11. After section 24 of the 1986 Act (operators and trustees of recognised schemes) there shall be inserted the following section—
24A. An investment company with variable capital is an authorised person as respects—
(a)investment business which consists in operating the collective investment scheme constituted by the company; and
(b)any investment business which is carried on by the company in connection with or for the purposes of operating that scheme.”.
12. In section 47A(4) of the 1986 Act(1) (disciplinary action which may be taken in respect of failure to comply with statements of principle) the word “or” at the end of paragraph (c) shall be omitted and after paragraph (d) there shall be inserted
“or
(e)the giving of a direction under regulation 18 of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 (directions) or the making of an application for an order under regulation 20 of those Regulations (application to court to remove director or depositary);”.
13. In section 72 of the 1986 Act (winding up orders), at the end of subsection (5) (petition to wind up members of recognised self-regulating organisation) there shall be inserted the following subsection—
“(6) Subsection (5) above does not apply to the presentation of a petition under subsection (1) above for the winding up of an investment company with variable capital.”.
14. In section 76(1) of the 1986 Act (restrictions on promotion of collective investment schemes), after the words “authorised unit trust scheme” there shall be inserted the words “or an investment company with variable capital”.
15. In section 83(2) of the 1986 Act (activities in which manager of authorised unit trust scheme may engage)—
(a)after paragraph (a) there shall be inserted—
“(aa)acting as a director of an investment company with variable capital;”;
(b)in paragraph (b), after the words “mentioned in paragraph (a)” there shall be inserted the words “or (aa)”.
16. In section 87 of the 1986 Act (schemes authorised in designated countries or territories)—
(a)at the beginning of subsection (2) there shall be inserted “Subject to subsection (2A) below,”; and
(b)at the end of subsection (2) there shall be inserted the following subsection—
“(2A) Nothing in subsection (2) above shall require the comparison set out in that subsection to be made where—
(a)the class of collective investment schemes to be specified in an order includes schemes having characteristics corresponding to those of an investment company with variable capital; and
(b)having regard to the characteristics of such schemes, it appears more appropriate to consider whether investors in the United Kingdom are afforded protection at least equivalent to that provided for them by the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996;
and, to the extent that the requirements of paragraph (b) above are met, the relevant comparison shall be between the protection afforded to investors in the United Kingdom by the law under which collective investment schemes of the class to be specified in the order are authorised and supervised in the country or territory concerned and the protection provided for such investors by the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996.”.
17. In section 102 of the 1986 Act (register of authorised persons etc)—
(a)in subsection (2), after paragraph (b) there shall be inserted the following paragraph—
“(bb)in the case of an investment company with variable capital which is an authorised person by virtue of section 24A above, the name of the company, the address of the company’s head office and the names and addresses of the directors and depositary of the company;”;
(b)in subsection (6), for the words “or (b)” there shall be substituted the words “, (b) or (bb)”.
18. In section 104(1) of the 1986 Act (power to call for information) after “24,” there shall be inserted “24A,”.
19. In section 108(1) of the 1986 Act (power to require second audit), after the words “by virtue of section” there shall be inserted “24A,”.
20. In section 205A of the 1986 Act(2) (supplementary provisions with respect to subordinate legislation)—
(a)in subsection (1) for “The following provisions” there shall be substituted “Subsections (2) to (4) below”; and
(b)after subsection (1) there shall be inserted the following subsection
“(1A) Subsections (2) to (4) below also apply to any power to make regulations by virtue of regulation 6 of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 in the event that that power becomes exercisable by the Treasury by virtue of an order under section 115 above.”.
21. In section 206(1) of the 1986 Act(3) (publication of information and advice), after paragraph (b) there shall be inserted the following paragraphs—
“(bb)the operation of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 and any regulations made by virtue of regulation 6 of those Regulations;
(cc)any matters relating to the functions to which regulation 73 of those Regulations relates;”.
22. In section 207(1) of the 1986 Act (interpretation) after the definition of “investment agreement” there shall be inserted the following definition—
““investment company with variable capital” and, in relation to such a company, “depositary” have the same meaning as in the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996;”.
23. In Schedule 8 to the 1986 Act(4) (principles applicable to designated agency’s legislative provisions), at the end of paragraph 1(1) there shall be inserted the words “and the provisions of regulations made under regulation 6 of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996”.
24. In paragraph 7 of Schedule 9 to the 1986 Act (designated agencies; status and exercise of transferred functions), after “this Act” there shall be inserted “or, as the case may be, the provision of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996,”.
25. In section 38(6) (permitted forms for appropriate schemes), after paragraph (c) there shall be inserted the following paragraph—
“(d)an investment company with variable capital within the meaning of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996.”.
Section 47A was inserted into the 1986 Act by section 192 of the Companies Act 1989 (c. 40).
Section 205A of the 1986 Act was inserted by section 206(1) of, and paragraph 18 of Schedule 23 to, the Companies Act 1980; subsection (1) was amended by paragraph 8 of Schedule 4 to the Transfer of Functions (Financial Services) Order 1992 (S.I. 1992/1315).
Section 206 of the 1986 Act was amended by section 206 of, and paragraph 19 of Schedule 23 to, the Companies Act 1989 (c. 40).
Paragraph 1 was substituted by section 206(1) of, and paragraph 23 of Schedule 23 to, the Companies Act 1989.