S.I. No. 78/1989 - European Communities (Undertakings For Collective Investment in Transferable Securities) Regulations, 1989


S.I. No. 78 of 1989.

EUROPEAN COMMUNITIES (UNDERTAKINGS FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES) REGULATIONS, 1989

ARRANGEMENT OF REGULATIONS

PART I

PRELIMINARY

Regulation

1. Citation and commencement.

2. Interpretation.

PART II

SCOPE

3. Scope.

4. Restriction of Unit Trusts Act, 1972.

5. Prohibition on conversion of UCITS into undertaking not subject to Regulations.

PART III

COMPETENT AUTHORITY

6. Establishment of Central Bank as a competent authority.

7. Liability of Bank.

8. Publication of names of authorized UCITS.

PART IV

AUTHORIZATION OF UCITS

9. Situation of UCITS.

10. Prohibition on UCITS carrying on activities in the State without authorization.

11. Requirements for authorization.

12. Approval of Bank necessary for subsequent changes.

13. Applications for authorization.

14. Refusal of authorization and right of appeal.

15. Right of appeal of UCITS situated in an other Member State.

PART V

UNIT TRUSTS

16. Management company.

17. Prohibition on management company engaging in other activities.

18. Assets of a unit trust.

19. Trustee.

20. Obligations of trustee.

21. Liability of trustee.

22. Prohibition on a single company acting as management company and trustee.

PART VI

INVESTMENT COMPANIES

Chapter 1

Investment Companies with Fixed Capital

23. Application of chapter 1.

24. Share capital.

25. Name.

26. Issue of redeemable preference shares.

27. Restriction of Companies Acts.

Chapter 2

Investment Companies with Variable Capital

28. Application of chapter 2.

29. Share capital.

30. Name.

31. Enabling provision regarding purchase of own shares.

32. Purchase of shares at request of shareholder and treatment of purchased shares.

33. Legal reserve.

34. Restriction of Companies Acts.

Chapter 3

General

35. Modification of Act of 1983.

36. Modification of Act of 1986.

Chapter 4

Trustee

37. Assets of investment companies.

38. Trustee.

39. Obligations of trustee.

40. Exemption from requirement to have trustee.

41. Further exemption.

42. Requirement on Bank to inform EC Commission regarding exemptions.

43. Liability of trustee.

44. Prohibition on a single company acting as management company and trustee.

PART VII

INVESTMENT POLICIES OF UCITS

45. Permitted investments.

46. Limitations on investments.

47. Limit of 10 per cent of assets in other investments.

48. Ancillary liquid assets and investment techniques and instruments.

49. Investments in one issuer's securities.

50. Securities issued or guaranteed by States, local authorities or public international bodies.

51. Investments in other UCITS.

52 Acquisition of securities in a linked unit trust or investment company.

53. Acquisition of shares carrying voting rights.

54. Limits in relation to non-voting shares, debt securities or units of a UCITS.

55. Exemptions from Regulations 53 and 54.

56. Subscription rights.

57. Derogations for recently authorised UCITS.

58. Breaches of limits.

PART VIII

GENERAL PROVISIONS RELATING TO UCITS

59. Obligation on UCITS to redeem or repurchase units.

60. Issue of units.

61. Redemption or repurchase of units.

62. Value of assets.

63. Suspension of repurchase or redemption of units.

64. Creation and cancellation of units of a unit trust.

65. Issue of registered certificates or bearer securities.

66. Replacement of management company and trustee.

67. Remuneration and expenditure.

68. Application of income.

69. Borrowing.

70. Loans or guarantees.

71. Sales of securities.

PART IX

PROSPECTUS, REPORTS AND PUBLICATION OF OTHER INFORMATION

72. Publication of prospectus.

73. Annexation of trust deed or articles to prospectus.

74. Offering of prospectus to investors before contract concluded and transmission of prospectus to Bank.

75. Publication of annual and half-yearly reports.

76. Time limits.

77. Contents of annual report.

78. Contents of half-yearly report.

79. Transmission of reports to Bank.

80. Offering of reports to investors before contract concluded.

81. Availability to public of reports.

82. Supply of reports to unit-holders.

83. Auditing requirements in relation to annual report.

84. Publication of issue and redemption prices.

85. Publicity.

PART X

SPECIAL PROVISIONS APPLICABLE TO UCITS MARKETING IN A MEMBER STATE OTHER THAN THAT IN WHICH IT IS SITUATED

86. Prior requirements.

87. Entitlement to market in the State.

88. Compliance with law, regulations and administrative provisions.

89. Advertising.

90. Provision of facilities in relation to unit-holders.

91. Distribution of documents and other information.

92. Power of Bank to prohibit marketing.

93. Generic names.

PART XI

SPECIAL PROVISION IN RELATION TO THE CENTRAL BANK OF IRELAND

94. Collaboration with competent authorities in other Member States.

95. Professional secrecy.

96. Application of professional secrecy to information exchanged with other competent authorities.

97. Restriction on use of information received from other Member States.

PART XII

INSPECTION AND ENFORCEMENT POWERS OF CENTRAL BANK

98. Compliance with additional requirements imposed by Bank.

99. Keeping of books and records.

100. Furnishing of information to Bank.

101. Application by Bank to High Court.

102. Revocation of authorization.

103. Notice of intention to revoke.

104. Bank's powers of intervention.

105. Review of Bank's decision, etc., by High Court.

PART XIII

OFFENCES

106. Penalties.

PART XIV

TRANSITIONAL PROVISION

107. Existing UCITS.

S.I. No. 78 of 1989.

EUROPEAN COMMUNITIES (UNDERTAKINGS FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES) REGULATIONS, 1989

I, RAY BURKE, Minister for Industry and Commerce, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972) and for the purpose of giving effect to Council Directive No. 85/611/EEC of 20 December, 1985(1) as amended by Council Directive No. 88/220/EEC of 22 March, 1988(2) hereby make the following Regulations:

(1) O.J. No. L375/3 of 31/12/85

(2) O.J. No. L100/31 of 19/4/88

PART IPRELIMINARY

1 Citation and commencement.

1. These Regulations may be cited as the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 and shall come into operation on 1 June, 1989.

2 Interpretation

2. (1) In these Regulations:

"articles" in relation to a company has the meaning assigned to it by the Companies Act, 1963 ;

"Companies Acts" means the Companies Act, 1963 , and every enactment which is to be construed with it as one Act;

"competent authority" means the Central Bank of Ireland or, in the case of another Member State, the body or bodies designated by that State to act as a competent authority for the purposes of the Directive;

"the Directive" means the Council Directive of 20 December, 1985 (85/611/EEC) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as amended by Council Directive of 22 March, 1988 (88/220/EEC);

"directors" means those persons who, under the Companies Acts or the trust deed or the memoradnum and articles of association, represent the management company, the investment company or the trustee, or who effectively determine the policy of the management company, the investment company or the trustee;

"issue" means the sale of units or shares by a management company or investment company;

"investment company with fixed capital" means a company so referred to in Regulation 3 (3);

"investment company with variable capital" means a company so referred to in Regulation 3 (3);

"Member State" means a Member State of the European Community;

"repurchase" means the purchase of shares by a management company or investment company;

"redemption" means the purchase of units or shares from a holder by a management company or investment company;

"transferable securities" means securities in respect of which the right of transfer is unrestricted;

"trustee" in relation to a UCITS means an institution referred to as a depository in the Directive;

"UCITS" has the meaning assigned to it by Regulation 3 (1);

"umbrella fund" means a UCITS which is divided into a number of sub-funds and in which the shareholders are entitled to exchange rights in one sub-fund for rights in another;

"undertaking for collective investment in transferrable securities" has the meaning assigned to it by Regulation 3 (2);

"unit" includes a share and any other instrument granting an entitlement to share in the investments or relevant income of a collective investment undertaking;

"unit-holder" means, in relation to a collective investment undertaking, any person who by reason of the holding of units in the undertaking or by reason of having invested capital in the undertaking is entitled to any of the investments or relevant income of the undertaking:

"unit trust" means a collective investment undertaking under which the property in question is held on trust for the participants;

"usual time limits" means those time limits which are acceptable market practice in the context of a particular transaction.

(2) In these Regulations, except where the context otherwise requires, words and expressions which are also used in the Directive have the same meaning as in the Directive.

PART IISCOPE

3 Scope.

3. (1) Subject to paragraph (5), these Regulations apply to undertakings for collective investment in transferable securities (hereinafter referred to as UCITS) situated in the State within the meaning of Regulation 9(1).

(2) For the purposes of these Regulations, UCITS shall be undertakings:

—the sole object of which is the collective investment in transferable securities of capital raised from the public and which operate on the principle of risk-spreading.

and

—the units of which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings' assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not significantly vary from their net value shall be regarded as equivalent to such repurchase or redemption.

(3) Such undertakings may be constituted as—

( a ) unit trusts or

( b ) investment companies with fixed capital or

( c ) investment companies with variable capital whose articles provide that

(i) the amount of the paid up share capital of the company shall at all times be equal to the net asset value of the company, and

(ii) the shares of the company shall have no par value,

provided however that in the cases of (b) and (c) above the companies must be registered as public limited companies.

