The Financial Services Act 1986 (Single Property Schemes) (Exemption) Regulations 1989

Requirements concerning disposal of property

12.—(1) Subject to the provisions of paragraphs (2) and (3), the terms of a scheme must require that neither the trustee, in the case of a trust based scheme, nor the operator, in the case of a corporate based scheme, may dispose of any of the land or of the building or of any of the group of adjacent or contiguous buildings forming part of the property subject to the scheme or of any interest which he has in that land or that building or group of buildings without first obtaining the approval of a majority representing at least 75% in number of the units in the scheme held by participants present and voting at a meeting convened in accordance with the terms of the scheme.

(2) Paragraph (1) does not apply where the disposal–

(a) arises because the scheme is being wound-up or terminated; or

(b) occurs as a result of the grant or exercise of a mortgage or charge over the property; or

(c) arises by reason of compulsory acquisition; or

(d) is of property which may reasonably be regarded as ancillary to other property subject to the scheme; or

(e) will not, in the reasonable opinion of the operator, involve the receipt of a sum which is 15% or more of the value of all units in the scheme in issue calculated on the basis that the value of each unit is the price quoted, at the close of business on the most recent business day before the contract for the disposal of the property was entered into, on a recognised investment exchange on which units in the scheme are traded as the lowest price at which units could be bought in what, in the reasonable opinion of the operator, is a standard number.

(3) The terms of a scheme must provide that–

(a) no vote may be taken on a question of the kind described in paragraph (1) in any case in which the proposed purchaser is a body corporate unless the chairman of the meeting has received, from the proposed purchaser, a written notice verified in such manner, if any, as is specified in the terms of the scheme, identifying all those participants who are in the same group as the proposed purchaser and all those participants who are directors of the proposed purchaser or of a body corporate in the same group as the proposed purchaser; and

(b) no participant may vote on a question of a kind described in paragraph (1) if he is the proposed purchaser or has been identified in a notice given to the chairman of the meeting by the proposed purchaser.