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Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations (Northern Ireland) 1997

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Regulation 64

SCHEDULE 7Mergers and Divisions

1.  This Schedule applies to any reconstruction or amalgamation involving an investment company with variable capital which takes the form of a scheme described in paragraph 4.

2.  An investment company with variable capital may apply to the court under Article 418 of the 1986 Order(1) (power of company to compromise with creditors or members) for an order sanctioning a scheme falling within any of heads (a) to (c) of paragraph 4(1) where—

(a)the scheme in question involves a compromise or arrangement with its shareholders or creditors or any class of its shareholders or creditors; and

(b)the consideration for the transfer or each of the transfers envisaged by the scheme is to be—

(i)shares in the transferee company receivable by shareholders of the transferor company; or

(ii)where there is more than one transferor company and any one or more of them is a public company, shares in the transferee company receivable by shareholders or members of the transferor companies (as the case may be);

in each case with or without any cash payment to shareholders.

3.  A public company may apply to the court under Article 418 of the 1986 Order for an order sanctioning a scheme falling within head (b) and (c) of paragraph 4(1) where—

(a)the scheme in question involves a compromise or arrangement with its members or creditors or any class of its members or creditors; and

(b)the consideration for the transfer or each of the transfers envisaged by the scheme is to be—

(i)shares in the transferee company receivable by members of the transferor company; or

(ii)where there is more than one transferor company and any one or more of them is an investment company with variable capital, shares in the transferee company receivable by members or shareholders of the transferor companies (as the case may be);

in each case with or without any cash payment to shareholders.

4.—(1) The schemes falling within this paragraph are—

(a)any scheme under which the undertaking, property and liabilities of an investment company with variable capital are to be transferred to another such company, other than one formed for the purpose of, or in connection with, the scheme;

(b)any scheme under which the undertaking, property and liabilities of two or more bodies corporate, each of which is either—

(i)an investment company with variable capital; or

(ii)a public company;

are to be transferred to an investment company with variable capital formed for the purpose of, or in connection with, the scheme;

(c)any scheme under which the undertaking, property and liabilities of an investment company with variable capital or a public company are to be divided among and transferred to two or more investment companies with variable capital whether or not formed for the purpose of, or in connection with, the scheme.

(2) Nothing in this Schedule shall be taken as enabling the court to sanction a scheme under which the whole or any part of the undertaking, property or liabilities of an investment company with variable capital may be transferred to any person other than an investment company with variable capital.

5.  For the purposes of this Schedule, Articles 418 to 420 of the 1986 Order shall, subject to paragraph 6, have effect in respect of any application made by virtue of paragraph 2 or 3 as they have effect in respect of applications falling with Article 420A(1) of that Order (that is to say, subject to the provisions of Article 420A of, and Schedule 15B to, that Order (mergers and divisions of public companies))(2).

6.—(1) All the provisions of the 1986 Order referred to in paragraph 5 shall have effect with such modifications as are necessary or appropriate for the purposes of this Schedule.

(2) In particular, any reference in those provisions to a Case 1 Scheme, a Case 2 Scheme or a Case 3 Scheme shall be taken to be a reference to a scheme falling within head (a), (b) or (c) of paragraph 4(1).

(3) Without prejudice to the generality of sub-paragraph (1), the following references in those provisions shall have effect as indicated in heads (a) to (j), that is to say—

(a)any reference to a scheme shall be taken to be a reference to a scheme falling within any of heads (a) to (c) of paragraph 4(1);

(b)any reference to a company shall be taken to be a reference to an investment company with variable capital;

(c)any reference to members shall be taken to be a reference to shareholders of an investment company with variable capital;

(d)any reference to the registered office of a company shall be taken to be a reference to the head office of an investment company with variable capital;

(e)any reference to the memorandum and articles of a company shall be taken to be a reference to the instrument of incorporation of an investment company with variable capital;

(f)any reference to a report under Article 113 of the 1986 Order shall be taken to be a reference to any report with respect to the valuation of any non-cash consideration given for shares in an investment company with variable capital which may be required by SIB regulations;

(g)any reference to annual accounts shall be taken to be a reference to the accounts contained in the annual report of an investment company with variable capital;

(h)any reference to a directors' report, in relation to a company’s annual accounts, shall be taken to be a reference to any report of the directors of an investment company with variable capital that is contained in the company’s annual report;

(i)any reference to the requirements of the 1986 Order as to balance sheets forming part of a company’s annual accounts shall be taken to be a reference to any requirements arising by virtue of SIB regulations as to balance sheets drawn up for the purposes of the accounts contained in the annual report of an investment company with variable capital;

(j)any reference to paid up capital shall be taken to be a reference to the share capital of an investment company with variable capital.

(1)

Article 418 was amended by Article 381 of, and paragraph 16 of Schedule 9 to, the Insolvency (Northern Ireland) Order 1989

(2)

Article 420A of, and Schedule 15B to, the 1986 Order were inserted by the Companies (Mergers and Divisions) Regulations (Northern Ireland) 1987 (S.R. 1987 No. 442)

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