(4) These Regulations do not apply to investment companies whose assets are invested through the intermediary of subsidiary companies wholly or mainly otherwise than in transferable securities.

(5) These Regulations do not apply to:

( a ) UCITS of the closed-ended type;

( b ) UCITS which raise capital without promoting the sale of their units to the public within the Community or any part of it;

( c ) UCITS the units of which, under the trust deed or the investment company's articles, may be sold only to the public in non-member countries;

( d ) categories of UCITS specified in Annex C to these Regulations.

4 Restriction of Unit Trusts Act, 1972 .

4. The provisions of the Unit Trusts Act, 1972 , shall not apply to undertakings for collective investment in transferable securities authorized under these Regulations or authorized by a competent authority in another Member State in accordance with Council Directive 85/611/EEC.

5 Prohibition on conversion of UCITS into undertaking not subject to Regulations.

5. A UCITS which is subject to these Regulations shall not convert itself into a collective investment undertaking which would not be subject to these Regulations and any purported conversion shall be null and void.

PART IIICOMPETENT AUTHORITY

6 Establishment of Central Bank as a competent authority.

6. (1) The Central Bank of Ireland, hereinafter referred to as the Bank, is hereby designated as a competent authority to carry out the duties provided for in the Directive and shall have all the powers necessary for that purpose.

(2) The Bank may arrange for the discharge of its functions as a competent authority by any committee, sub-committee, officer or employee of the Bank and nothing in these Regulations shall prevent the Bank from being assisted in, or advised on, the discharge of these functions by any committee, sub-committee, officer or employee of the Bank.

7 Liability of Bank.

7. The authorisation of a UCITS by the Bank shall not constitute a warranty as to the performance of a UCITS and the Bank shall not be liable for the performance or default of a UCITS.

8 Publication of names of authorized UCITS.

8. (1) The Bank shall, within twenty-one days after the date of the authorization of a UCITS, publish a notice to that effect in Iris Oifigi�il.

(2) The Bank shall publish from time to time, but not less frequently than once a year, in such manner as it thinks fit, the names of all UCITS which have been authorized by it and whose authorization has not been revoked.

PART IVAUTHORIZATION OF UCITS

9 Situation of UCITS.

9. (1) For the purposes of these Regulations, a UCITS shall be deemed to be situated in the State if the investment company or the management company of a unit trust, hereinafter known as the management company, has its head office and its registered office in the State.

(2) A UCITS not situated in the State shall be deemed, for the purposes of these Regulations, to be situated in the Member State in which the investment company or the management company has its registered office.

10 Prohibition on UCITS carrying on activities in the State without authorization.

10. (1) Subject to Regulation 11 and to paragraph (2) of this Regulation, a UCITS shall not carry on activities as such in the State unless it had been authorized under these Regulations by the Bank.

(2) A UCITS which is situated in another Member State and which has received authorization from the competent authorities in that State may market its units in the State provided it is in compliance with the provisions laid down in Part X of these Regulations.

11 Requirements for authorization.

11. (1) A unit trust shall be authorized only if the Bank has approved the management company, the trust deed, choice of trustee and the name. An investment company shall be authorised only if the Bank has approved its memorandum and articles and its choice of depositary, hereinafter known as the trustee.

(2) The Bank shall not authorize a UCITS if the directors of the management company or of the investment company or of the trustee are not of sufficiently good repute or lack the experience required for the performance of their duties. Appointments to the office of director of the management company or of the investment company must be approved by the Bank.

12 Approval of Bank necessary for subsequent changes.

12. Neither the management company nor the trustee may be replaced, nor may the trust deed or the investment company's articles be amended, without the approval of the Bank.

13 Applications for authorization.

13. An application for authorization shall be made in writing by the management company or the investment company and shall contain such information, including additional information, as the Bank may reasonably specify for the purpose of determining the application.

14 Refusal of authorization and right of appeal.

14. (1) Whenever the Bank decides to refuse authorization it must notify the company of its decision and of the reasons therefor. The company may apply to the High Court in accordance with Regulation 105.

(2) The company shall have the same right to apply to the Court as in paragraph (1) if a decision on authorization has not been taken by the Bank within 6 months of the submission of an application for authorization which includes the information, other than additional information, required under these Regulations.

15 Right of appeal of UCITS situated in another Member State.

15. The right of application under Regulation 105 shall apply to an authorized UCITS situated in another Member State in respect of a decision by the Bank to refuse it permission to market its units in the State or to prohibit further marketing in the State.

PART VUNIT TRUSTS

16 Management company.

16. A management company shall be a body corporate that has its registered office and its head office in the State. It must have, in the opinion of the Bank, sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities.

17 Prohibition on management company engaging in other activities.

17. A management company may not engage in activities other than the management of unit trusts and investment companies and such ancillary activities as would enable it to administer its own assets.

18 Assets of a unit trust.

18. (1) The assets of a unit trust shall be entrusted to a trustee for safe-keeping in accordance with these Regulations.

(2) A trustee's liability as referred to in Regulation 21 shall not be affected by the fact that it has entrusted to a third party some or all of the assets in its safe-keeping.

19 Trustee.

19. (1) A trustee shall either have its registered office in the State or have established a place of business in the State if its registered office is in another Member State.

(2) A trustee shall—

( a ) be a licensed bank as defined by the Central Bank Act, 1971 , with a minimum paid-up share capital of £5 million or its equivalent in foreign currency, or

( b ) be a company which is wholly-owned by such a licensed bank, the liabilities of which are guaranteed by the licensed bank, or

( c ) be a company which has been granted a certificate by the Minister for Finance under section 39B of the Finance Act, 1980 (inserted by section 30 of the Finance Act, 1987 ), and which—

(i) is wholly owned by a credit institution to which the First Council Directive of 12 December, 1977 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions* applies provided the liabilities of the trustee are guaranteed by the credit institution and the credit institution has paid-up capital of £5 million or its equivalent in a foreign currency, or

*77/780/EEC O.J. No. L322/30 17/12/1977

(ii) is wholly owned by an institution in a non-Member State which is deemed by the Bank to be the equivalent of such a credit institution, provided the liabilities of the trustee are guaranteed by the parent institution and the parent institution has a paid-up capital of £5 million or its equivalent in a foreign currency or

(iii) is wholly owned by an institution or company either in a Member State or in a non-Member State which is deemed by the Bank to be an institution or company which provides unit-holders with protection equivalent to that provided by a trustee under Regulation 19 (2) (a), (b), (c) (i) and (c) (ii) and provided the liabilities of the company acting as trustee are guaranteed by the parent company or institution and the parent company or institution has a paid-up capital of £5 million or its equivalent in a foreign currency.

(3) A trustee shall satisfy the Bank that it has the appropriate expertise and experience to carry out its functions under these Regulations.

20 Obligations of trustee.

20. The trustee must—

( a ) ensure that the sale, issue, repurchase, redemption and cancellation of units effected on behalf of a unit trust or by a management company are carried out in accordance with these Regulations and the trust deed;

( b ) ensure that the value of units is calculated in accordance with these Regulations and the trust deed;

( c ) carry out the instruction of the management company unless they conflict with these Regulations or the trust deed;

( d ) ensure that in transactions involving a unit trust's assets any consideration is remitted to it within the usual time limits;

( e ) ensure that a unit trust's income is applied in accordance with these Regulations and the trust deed;

( f ) enquire into the conduct of the management company in the management of the unit trust in each annual accounting period and report thereon to the unit holders. The trustee's report shall be delivered to the management company in good time to enable it to include a copy of the report in the Annual Report required under Regulation 75. The Report shall state whether in the trustee's opinion the management has managed the unit trust in that period—

(i) in accordance with the limitations imposed on the investment and borrowing powers of the manager and trustee by the trust deed and these Regulations, and

(ii) otherwise in accordance with the provisions of the trust deed and these Regulations, and

if it has not done so, in what respects in which it has not done so and the steps which the trustee has taken in respect thereof.

21 Liability of trustee.

21. The trustee shall be liable to the management company and the unit-holders for any loss suffered by them as a result of its unjustifiable failure to perform its obligations or its improper performance of them. Liability to unit-holders may be invoked either directly or indirectly through the management company, depending on the legal nature of the relationship between the trustee, the management company and the unit-holders.

22 Prohibition on a single company acting as management company and trustee.

22. No single company shall act as both management company and trustee and in the context of their respective roles the management company and the trustee must act independently and solely in the interest of the unit-holders.

PART VIINVESTMENT COMPANIES

Chapter 1 Investment companies with fixed capital

23 Application of Chapter 1.

23. This chapter applies to an investment company with fixed capital authorized under these Regulations.

24 Share capital.

24. Notwithstanding anything contained in section 5 , 6 or 19 of the Companies (Amendment) Act, 1983 , a company to which this chapter applies must have paid up share capital which, in the opinion of the Bank, will be sufficient to enable it to conduct its business effectively and meet its liabilities.

25 Name.

25. A company to which this chapter applies shall include the words "investment company" or "cuideachta infheist�ochta" on all its deeds, announcements, publications, letters and other documents.

