Unit Trusts Act, 1972

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Cancellation of registration of unit trust schemes.

5.—(1) Subject to the provisions of this section, if, in relation to a registered unit trust scheme—

(a) there is a contravention of a provision of this Act or of an order thereunder,

(b) the conditions specified in paragraphs (b), (c) and (f) of section 3 (1) of this Act are no longer fulfilled, or

(c) the Minister is no longer satisfied in respect of the matters specified in paragraphs (a), (d), (e) and (g) of the said section 3 (1),

the Minister may direct the registrar to cancel the registration of the scheme in the register upon a day specified in the direction, and the registrar shall comply with the direction.

(2) Whenever the Minister proposes to give a direction under this section in relation to a unit trust scheme—

(a) he shall notify the manager and the trustee under the scheme of his proposal and of the reasons therefor and that the manager or the trustee may, within 30 days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed direction,

(b) the manager or the trustee may make such representations in writing to the Minister within the time aforesaid,

(c) the Minister shall, before deciding to give or refrain from giving the direction, consider any representations duly made to him under this section in relation to the proposed direction, and if he decides to give the direction, shall give it within 30 days after the date of the making of the representations to him, or if none are made, within 30 days after the last day for making them.

(3) The Minister shall not give a direction under this section in relation to a unit trust scheme unless he is satisfied that it is necessary to do so in the public interest and in the interests of holders of units created under the scheme.

(4) (a) Where a direction in relation to a unit trust scheme is given under this section, the registrar shall notify the manager and the trustee under the scheme of the direction not less than 60 days before the day on which it is intended to take effect and the manager or trustee may, within 30 days after the date on which the notification is given to the manager or the trustee, as the case may be, appeal against the direction to the High Court whose decision shall be final and unappealable.

(b) The High Court may, if it thinks it proper to do so, provide by order that a direction under this section in relation to which an appeal under this subsection relates shall not have effect during the period, or such part of it as it may specify in the order, prior to the determination of the appeal.

(5) (a) Whenever the Minister gives a notification under subsection (2) of this section in relation to a direction under this section, he may, at the same time or—

(i) in case he subsequently decides to refrain from giving the direction, at any time before such decision,

(ii) in any other case, at any time before the direction takes effect,

require the manager under the unit trust scheme to which the notification relates to refrain from selling units of the scheme, or publishing or procuring the publication of advertisements in relation to the scheme, during the period prior to his decision or before the direction takes effect, as may be appropriate, and the manager shall, subject to the provisions of this section, comply with the requisition.

(b) The manager under a unit trust scheme to whom a requisition under this subsection relates may, within 20 days after the date on which the requisition was given to him, appeal against the requisition to the High Court whose decision shall be final and unappealable.

(c) The High Court may, if it thinks it proper to do so, provide by order that a requisition under this subsection shall not have effect during the period, or such part of it as it may specify in the order, prior to the determination of the appeal against the requisition under paragraph (b) of this subsection or of an appeal against a direction under this section in relation to the unit trust scheme to which the requisition relates.

(d) Whenever a direction under this section in relation to a unit trust scheme ceases to have effect, a requisition under this subsection in relation to that scheme shall also cease to have effect.

(e) A manager under a unit trust scheme who contravenes or fails to comply with a requisition under this subsection or section 6 (5) of this Act shall be guilty of an offence.