the most
recent audited annual and half-yearly report and accounts may be inspected and
from which such copies may be obtained;
(d) how
the manager of a unit trust will publish, for the benefit of unit holders whose
units are evidenced by bearer certificates, notice –
(i) of the fact that
reports are available for inspection,
(ii) that
a distribution of income has been declared,
(iii) of
the calling of a meeting of participants,
(iv) of
the termination of the fund,
(v) that amendments have
been made to the trust deed,
(vi) that
the prospectus has been revised;
(e) the
extent to which and the circumstances in which–
(i) the fund is
liable to pay or suffer tax on any appreciation in the value of the property of
the fund or on the income of the property of the fund, and
(ii) deductions
by way of withholding tax may be made from distributions of income to
participants and payments made to participants on the repurchase or
cancellation of units;
(f) if
there is a serious possibility that the fund may encounter difficulty in
repatriating income or capital, that fact;
(g) details
of information to be included with any application if a printed form is not
used.
14 Additional
information in all cases
Any other material
information shall be included which –
(a) investors
and their professional advisers (if any) would reasonably require, and would
reasonably expect to find and to have brought fairly to their attention in the
prospectus for the purpose of making an informed judgment about the merits of
participating in the fund and the extent of the risks accepted by so
participating; and
(b) is
within the knowledge of the manager or, in the case of an open-ended investment
company, the directors or the manager, or which the manager or such directors
would have obtained by the making of reasonable enquiries.
15 Umbrella
funds
In the case of a fund
which is an umbrella fund –
(a) the
prospectus shall contain –
(i) a statement to
the effect that an exchange of units in one part of the fund for units in
another part of the fund may in some jurisdictions be a realisation for the
purposes of capital gains taxation,
(ii) a
statement to the effect that except as may be specified in the statement a
holder who exchanges units in one part of the fund for units in another part of
the fund will not be given a right by law to reverse the transaction except as
a new transaction, and
(iii) a
statement describing the arrangements made by the trust deed or the articles
for charges in the case of an exchange of units in one part of the fund for
units in another, including the amount of the charge and the minimum number of
exchanges that will be permitted free of charge; and
(b) if
any information required by this Schedule to be included in a prospectus is
different for different parts of the fund, that information shall be given in
relation to each part of the fund.
16 Statements
to be included
The following statements shall be
included –
(a) a
statement to the following effect –
“If
you are in any doubt about the contents of this prospectus, you should consult
your stockbroker, bank manager, solicitor, accountant or other financial
adviser.”;
(b) a
separate statement, as applicable, to the following effect –
“It
should be remembered that the price of units and the income from them can go
down as well as up and that investors may not receive, on redemption of their
units, the amount that they invested.”;
(c)
(i) in the case of a
unit trust a statement to the following effect –
“The
manager has taken all reasonable care to ensure that the facts stated herein
are true and accurate in all material respects and that there are no other
material facts, the omission of which would make misleading any statement herein
whether of fact or opinion.”,
(ii) in
the case of an open-ended investment company (where the prospectus has been
prepared by the manager) a statement to the following effect –
“The
manager and the directors of the company have taken all reasonable care to
ensure that the facts stated herein are true and accurate in all material
respects and that there are no other material facts, the omission of which
would make misleading any statement herein whether of fact or opinion. The
manager and all the directors accept responsibility accordingly.”,
(iii) in
the case of an open-ended investment company (where the prospectus has not been
prepared by the manager) a statement to the following effect –
“The
directors of the company have taken all reasonable care to ensure that the
facts stated herein are true and accurate in all material respects and that
there are no other material facts, the omission of which would make misleading
any statement herein whether of fact or opinion. All the directors accept responsibility
accordingly.”;
(ca) in the case of a
protected cell company (as defined by the Companies (Jersey) Law
1991) a statement to the following effect –
“This prospectus
is issued in respect of a Jersey protected cell company, which is a specialised
corporate vehicle. It is therefore recommended, if you are unfamiliar with the
nature of Jersey protected cell companies, that you discuss this aspect of the
fund with your usual advisor.”;
(cb) in the case of a
cell of an incorporated cell company (as defined by the Companies (Jersey) Law
1991) a statement to the following effect –
“This prospectus
is issued in respect of a cell of a Jersey incorporated cell company, which is
a specialised corporate vehicle. It is therefore recommended, if you are
unfamiliar with the nature of Jersey incorporated cell companies and their
cells, that you discuss this aspect of the fund with your usual advisor.”;
(d)
(i) if any reference
is made to a permit or permits, or a certificate or certificates having been
granted by the Commission under the Law, a statement to the following
effect –
“The
Commission is protected by this Law against liability arising from the
discharge of its functions under the Law.”,
(ii) if
any reference is made to a consent being granted by the Commission under the Control of Borrowing
(Jersey) Order 1958, a statement to the following effect –
“The
Commission is protected by the Control of Borrowing
(Jersey) Law 1947, against liability arising
from the discharge of its functions under that Law.”;
(e) in
any application form a prominent statement to the effect that the applicant is
strongly recommended to read and consider the prospectus before completing the
application.
17 Date
of publication
The date of publication of the prospectus.