26 Issue of redeemable preference shares.

26. (1) Without prejudice to Section 64 of the Companies Act, 1963 and subject to the provisions of this chapter, a company to which this chapter applies may, if so authorized by its articles, issue redeemable preference shares which are liable at the option of the shareholder to be redeemed, and redeem them accordingly.

(2) The issue and redemption of shares by a company pursuant to paragraph (1) shall be subject to the following conditions—

( a ) no redeemable shares shall be redeemed unless they are fully paid;

( b ) no such shares shall be redeemed except out of profits available for distribution or out of the proceeds of a fresh issue of shares made for the purposes of redemption;

( c ) the premium, if any, payable on redemption must have been provided for out of the profits of the company or out of the company's share premium account before the shares are redeemed.

(3) Shares redeemed under this Regulation shall be treated as cancelled on redemption and the amount of the company's issued share capital shall be reduced by the nominal value of those shares accordingly but no such cancellation shall be taken as reducing the amount of the company's authorised share capital.

(4) Where redeemable shares are—

( a ) redeemed wholly out of profits available for distribution, or

( b ) redeemed wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds is less than the aggregate nominal value of the shares redeemed ("the aggreable difference") then a sum equal to, in the case of paragraph (a), the nominal amount of the shares redeemed and, in the case of paragraph (b), the aggreable difference shall be transferred to a reserve fund ("the capital redemption reserve fund") and the provisions of the Companies Acts relating to the reduction of the share capital of a company shall, except as provided in this chapter, apply as if the capital redemption reserve fund were paid-up share capital of the company.

(5) Subject to the provisions of this Regulation and of Regulation 59, the redemption of shares may be effected on such terms and in such manner as may be provided by the articles of the company.

27 Restriction of Companies Acts.

27. The following provisions of the Companies Acts shall, insofar as the redemption of shares is made in accordance with these Regulations, not apply to a company to which this chapter applies—

( a ) the Companies Act, 1963

Section 60 (giving of financial assistance by a company for the purchase of its shares);

Section 69 (notice to registrar of certain alterations in share capital);

( b ) the Companies Act, 1983—

Sections 23 to 25 (Pre-emption rights).

Chapter 2 Investment Companies with Variable capital

28 Application of Chapter 2.

28. This chapter applies to an investment company with variable capital authorized under these Regulations.

29 Share capital.

29. Notwithstanding anything contained in Section 5, 6 or 19 of the Companies Act, 1983 a company to which this chapter applies must have paid up share capital which, in the opinion of the Bank, will be sufficient to enable it to conduct its business effectively and meet its liabilities.

30 Name.

30. A company to which this section applies shall include the words "Investment Company with Variable Capital" or "cuideachta infheist�ochta le caipiteal athraitheach" on all its deeds, announcements, publications, letters and other documents.

31 Enabling provision regarding purchase of own shares.

31. (1) Subject to the provisions of this chapter, a company may, if so authorized by its articles, repurchase its own shares provided that no such shares shall be repurchased unless they are fully paid.

(2) Subject to the provisions of this chapter, the repurchase of shares may be effected on such terms and in such a manner as may be provided by the articles of the company.

32 Repurchase of shares at request of shareholder and treatment of repurchased shares.

32. (1) Subject to the provisions of this Regulation and of Regulation 59, a company shall, if requested to do so by a shareholder, repurchase such of the shareholder's shares as may be requested by the shareholder.

(2) Shares which have been repurchased under Regulation 31 shall be treated as cancelled and the amount of the company's issued share capital shall be reduced accordingly.

33 Legal reserve.

33. For the avoidance of doubt, nothing in the Companies Acts or in these Regulations shall require a company to which this chapter applies to create a legal reserve.

34 Restriction of Companies Acts.

34. (1) The following provisions of the Companies Acts shall not apply to a company to which this chapter applies—

( a ) Companies Act, 1963

Section 60 (giving of financial assistance by a company for the repurchase of its shares);

Section 69 (notice to registrar of certain alterations in share capital);

Section 70 (notice of increase of share capital);

Section 72 (power of company to reduce its share capital).

( b ) Companies (Amendment) Act, 1983

Sections 23 to 25 (pre-emption rights);

Section 40 (Maintenance of capital);

Part IV (Restrictions on distribution of profits and assets).

(2) Section 6 (4) (a) of the Companies Act, 1963 , shall have effect in relation to a company to which this chapter applies as if the words "and the division thereof into shares of a fixed amount" were omitted.

Chapter 3General

35 Modification of Act of 1983.

35. Section 41 (1) of the Companies (Amendment) Act, 1983 (restriction on company acquiring its own shares) shall not apply in relation to the redemption or purchase of shares in pursuance of these Regulations.

36 Modification of Act of 1986.

36. The Companies (Amendment) Act, 1986 shall have effect in relation to a company to which Chapter 1 or 2 applies with the following modifications—

( a ) in paragraph (vi) of section 14, the substitution "acquisition or disposal" for "disposal";

( b ) in section 14, the insertion of the following paragraph after paragraph (vi):

(vii) the reasons for the acquisition, lien or charge, as the case may be"; and

( c ) in the Schedule, the substitution of the following subparagraph for subparagraph (3) of paragraph 39:

"(3) The amounts respectively provided for the purchase of the company's share capital, for redemption of share capital and for redemption of loans".

Chapter 4 Trustee

37 Assets of investment companies.

37. (1) The assets of an investment company shall be entrusted to a trustee for safe-keeping in accordance with these Regulations.

(2) A trustee's liability as referred to in Regulation 43 shall not be affected by the fact that it has entrusted to a third party some or all of the assets in its safekeeping.

38 Trustee.

38. The provisions of Regulation 19 in relation to a trustee of a unit trust shall also be applicable to a trustee in this section.

39 Obligations of trustee.

39. The Trustee must—

( a ) ensure that the sale, issue, repurchase, redemption and cancellation of shares effected by on behalf of a company are carried out in accordance with these Regulations and with the company's memorandum and articles.

( b ) ensure that in transactions involving a company's assets any consideration is remitted to it within the usual time limits.

( c ) ensure that a company's income is applied in accordance with these Regulations and with its memorandum and articles.

( d ) enquire into the conduct of the investment company in each annual accounting period and report thereon to the shareholders. The trustee's report shall be delivered to the investment company in good time to enable it to include a copy of the report in the Annual Report to the shareholders required under Regulation 75. The Report shall state whether in the trustee's opinion the investment company has been managed in that period:

(i) in accordance with the limitations imposed on the investment and borrowing powers of the investment company and trustee by the memorandum and articles and these Regulations, and

(ii) otherwise in accordance with the provisions of the memorandum and articles and these Regulations, and if it has not been so managed, in what respects it has not been so managed and the steps which the trustee has taken in respect thereof.

40 Exemption from requirement to have trustee.

40. (1) Authorized investment companies which market their shares exclusively through one or more stock exchanges on which their shares are admitted to official listing may, at the discretion of the Bank, be exempted from the requirement to have trustees within the meaning of these Regulations.

(2) Regulations 59 to 63 and Regulation 84 shall not apply to such companies. The rules for the valuation of such companies assets must be stated in their articles.

41 Further exemption.

41. (1) The Bank may, at its discretion, exempt authorized investment companies which market at least 80 per cent of their shares through one or more stock exchanges designated in their articles of association from the requirement to have trustees within the meaning of these Regulations provided that their shares are admitted to official listing on the stock exchanges of those Member States within the territories of which the shares are marketed, and provided that any transactions which such a company may effect outside stock exchanges are effected at stock exchange prices only. A company's articles must specify the stock exchange in the country of marketing, the prices on which shall determine the prices at which that company will effect any transactions outside stock exchanges in that country.

(2) In exercising this discretion the Bank must be satisfied that shareholders in the investment companies referred to in paragraph (1) have equivalent protection to that of shareholders of UCITS which have a trustee within the meaning of these Regulations. In particular, such investment companies and the companies referred to in Regulation 40 must;

( a ) state in their articles the methods of calculation of the net asset value of their shares;

( b ) intervene on the market to prevent the stock exchange value of their shares from deviating by more than 5 per cent from their net asset value;

( c ) establish the net asset values of their shares and communicate them to the Bank at least twice a week and publish them at least twice a month.

(3) At least twice a month, an independent auditor, being a person empowered to audit accounts in accordance with the Companies Acts must ensure that the calculation of the value of the shares is effected in accordance with the investment company's articles. On such occasions, the auditor must ensure that the company's assets are invested in accordance with the provisions in these Regulations and in the company's articles.

42 Requirement on Bank to inform EC Commission regarding excemptions.

42. The Bank shall inform the Commission of the identities of the companies benefitting from the exemptions provided for in Regulations 40 and 41.

43 Liability of trustee.

43. The trustee shall be liable to the investment company and the unit-holders for any loss suffered by them as a result of its unjustifiable failure to perform its obligations, or its improper performance of them.

44 Prohibition on a single company acting as mangement company and trustee.

44. (1) No single company shall act as both investment company and trustee.

(2) In carrying out its role as trustee, the trustee must act solely in the interests of the unit-holders.

