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

Interpretation

2.—(1) In these Regulations, unless the context otherwise requires–

“the Act” means the Financial Services Act 1986;

“corporate based scheme” means a scheme the purpose or effect of which is to enable persons taking part in the scheme to participate in or receive profits or income arising from the acquisition, holding, management or disposal of property of a kind described in section 76(6)(a) of the Act or sums paid out of such profits or income by being–

(a)

the holders of shares in a body corporate which has a leasehold interest or interests in the whole of the land and the building or group of adjacent or contiguous buildings forming part of the property subject to the scheme or which has a leasehold interest in a substantial part of that land and that building or those buildings and a freehold interest in the remainder; and

(b)

entitled, whether by virtue of being the holders of shares in the body corporate mentioned in sub-paragraph (a) above or by virtue of having an interest in the land and the building or group of adjacent or contiguous buildings forming part of the property subject to the scheme which is superior to that held by that body corporate, to receive sums which, after any deductions specified in the document constituting the scheme or otherwise agreed to be made by participants in accordance with the terms of the scheme, are equivalent to all rent paid by the body corporate mentioned in sub-paragraph (a) above in respect of its leasehold interest or interests in that land and building or group of buildings in proportion, in the case of each participant, to the number of shares that participant holds in the body corporate referred to in sub-paragraph (a) above;

“merger” means any arrangements under which one scheme is to be terminated and all its assets and liabilities acquired by another scheme in exchange for the issue of units in that other scheme to participants in the one, with or without any cash payment to participants;

“mortgage” includes a heritable security;

“operator”, in relation to a trust based scheme, means the person described in regulation 6(2)(b)(i) and, in relation to a corporate based scheme, means the body corporate in which shares are held;

“qualified valuer”, in relation to a freehold or leasehold interest in property of any particular kind in any particular area, means an independent person who is a fellow or professional associate of the Royal Institution of Chartered Surveyors or a fellow or associate of the Incorporated Society of Valuers and Auctioneers or a fellow or associate of the Rating and Valuation Association and who either–

(a)

has knowledge of and experience in the valuation of that particular kind of property or of property in that particular area; or

(b)

has knowledge of and experience in the valuation of freehold or leasehold interests in property and has taken advice from a valuer who he is satisfied has knowledge of and experience in the valuation of property of that particular kind or of property in that particular area,

and a person shall not be regarded as independent for the purposes of this definition unless–

(i)

neither he, nor any of his partners (if any) or fellow directors (if any)–

(aa)

is an officer or servant of the trustee or operator, in the case of a trust based scheme, or of the operator, in the case of a corporate based scheme, or of any body corporate in the same group as any of those persons; or

(bb)

has a financial interest which it is reasonable to regard as significant in any of the persons referred to in sub-paragraph (aa) above; and

(ii)

neither the trustee, in the case of a trust based scheme, nor the operator or any body corporate in the same group as either of them has a financial interest which it is reasonable to regard as significant in any firm in which the valuer is a partner or in any body corporate of which he is an officer or servant;

“scheme” means a collective investment scheme; and

“trust based scheme” means a scheme the purpose or effect of which is to enable persons taking part in the scheme, by becoming beneficiaries under a trust, to participate in or receive profits or income arising from the acquisition, holding, management or disposal of property of a kind described in section 76(6)(a) of the Act or sums paid out of such profits or income.

(2) For the purposes of these Regulations, a trustee and operator shall not be regarded as independent of each other unless–

(a) neither of them is in the same group as the other;

(b) no director or other officer or servant of one of them is a director, officer or servant of the other;

(c) neither of them is a controller of the other; and

(d) neither of them nor any body corporate in the same group as either of them has a financial interest which it is reasonable to regard as significant in the other or in any body corporate in the same group as the other.

(3) In these Regulations, references to a freehold interest or to a leasehold interest include references to interests of equivalent tenure outside England and Wales.

(4) References in these Regulations to a numbered regulation shall be construed as references to the regulation bearing that number in these Regulations.

(5) References in any of these Regulations to a numbered paragraph shall, unless the reference is to a paragraph of a specified regulation, be construed as references to the paragraph bearing that number in the regulation in which it appears.