PART VIIINVESTMENT POLICIES OF UCITS

45 Permitted investments.

45. The investments of a UCITS must consist solely of any one or more of the following:

( a ) transferable securities admitted to official listng on a stock exchange in a Member State;

( b ) transferable securities dealt in on another regulated market in a Member State which operates regularly and is recognised and open to the public;

( c ) transferable securities admitted to official listing on a stock exchange in a non-Member State or dealt in on another regulated market in a non-Member State which operates regularly and is recognised and open to the public provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed or in the investment company's articles;

( d ) recently issued transferable securities, provided—

(i) the terms of issue include an undertaking that application will be made for admission to official listing on a stock exchange or to another regulated market which operates regularly and is recognised and open to the public, provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed or in the investment company's articles;

(ii) such admission is secured within a year of issue.

46 Limitations on investments.

46. (1) A UCITS may invest no more than 10 per cent of its assets in transferable securities other than those referred to in Regulation 45.

(2) ( a ) A UCITS may invest no more than 10 per cent of its assets in debt instruments which, for the purpose of these Regulations, shall be treated, because of their characteristics, as equivalent to transferable securities and which are, inter alia, transferable, liquid and have a value which can be accurately determined at any time or at least with the frequency stipulated in Regulation 84.

( b ) The Bank shall determine the debt instruments which, in accordance with this paragraph, it plans to treat as equivalent to transferable securities and shall, no later than the date on which these Regulations come into operation, send to the Commission a list of such debt instruments, stating the characteristics of the instruments and the reasons for treating them as equivalent to transferable securities.

( c ) The Bank shall also send to the Commission details of any amendments which it proposes making to the lists of instruments referred to above or any further instruments which it proposes treating as equivalent to transferable securities, together with its reasons for so doing.

(3) An investment company may acquire real and personal property which is required for the purpose of its business.

(4) A UCITS may not acquire either precious metals or certificates representing them.

47 Limit of 10 per cent of assets in other investments.

47. The total of the investments referred to in Regulation 46 (a) and (b) may not under any circumstances amount to more than 10 per cent of the assets of a UCITS.

48 Ancillary liquid assets and investment techniques and instruments.

48. UCITS may—

(i) hold ancillary liquid asets.

(ii) employ techniques and instruments relating to transferable securities under the conditions and within the limits laid down by the Bank provided that such techniques and instruments are used for efficient portfolio management.

(iii) employ techniques and instruments intended to provide protection against exchange risks in the context of the management of their assets and liabilities.

49 Investment in one issuer's securities.

49. (1) A UCITS may invest no more than 10 per cent of its assets in transferable securities issued by the same body provided that the total value of the transferable securities held by a UCITS in the issuing bodies in each of which it invests more than 5 per cent of its assets does not exceed 40 per cent of the value of its assets.

(2) Notwithstanding paragraph (1), a UCITS may invest up to 35 per cent of its assets in transferable securities which are issued or guaranteed by a Member State, by its local authorities, by a non-Member State or by public international bodies of which one or more Member States are members.

(3) Notwithstanding pragraph (1) and (2), a UCITS may invest a maximum of 25 per cent in bonds issued by a credit institution which has its registered office in a Member State and is subject by law to special public supervision designed to protect bondholders. Sums deriving from the issue of these bonds must be invested in conformity with the law on assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in the event of failure of the issuer, would be used on a priority basis for the reimbursement of the principal and payment of the accrued interest.

(4) When a UCITS invests more than 5 per cent of its assets in the bonds referred to in paragraph (3) and issued by one issuer, the total value of these investments may not exceed 80 per cent of the value of the assets of the UCITS.

(5) The transferable securities referred to in paragraph (2) and (3) shall not be taken into account for the purpose of applying the limit of 40 per cent referred to in paragraph (1) of these Regulations.

(6) The limits provided for in paragraph (1), (2) and (3) may not be combined.

(7) Investments in transferable securities issued by the same body and carried out in accordance with these Regulations shall under no circumstances exceed in total 35 per cent of the assets of a UCITS.

50 Securities issued or guaranteed by States, local authorities or public international bodies.

50. (1) Provided the Bank is satisfied that unit-holders have protection equivalent to that of unit-holders in UCITS complying with the limits laid down in Regulation 49 it may authorize a UCITS to invest, in accordance with the principle of risk-spreading, up to 100 per cent of its assets in different transferable securities issued or guaranteed by any Member State, its local authorities, non-member State or public international bodies of which one or more Member States are members.

(2) Such a UCITS shall be required to:

( a ) hold securities from at least six different issues, but securities from any one issue may not account for more than 30 per cent of its total assets;

( b ) specify in its trust deed or in its articles the names of the States, local authorities or public international bodies issuing or guaranteeing securities in which it intends to invest more than 35 per cent of its assets;

( c ) include a prominent statement in its prospectus and any promotional literature drawing attention to the Bank's authorization and indicating the States, local authorities and public international bodies in the securities of which it intends to invest or has invested more than 35 per cent of its assets.

51 Investments in other UCITS.

51. (1) A UCITS may not acquire the units of other collective investment undertakings of the open-ended type unless they are collective investment undertakings within the meaning of Regulation 3 (2).

(2) A UCITS may invest no more than 5 per cent of its assets in the units of such collective investment undertakings.

(3) Investment in the units of a unit trust managed by the same management company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding, shall be permitted only in the case of a unit trust which, in accordance with its trust deed, has specialized in investment in a specific geographical area or economic sector, and provided that such investment is authorized by the Bank.

(4) The Bank shall authorize such investment only if the unit trust has announced its intention of making use of that option and that option has been expressly stated in its trust deed.

(5) A management company may not charge any fees or costs on account of transactions relating to a unit trusts's units where some of a unit trust's assets are invested in the units of an other unit trust managed by the same mangement company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding.

52 Acqusition of securities in a linked unit trust or investment company.

52. (1) The provisions of Regulation 51 (3), (4) and (5) shall also apply where an investment company acquires units in another investment company to which it is linked within the meaning of that Regulation.

(2) The provisions of Regulation 51 (3), (4) and (5) shall also apply where an investment company acquires units of a unit trust to which it is linked, or where a unit trust acquires units of an investment company to which it is linked.

53 Acquisition of shares carrying voting rights.

53. An investment company or a mangement company acting in connection with all of the unit trusts which it manages and which fall within the scope of these Regulations may not acquire any shares carrying voting rights which would enable it to exercise significant influence over the management of an issuing body.

54 Limits in relation to non-voting shares, debt securities or units of a UCITS.

54. (1) A UCITS may acquire not more than:

(a) 10 per cent of the non-voting shares of any single issuing body;

(b) 10 per cent of the debt securities of any single issuing body;

(c) 10 per cent of the units of any single UCITS to which Regulation 3 (2) applies.

(2) The limits laid down in paragraph (1) (b) and (c) may be disregarded at the time of acquisition if at that time the gross amount of the debt securities or the net amount of the securities in issue cannot be calculated.

55 Exemptions from Regulations 53 and 54.

55. The provisions of Regulations 53 and 54 shall not apply to—

(a) transferable securities issued or guaranteed by a Member State or its local authorities;

(b) transferable securities issued or guaranteed by a non-Member State;

(c) transferable securities issued by public international bodies of which one or more Member States are members;

(d) shares held by a UCITS in the capital of a company incorporated in a non-member State investing its assets mainly in the securities of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which the UCITS can invest in the securities of issuing bodies of that State. This derogation, however, shall apply only if in its investment policy the company from the non-Member State complies with the limits laid down in Regulations 49, 51, 52, 53, 54, 56, 57 and 58. Where the limits set down in Regulations 49, 51 and 52 are exceeded, Regulations 56, 57 and 58 shall apply with necessary modifications.

(e) shares held by an investment company in the capital of subsidiary companies carrying on the business of management, advice or marketing exclusively on its behalf.

56 Subscription rights.

56. UCITS need not comply with the limits laid down in this Part when exercising subscription rights attaching to transferrable securities which form part of their assets.

57 Derogations for recently authorized UCITS.

57. The Bank may allow recently authorized UCITS to derogate from Regulations 49 and 50 for six months following the date of their authorization, provided they observe the principle of risk-spreading.

58 Breaches of limits.

58. If the limits in this Part are exceeded for reasons beyond the control of a UCITS or as a result of the exercise of subscription rights, the UCITS must adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interests of its unit-holers.

PART VIIIGENERAL PROVISIONS RELATING TO UCITS

59 Obligation on UCITS to redeem or repurchase units.

59. Subject to Regulation 63 (1), (2) and (3), a UCITS must redeem or repurchase units at the request of the unit-holder.

60 Issue of units.

60. (1) The units shall be issued or sold at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be increased by duties and charges.

(2) Units may not be issued unless the equivalent of the net issue price is paid into the assets of the UCITS within the usual time limits. This shall not preclude the distribution of bonus units.

61 Redemption or repurchase of units.

61. Units shall be redeemed or repurchased at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be decreased by duties and charges.

62 Value of assets.

62. (1) In the case of a unit trust and unless otherwise stated in an investment company's articles, the value of the assets of a UCITS shall be based in the case of officially quoted securities, on the last known stock exchange quotation unless such quotation is not representative. For securities not so quoted, and for securities which are so quoted but for which the latest quotation is not representative, the value shall be based on the probable realisation value which must be estimated with care and in good faith.

(2) The assets of a UCITS may only be purchased and sold at prices which are in conformity with the criteria set out in paragraph (1).

(3) The trust deed or the articles shall determine the frequency of the calculation of the issue and repurchase price.

63 Suspension of repurchase or redemption of units.

63. (1) Notwithstanding Regulation 59, a UCITS may in the cases and according to the procedure provided in its trust deed or articles temporarily suspend the repurchase or redemption of its units. Suspension may be provided for only in exceptional cases where circumstances so require, and suspension is justified having regard to the interest of the unit-holders.

(2) The Bank may require the suspension of the repurchase or redemption of units in the interests of the unit-holder or the public.

(3) A UCITS which acts in accordance with paragraph (1) must without delay communicate its decision to the Bank and to the competent authorities in the Member States in which it markets its units.

64 Creation and cancellation of units of a unit trust.

64. (1) The trustee of a unit trust shall create or cancel units in accordance with the conditions laid down in the trust deed and on receipt of a written instruction from the management company. The trustee may refuse to create or cancel some or all of such units if he is of the opinion that it is not in the interests of participants for such units to be created or cancelled, as the case may be.

(2) The trustee shall not create or cancel units during any period in which redemption of units is suspended.

65 Issue of registered certificates or bearer securities.

65. (1) The management company or the investment company or the trustee shall issue registered certificates or bearer securities, representing one or more portions of the UCITS which it manages, or alternatively, in accordance with the provisions of the trust dead or articles, written confirmations of entry in the register of units or fractions of units without limitation as to the splitting up of units.

(2) Rights attaching to fractions of units are exercised in proportion to the fraction of a unit held except for possible voting rights which can only be exercised by whole units.

(3) The certificates and bearer securities shall be signed by the management company or the investment company and by the trustee.

(4) Such signatures may be reproduced mechanically.

66 Replacement of management company and trustee.

66. (1) In relation to unit trusts, the trust deed shall lay down the conditions for the replacement of the management company and the trustee and rules to ensure the protection of unit-holders in the event of such replacement.

(2) In relation to investment companies, the articles shall lay down the conditions for the replacement of the trustee and rules to ensure the protection of share-holders in the event of such replacement.

67 Remuneration and expenditure.

67. (1) The trust deed shall prescribe the remuneration and the expenditure which the management company is empowered to charge to a unit trust and the method of calculation of such remuneration.

(2) The articles shall prescribe the nature of the cost to be borne by the company.

68 Application of income.

68. The trust deed or the articles shall lay down the conditions and manner of application of income.

69 Borrowing.

69. (1) Subject to paragraphs (2) and (3) neither—

(a) an investment company, nor

(b) a management company or a trustee acting on behalf of a unit trust

may borrow money.

(2) A UCITS may acquire foreign currency by means of a "back-to-back" loan.

(3) A UCITS may borrow—

(a) up to 10 per cent of its assets, in the case of an investment company, or 10 per cent of the value of the fund, in the case of a unit trust, provided that such borrowing is on a temporary basis; and

(b) up to 10 per cent of its assets, in the case of an investment company, provided that the borrowing is to make possible the acquisition of real property required for the purpose of its business; in this case, the borrowing and that referred to in paragraph (a) may not in total exceed 15 per cent of the borrower's assets.

70 Loans or guarantees.

70. (1) Without prejudice to Regulations 45, 46, 47 and 48 neither—

(a) an investment company, nor

(b) a management company or trustee acting on behalf of a unit trust,

may grant loans or act as a guarantor on behalf of third parties.

(2) Paragraph (1) shall not prevent such undertakings from acquiring transferable securities which are not fully paid.

71 Sales of securities

71. Neither—

(a) an investment company, nor

(b) a management company or trustee acting on behalf of a unit trust

may carry out sales of transferable securities when such securities are not in the ownership of the investment company or the unit trust respectively.

PART IXPROSPECTUS, REPORTS AND PUBLICATION OF OTHER INFORMATION

72 Publication of prospectus.

72. (1) An investment company and, for each of the trusts it manages, a management company must publish a prospectus, which must be dated and the essential elements of which must be kept up to date.

(2) A prospectus issued by a management company or investment company shall include the information necessary for investors to be able to make an informed judgement of the investment proposed to them and shall contain at least the information provided for in Annex A to these Regulations, insofar as that information does not already appear in the documents annexed to the prospectus in accordance with Regulation 73.

(3) The Companies Acts shall not apply in relation to a prospectus published by an investment company.

(4) In the case of umbrella funds, the prospectus shall clearly state the charges applicable to switching of investments from one sub-fund to another.

73 Annexation of trust deed or articles to prospectus

73. The trust deed or the articles shall form an integral part of the prospectus and must be annexed thereto unless the unit-holder is informed in the prospectus that on request he will be sent the trust deed or articles or be appraised of the place where, in each Member State in which the units or shares are placed on the market, he may consult them.

74 Offering of prospectus to investors before contract concluded and transmission of prospectus to Bank.

74. (1) The prospectus must be offered to investors free of charge before the conclusion of a contract.

(2) A UCITS must send its prospectus and any amendments thereto to the Bank.

75 Publication of annual and half-yearly reports.

75. An investment company and, for each of the trusts it manages, a management company must publish an annual report for each financial year and a half-yearly report covering the first six months of the financial year.

76 Time limits.

76. The annual and half-yearly reports must be published within the following time limits, with effect from the the ends of the periods to which they relate:

(a) four months in the case of the annual report,

(b) two months in the case of the half-yearly report.

77 Contents of annual report.

77. The annual report must include a balance-sheet or a statement of assets and liabilities,a detailed income and expenditure account for the financial year, a report on the activities of the financial year and the other information provided for in Annex B to these Regulations, as well as any significant information which will enable investors to make an informed judgement on the development of the activities of the UCITS and its results.

78 Contents of half-yearly report

78. The half-yearly report must include at least the information provided for in Chapters I to IV of Annex B to these Regulations. Where a UCITS has paid or proposes to pay an interim dividend, the figures must indicate the results after tax for the half-year concerned and the interim dividend paid or proposed.

79 Transmission of reports to Bank.

79. The annual and half-yearly reports and any other reports requested by the Bank, must be sent to the Bank by the UCITS.

80 Offering of reports to investors before contract concluded.

80. The latest annual report and any subsequent half-yearly report published must be offered to investors free of charge before the conclusion of a contract.

81 Availability to public of reports.

81. The annual and half-yearly reports must be available to the public at the places specified in the prospectus.

82 Supply of reports to unit-holders.

82. The annual and half-yearly reports shall be supplied to unit-holders free of charge on request.

83 Auditing requirements in relation to annual report.

83. (1) The accounting information given in the annual report must be audited by one or more persons empowered in to audit accounts in accordance with the Companies Acts. The auditor's report, including any qualifications, shall be reproduced in full in the annual report.

(2) If the auditor of a UCITS which has been authorized by the Bank—

(a) has reason to believe that the information provided to investors or to the Bank in the reports or other documents of the UCITS does not truly describe the financial situation and the assets and liabilities of the UCITS, or

(b) has reason to believe that the assets of the UCITS are not or have not been invested in accordance with these Regulations or the prospectus or the trust deed or the articles, or

(c) has reason to believe that there exist circumstances which are likely to affect materially the ability of the UCITS to fulfil its obligations to unit-holders or meet any of its financial obligations under these Regulations, or

(d) has reason to believe that there are material defects in the financial systems and controls or accounting records of the UCITS, or

(e) has reason to believe that there are material inaccuracies in or omissions from any returns of a financial nature made by the UCITS to the Bank, or

(f) proposes to qualify any certificate which he is to provide in relation to financial statements or returns of the UCITS under the Companies Acts or these Regulations,

he shall report the matter to the Bank in writing without delay.

(3) The auditor of an authorized UCITS shall, if requested by the Bank, furnish to the Bank a report stating whether in his opinion and to the best of his knowledge the UCITS has or has not complied with a specified obligation of a financial nature under these Regulations.

(4) Where the auditor of an authorized UCITS so requests, the Bank shall provide to the auditor in writing details of such returns of a financial nature to the Bank by the UCITS as the auditor requests for the purpose of enabling him to exercise his functions under these Regulations.

(5) The auditor of an authorized UCITS shall send to the UCITS a copy of any report made by him to the Bank under paragraph (2) and (3).

(6) (a) Whenever the bank is of the opinion that the exercise of its functions under these Regulations or the protection of the interests of unit-holders or shareholders so requires, it may require the auditor of an authorized UCITS to supply it with such information as it may specify in relation to the audit of the business of the UCITS and the auditor shall comply with the requirement.

(b) The Bank may require that, in supplying information for the purposes of this paragraph, the auditor shall act independently of the authorized UCITS.

(7) No duty to which the auditor to an authorized UCITS may be subject shall be regarded as contravened, and no liability to the UCITS, or its unit-holders, creditors or other interested parties, shall attach to the auditor, by reason of his compliance with any obligation imposed on him by or under these Regulations.

84 Publication of issue and redemption prices.

84. A UCITS must make public in an appropriate manner the issue, sale, repurchase or redemption price of its units each time it issues, sells, repurchases or redeems them, and at least twice a month. The Bank may, however, permit a UCITS to reduce the frequency to once a month on condition that such a derogation does not prejudice the interests of the unit-holders.

85 Publicity.

85. All publicity comprising an invitation to purchase the units of a UCITS must indicate that a prospectus exists and the places where it may be obtained by the public.

PART XSPECIAL PROVISIONS APPLICABLE TO UCITS MARKETING IN A MEMBER STATE OTHER THAN THAT IN WHICH IT IS SITUATED

86 Prior requirements.

86. (1) Where a UCITS situated in the State proposes to market its units in another Member State or a UCITS situated in another Member State proposes to market its units in the State it shall, prior to commencement of marketing, send written notification of its intention to the Bank.

(2) A UCITS situated in another Member State shall send to the Bank, together with the notification under paragraph (1)—

(a) an attestation by the competent authority of the Member State in which it is situated to the effect that if fulfils the conditions imposed by the Directive,

(b) its fund rules, in the case of a unit trust, and its memorandum and articles in the case of an investment company,

(c) its prospectus including any amendments thereto,

(d) where appropriate its latest Annual Report and any subsequent half yearly report,

(e) details of the arrangements made for the marketing of its units in the State.

87 Entitlement to market in the State.

87. The UCITS may commence marketing its units in the State at the expiry of two months after the requirements of Regulation 86 have been complied with unless the Bank establishes, in a reasoned decision taken before the expiry of that period of two months, that the arrangements made for the marketing of units do not comply with the provisions of Regulations 88 and 90.

88 Compliance with law, regulations and administrative provisions.

88. A UCITS which markets its units in the State must comply with the law, regulations and administrative provisions in force which do not fall within the field governed by the Directive.

89 Advertising.

89. A UCITS which advertises its units in the State as part of its marketing activities within the State shall comply with any statutory provisions governing such advertising.

90 Provision of facilities in relation to unit-holders.

90. A UCITS which markets its units in the State must satisfy the Bank that adequate measures have been taken to ensure that facilities are available in the State for making payments to unit holders, repurchasing or redeeming units and making available the information which UCITS are obliged to provide.

91 Distribution of documents and other information.

91. A UCITS which markets its units in the State must distribute within the State, in at least one of the State's official languages, the documents and information required to be published under these Regulations and in accordance with the same procedure as provided for under these Regulations.

92 Power of Bank to prohibit marketing.

92. The Bank may prohibit the marketing of the units of such a UCITS in the State if it fails to comply with the provisions of this Part. Any decision taken by the Bank in this regard shall be notified to the UCITS concerned and to the competent authorities of the Member State in which the UCITS is situated.

93 Generic names.

93. For the purpose of carrying on its activities, a UCITS may use the same generic name (such as investment company or unit trust) in the Community as it uses in the Member State in which it is situated. In the event of any danger of confusion, the host Member State may, for the purpose of clarification, require that the name by accompanied by certain explanatory particulars.

PART XISPECIAL PROVISIONS IN RELATION TO THE CENTRAL BANK OF IRELAND

94 Collaboration with competent authorities in other Member States.

94. The Bank shall collaborate closely with the competent authorities in other Member States in order to carry out its authorization and supervision duties under these Regulations and shall for those purposes alone communicate to the competent authorities in other Member States all information required by them.

95 Professional secrecy.

95. All persons employed or formerly employed by the Bank shall be bound by professional secrecy.

96 Application of professional secrecy to information exchanged with other competent authorities

96. Regulation 95 shall not preclude communications between the authorities of the various Member States as provided for in the Directive but information exchanged with the competent authorities in other Member States shall be covered by the obligation of professional secrecy on employees or former employees of the Bank.

97 Restriction on use of information received from other Member States.

97. Without prejudice to cases covered by criminal law, the Bank may use information obtained from another Member States only for the performance of its duties or in connection with legal proceedings relating to such performance.

PART XIIINSPECTION AND ENFORCEMENT POWERS OF CENTRAL BANK

98 Compliance with additional requirements imposed by Bank.

98. Every management company, investment company or trustee to which these Regulations apply shall comply with such additional supervisory and reporting requirements or conditions relating to its business as the Bank considers prudent to impose on it from time to time for the purposes and in the interest of the proper and orderly regulation of UCITS in accordance with these Regulations.

99 Keeping of books and records.

99. (1) Every management company, investment company or trustee of a UCITS shall keep at an office or offices within the State such books and records (including accounts) as may be specified from time to time by the Bank in the due discharge by the Bank of its statutory functions and shall notify the Bank of the address of every office at which any such book or record is kept for the purposes of this Regulation.

(2) Different books and records may be specified by the Bank for the purposes of this Regulation in relation to different UCITS.

(3) ( a ) An appropriate person duly authorized in writing in that behalf by the Governor of the Bank (in this paragraph referred to as "an authorized person") may, for the purpose of the performance by the Bank of its statutory functions and upon production of his authorization, at all reasonable times, inspect and take copies of or extracts from, and make such enquiries as he may consider necessary in relation to—

(i) the books and records kept pursuant to this Regulation by the management company, investment company or trustee of an authorized UCITS, and

(ii) any books of account relating to the said management company, investment company or trustee and kept under the Companies Acts and

(iii) any other documents relating to the business of the UCITS

and for those purposes enter any office to which paragraph (1) relates and any other place where he reasonably believes any books, records or other documents as aforesaid are kept.

( b ) A person who has in his power, possession or procurement any books, records or other documents aforesaid shall—

(i) produce them at the request of an authorized person and permit him to inspect and take copies of or extracts from them,

(ii) at the request of an authorized person, give any information which may be reasonably required with regard to them, and

(iii) give such other assistance and information to an authorized person as is reasonable in the circumstances.

( c ) the provisions of paragraphs (a) and (b) shall apply to every management company, investment company and trustee of a UCITS and the provisions of those paragraphs, other than subparagraph (i) of paragraph (a), shall apply to—

(i) every associated enterprise of the management company, investment company and trustee, and

(ii) any other person,

where an inspection of the accounts or other records is, in the opinion of the Bank, materially relevant to the proper appraisal of the business of a UCITS during any period in respect of which an inspection or proposed inspection of the management company, investment company or trustee relates.

(4) Books and records kept pursuant to this Regulation shall—

( a ) be in addition to any books or other records to be kept by or under any other enactment, and

( b ) be retained for at least such period as the Bank may specify in respect of any such book or record.

(5) ( a ) In this Regulation—

"appropriate person" means

(i) an officer of the Bank, or

(ii) in relation to any particular inspection (including a proposed inspection), any other person who in the opinion of the Governor of the Bank possesses appropriate qualifications or experience to carry out the inspection, or any part thereof, to which this Regulation relates;

"associated enterprise" means, as appropriate—

(i) a holding company of the mangement company or investment company or trustee,

(ii) a subsidiary company of the management company or investment company or trustee,

(iii) a company which is a subsidiary of a body corporate, where the management company or investment company or trustee concerned is also a subsidiary of the body corporate, but neither company is a subsidiary of the other,

(iv) in the case of a management company or investment company or a trustee of a UCITS, any other body corporate that is not a subsidiary of the management company or investment company or trustee but in respect of which the company is beneficially entitled to more than 20 per cent in nominal value of either the allotted share capital or of the shares carrying voting rights (other than voting rights which arise only in specified circumstances) in that other body corporate,

(v) a partnership in which the management company or investment company or trustee has an interest, and whose business is or, at the relevant time, was, in the opinion of the Bank, materially relevant to any inspection of the management company or investment company or trustee being carried out or proposed to be carried out under this section;

"holding company" has the meaning given to it by section 155 of the Companies Act, 1963 ;

"statutory functions", means functions under these Regulations;

"subsidiary company" has the meaning given to it by section 155 of the Companies Act, 1963 .

( b ) References in this Regulation to books, records or other documents, or to any of them, shall be construed as including any document or information kept in a non-legible form (by the use of electronics or otherwise) which is capable of being reproduced in a legible form and all the electronic or other automatic means, if any, by which such document or information is so capable of being reproduced to which the person, whose books, records or other such documents are inspected for the purposes of this Regulation, has access.

100 Furnishing of information to Bank

100. (1) A management company, an investment company and a trustee shall each furnish the Bank—

( a ) at such times as the Bank may specify from time to time, such information and returns concerning the business to which the authorization relates or the carrying on of a business as aforesaid by such person, as the case may be, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions;

( b ) within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (a) of this Regulation) concerning the business to which the authorization relates or the carrying on of a business as aforesaid by such person, as the case my be, that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions.

(2) A person shall not furnish information or returns under this Regulation which he knows to be false.

(3) Paragraphs (1) and (2) shall apply to the business of an associated enterprise to the extent only that the information and returns sought by the Bank are, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the holder of the authorization to which the associated enterprise relates.

101 Application by Bank to High Court

101. (1) Where, on an application made in a summary manner by the Bank, the Court is of the opinion that there has occurred or is occurring a failure by an authorized UCITS to comply with a requirement or condition imposed by virtue of these Regulations the Court may, by order, prohibit the continuance of the failure by the UCITS concerned.

(2) The Court when considering the matter may make such interim or interlocutory order as it considers appropriate.

(3) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of the proceedings under this Regulation may be heard otherwise than in public.

(4) In this Regulation "the Court" means the High Court.

102 Revocation of authorization.

102. (1) The Bank may revoke the authorization of a UCITS if it appears to the Bank—

( a ) that any of the requirements for the authorization of the UCITS are no longer satisfied;

( b ) that it is undesirable in the interests of the unit-holders or potential unit-holders that the UCITS should continue to be authorized; or

( c ) without prejudice to subparagraph (b), that the management company or investment company or trustee of the UCITS has contravened any provision of these Regulations or, in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under these Regulations.

(2) For the purposes of paragraph (1) (b) the Bank may take into account any matter relating to the UCITS, the management company, investment company or trustee, a director or controller of the management company, investment company or trustee or any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.

(3) The Bank may revoke the authorization of a UCITS at the request of the management company or investment company or trustee of the UCITS; but it may refuse to do so if it considers that any matter concerning the UCITS should be investigated as a preliminary to a decision on the question of whether the authorization should be revoked or that revocation would not be in the interests of the unit-holders.

(4) The Bank shall, within twenty one days of the revocation of an authorization, publish notice of the revocation in Iris Oifigi�il and in at least one national daily newspaper.

103 Notice of intention to revoke.

103. (1) Where the Bank proposes to revoke the authorization of a UCITS otherwise than at the request of the management company, investment company or trustee of the UCITS, it shall give the applicants or, as the case may be, the management company, investment company or trustee of the UCITS written notice of its intention to do so, stating the reasons for which it proposes to act and giving particulars of the rights conferred by paragraph (2).

(2) A management company, investment company or trustee on whom a notice is served under paragraph (1) may, within thirty days of the date of service, make written representations to the Bank.

(3) The Bank shall have regard to any representations made in accordance with paragraph (2) in determining whether to refuse the application or revoke the authorization, as the case may be.

104 Bank's powers of intervention.

104. (1) If it appears to the Bank

( a ) that any of the requirements for authorizing a UCITS are no longer satisfied;

( b ) that the exercise of the power conferred by this Regulation is desirable in the interests of unit-holders or potential unit-holders in a UCITS or

( c ) without prejudice to subparagraph (b), that the management company or investment company or trustee of such a UCITS has contravened any provision of these Regulations or, in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under these Regulations,

it may give a direction under paragraph (2).

(2) A direction under this paragraph may—

( a ) require the management company or the investment company to cease the issue or redemption, or both the issue and redemption, of units under the UCITS on a date specified in the direction until such further date as is specified in that or another direction;

( b ) require the management company or the investment company and the trustee of the UCITS to wind it up by such date as is specified in the direction or, if no date is specified, as soon as practicable.

(3) The revocation of the authorization of a UCITS shall not affect the operation of any direction under paragraph (2) which is then in force; and a direction may be given under that paragraph in relation to a UCITS whose authorization has been revoked if a direction under that paragraph was already in force at the time of revocation.

(4) For the purposes of paragraph (1) (b) the Bank may take into account any matter relating to the UCITS, the management company, investment company or trustee, a director or controller of the management company, investment company or trustee or any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.

(5) The Bank may, either of its own motion or on the application of the management company, investment company or trustee of the UCITS concerned, withdraw or vary a direction given under this Regulation if it appears to the Bank that is no longer necessary for the direction to take effect or continue in force or, as the case may be, that it should take effect or continue in force in a different form.

105 Review of Bank's decision, etc., by the High Court.

105. (1) Where the Bank refuses an application for authorization, fails to take a decision on an application within the time prescribed by Regulation 14 (2), or revokes or refuses to revoke an authorization under these Regulations the applicant or the management company, the investment company or the trustee, as the case may be, may apply to the High Court in a summary manner to have the matter reviewed.

(2) Whenever an application to review a decision of the Bank is brought to the High Court pursuant to paragraph (1) the High Court shall confirm the decision of the Bank unless it is satisfied that the procedures laid down by, or the requirements of these Regulations or the directive have not been complied with in any material respect.

(3) In any case where the High Court is satisfied that the procedures laid down by, or the requirements of, these Regulations or the Directive have not been complied with in any material respect, the High Court may set aside the decision of the Bank or, if the Bank has failed to take a decision within the time prescribed in Regulation 14 (2), direct it to take a decision within such time as the Court directs, and in any such case, remit the matter to the Bank which shall thereupon reconsider the matter and make a decision in accordance with such procedures and requirements.

PART XIIIOFFENCES

106 Penalties.

106. (1) An investment company, management company or trustee which contravenes any provision of these Regulations shall be guilty of an offence.

(2) An auditor who contravenes any provision of these Regulations shall be guilty of an offence.

(3) ( a ) A person guilty of an offence under paragraph (1) or (2) shall be liable on summary conviction to a fine not exceeding £1,000 or, at the discretion of the court in the case of an individual, to imprisonment for a term not exceeding 12 months or to both.

( b ) If the contravention in respect of which a person was convicted under such paragraph (a) is continued after the conviction that person shall be guilty of a further offence on every day on which the contravention continues and for each such offence the person shall be liable on summary conviction to a fine not exceeding £250 instead of the penalty specified for the original contravention.

(4) Summary proceedings in relation to an offence under these Regulations may be brought and prosecuted by the Director of Public Prosecutions or the Bank.

(5) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act, 1851, summary proceedings for an offence under these Regulations may be instituted within 3 years from the date of the offence.

(6) Where an offence under these Regulations committed by a body corporate or by a person purporting to act on behalf of a body corporate is proved to have been so committed with the consent, or connivance of, or to be attributable to, or to have been facilitated by, any neglect on the part of any officer or employee of that body, that person shall also be guilty of an offence.

(7) In this Regulation, a reference to a contravention includes a reference to a failure to comply.

PART XIVTRANSITIONAL PROVISION

107 Existing UCITS.

107. UCITS existing on the date of commencement of these Regulations shall have a period of 12 months from that date in which to comply with the Regulations.

Annex A

1. Information concerning the unit trust

1. Information concerning the management company

1. Information concerning the investment company

1.1 Name

1.1 Name or style, form in law, registered office and head office if different from the registered office.

1.1 Name or style, form in law, registered office and head office if different from the registered office.

1.2. Date of establishment of the unit trust. Indication of duration, if limited.

1.2. Date of incorporation of the company. Indication of duration if limited.

1.2 Date of incorporation of the company. Indication of duration, if limited.

1.3 If the company manages other unit trusts, indication of those other trusts.

1.4. Statement of the place where the trust deed, if it is not annexed, and periodic reports may be obtained.

1.4. Statement of the place where the articles of association, if they are not annexed, and periodic reports may be obtained.

1.5. Brief indications relevant to unit-holders of the tax system applicable to the unit trust. Details of whether deductions are made at source from the income and capital gains paid by the trust to unit-holders.

1.5. Brief indications relevant to unit-holders of the tax system applicable to company. Details of whether deductions are made at source from the income and capital gains paid by the company to unit holders.

1.6. Accounting and distribution dates.

1.6. Accounting and distribution dates.

1.7. Names of the persons responsible for auditing the accounting information referred to in Regulation 83 (1).

1.7. Names of the persons responsible for auditing the accounting information referred to in Regulation 83 (1).

1.8. Names and positions in the company of the members of the administrative, management and supervisory bodies. Details of their main activities outside the company where these are of significance with respect to that company.

1.8. Names and positions in the company of the members of the administrative, management and supervisory bodies. Details of their main activities outside the company where these are of significance with respect to that company.

1.9. Amount of the subscribed capital with an indication of the capital paid-up.

1.9. Capital.

1.10. Details of the types and main characteristics of the units and in particular:

1.10. Details of the types and main characteristics of the units and in particular:

— the nature of the right (real, personal or other) represented by the unit,

— original securities or certificates providing evidence of title; entry in a register or in an account,

— characteristics of the units: registered or bearer. Indication of any denominations which may be provided for,

— indication of unit-holders' voting rights if these exist,

— circumstances in which winding-up of the unit trust can be decided on and winding-up procedure, in particular as regards the rights of unit-holders.

— original securities or certificates providing evidence of the; entry in a register or in an account,

— characteristics of the units; registered or bearer. Indication of any denominations which may be provided for,

— indication of unit-holders' voting rights,

— circumstances in which winding-up of the investment company can be decided on and winding-up procedure, in particular as regards the rights of unit-holders.

1.11. Where applicable, indication of stock exchanges or markets where the units are listed or dealt in.

1.11. Where applicable, indication of stock exchanges or markets where the units are listed or dealt in.

1.12. Procedures and conditions of issue and sale of units.

1.12. Procedures and conditions of issue and sale of units.

1.13. Procedures and conditions for repurchase or redemption of units, and circumstances in which repurchase or redemption may be suspended.

1.13. Procedures and conditions for purchase of units, and circumstances in which purchase may be suspended.

1.14. Description of rules for determining and applying income.

1.14. Description of rules for determining and applying income.

1.15. Description of the unit trust's investment objectives, including its financial objectives (e.g. capital growth or income), investment policy (e.g. specialization in geographical or industrial sectors), any limitations on that investment policy and an indication of any techniques and instruments or borrowing powers which may be used in the managment of the unit trust.

1.15. Description of the company's investment objectives, including its financial objectives (e.g. capital growth or income), investment policy (e.g. specialization in geographical or industrial sectors), any limitations on that investment policy and an indication of any techniques and instruments or borrowing powers which may be used in the management of the company.

1.16. Rules for the valuation of assets.

1.16. Rules for the

valuation of asets.

1.17. Determination of the sale or issue price and the repurchase or redemption price of units, in particular:

1.17. Determination of

the sale or issue price

and the purchase price

of units, in particular:

— the method and frequency of the calculation of those prices,

— information concerning the charges relating to the sale or issue and the repurchase or redemption of units,

— the means, places and frequency of the publication of those prices.

— the method and frequency of the calculation of those prices,

— information concerning the charges relating to the sale or issue and the purchase of units,

— the means, places and frequency of the publication of the prices(1).

1.18. Information concerning the manner, amount and calculation of remuneration payable by the unit trust to the management company, the trustee or third parties, and reimbursement of costs by the unit trust to the management company, to the trustee or to third parties.

1.18. Information concerning the manner, amount and calculation of remuneration paid by the company to its directors, and members of the administrative, management and supervisory bodies, to the trustee, or to third parties, and reimbursement of costs by the company to its directors, to the trustee or to third parties.

(1)Investment companies within the meaning of Regulation 41 (1) of these Regulations shall also indicate:

— the method and frequency of calculation of the net asset value of units,

— the means, place and frequency of the publication of the value,

— the stock exchange in the country of marketing the price on which determines the price of transactions effected outside stock exchanges in that country.

2. Information concerning the trustee:

2.1. Name or style, form in law, registered office and head office if different from the registered office;

2.2 Main activity.

3. Information concerning the advisory firms or external investment advisers who give advice under contract which is paid for out of the assets of the UCITS:

3.1. Name or style of the firm or name of the adviser;

3.2. Material provisions of the contract with the management company or the investment company which may be relevant to the unit-holders, excluding those relating to remuneration;

3.3. Other significant activities.

4. Information concerning the arrangements for making paymens to unit-holders, purchasing or redeeming units and making available information concerning the UCITS. Such information must in any case be given in the Member State in which the UCITS is situated. In addition, where units are marketed in another Member State, such information shall be given in respect of that Member State in the prospectus published there.

_______________________________________________________________________

ANNEX B

Information to be included in the periodic reports

I. Statement of assets and liabilities

—transferable securities,

—debt instruments of the type referred to in Regulation 46 (2) (a),

—bank balances,

—other assets,

—total assets,

—liabilities,

—net asset value.

II. Number of units in circulation

III. Net asset value per unit

IV. Portfolio, distinguishing between:

(a) transferable securities admitted to official stock exchange listing;

(b) transferable securities dealt in on another regulated market;

(c) recently issued transferable securities of the type referred to in Regulation 45 (d);

(d) other transferable securities of the type referred to in Regulation 46 (1);

(e) debt instruments treated as equivalent in accordance with Regulation 46 (2) (a);

and analysed in accordance with the most appropriate criteria in the light of the investment policy of the UCITS (e.g. in accordance with economic, geographical or currency criteria) as a percentage of net assets; for each of the above investments the proportion it represents of the total assets of the UCITS should be stated.

Statement of changes in the composition of the portfolio during the reference period.

V. Statement of the developments concerning the assets of the UCITS during the reference period including the following:

—income from investments,

—other income,

—management charges,

—trustee's charges,

—other charges and taxes,

—net income,

—distributions and income reinvested,

—changes in capital account,

—appreciation or depreciation of investments,

—any other changes affecting the assets and liabilities of the UCITS.

VI. a comparative table covering the last three financial years and including, for each financial year, at the end of the financial year:

—the total net asset value,

—the net asset value per unit.

VII. Details, by category of transaction within the meaning of Regulation 48 (ii) and (iii) carried out by the UCITS during the reference period, of the resulting amount of commitments.

ANNEX C

Categories of Undertakings for Collective Investment in Transferable Securities excluded by virtue of their investment and borrowing policies.

(a) Undertakings the investment policy of which provides for the placement of 25 per cent (twenty-five per cent) or more of their net assets in high risk capital (venture capital funds).

(b) Undertakings the investment policy of which provides the investment of 20 per cent (twenty per cent) or more of the net assets (other than liquidities) in assets other than securities as described in Regulations 45 of these Regulations.

(c) Undertakings the investment policy of which provides for borrowing on a permanent basis and for investment at least 25 per cent (twenty-five per cent) of the net assets (leveraged funds).

(d) Undertakings the investment policy of which provides for investment in other collective investment undertakings of the open ended type of at least 25 per cent (twenty-five per cent) of the net assets (fund of funds).

(e) Undertakings the investment policy of which provides for the placement of 50 per cent (fifty per cent) or more of their assets in monetary market instruments and in liquidities other than securities as described in Regulation 45 of these Regulations (money market funds).

(f) Umbrella type undertakings of which one sub-fund does not fall within these Regulations by reason of its investment or borrowing policy.

GIVEN under my Official Seal, this 18th day of April, 1989

RAY BURKE

Minister for Industry and

Commerce

EXPLANATORY NOTE

The purpose of these Regulations is to give legal effect to a Council Directive (No. 85/611/EEC) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS). The Regulations apply to UCITS whose sole object is the collective investment in transferable securities of capital raised from the public, which operate on the principle of risk spreading and whose units are redeemable at the request of the unitholder (open-ended UCITS). Under the Regulations, UCITS may be constituted either as unit trusts, investment companies with fixed capital or investment companies with variable capital.

UCITS subject to the Regulations are prohibited from carrying on activities within the State unless they have been authorised by a competent authority in a Member State. The Central Bank is appointed as a competent authority in respect of UCITS situated in the State. The Regulations are divided into 14 Parts.

Part I provides that the Regulations come into operation on 1 June, 1989.

Part II defines the UCITS subject to the Regulations and provides that the provisions of the Unit Trusts Act, 1972 shall not apply to these UCITS.

Part III provides for the appointment of the Central Bank of Ireland as a competent authority and also provides for the publication of the names of UCITS authorised under the Regulations.

Part IV sets out the general requirements relating to authorization by the Central Bank of UCITS situated in the State and provides for a right of appeal to the High Court when authorization is refused.

Part V requires that the assets of a Unit Trust shall be entrusted to a trustee for safe-keeping and sets out the general requirements for, and obligations and liability of, the trustee as well as the requirements in relation to the management company.

Part VI provides for the operation of UCITS in the form of investment companies. Chapter 1 of that part provides for investment companies with fixed capital. Chapter 2 of that part provides for investment companies with variable captial. Chapter 3 provides for amendments in the Companies Acts in relation to UCITS authorised under the Regulations.

Chapter 4 requires that the assets of an investment company shall be entrusted to a trustee for safe-keeping and sets out the requirements for, and obligations and liability of, the trustee. The Central Bank has discretion to exempt investment companies which market 80 per cent or more of their shares through one or more Stock Exchanges from the requirement to have a trustee.

Part VII prescribes the categories of investment in which UCITS subject to the Regulations may invest.

Part VIII obliges UCITS to redeem or repurchase units at the request of the unit holder and makes provision for the valuation of assets and the calculation of the issue and repurchase prices of units. It provides for the suspension of redemption or repurchase of units in certain circumstances. UCITS are required to issue registered certificates or bearer securities or alternatively written confirmation of entry in a register. Provision is made in relation to the remuneration of the manager and for the replacement of manager and trustee in exceptional circumstances. UCITS are prohibited from borrowing with certain exceptions and are prohibited from granting loans.

Part IX requires that prospectuses must be published and prescribes minimum information requirements. It also prescribes the material to be contained in the annual and half-yearly reports which must be published within time limits and supplied to unit holders free of charge. The auditing requirements and duties of auditors are prescribed. This part also provides for the regular publications of issue and redemption prices for units and requires that all publicity comprising an invitation to purchase must indicate where the propsectuses can be obtained.

Part X sets out the requirements that a UCITS authorised in another Member State must comply with in order to market its units within the State. Such UCITS must ensure that facilities are provided within the State for making payments to unit holders, repurchasing units and distribution of required information in at least one of the official languages of the State.

Part XI provides for collaboration between the Central Bank of Ireland and competent authorities in other Member States in relation to its authorization and supervisory duties.

Part XII provides for the inspection and enforcement powers of the Central Bank and the keeping of such books and records as the bank may specify. The bank is provided with powers to revoke authorization, to issue directions and to apply to the High Court for a prohibition on the continuance of the failure by UCITS to comply with requirements. Provision is made for a review by the High Court of the Bank's decision to refuse or revoke authorization or failure to take a decision within the prescribed time limits.

Part XIII provides for penalties for breaches of Regulations.

Part XIV provides for transitional provisions for UCITS existing at the date the Regulations come into operation.

The Regulations come into operation on 1 June, 1989.