CIR A3.1 CIR A3.1 Alterations to a Fund
CIR A3.1.1 CIR A3.1.1(1) The
Fund Managerof a Public Fundmust, by way of a Special Resolution, obtain prior approval from the Unitholdersfor any proposed change to the Domestic Fundwhich is a fundamental change.(2) In addition to the specific fundamental changes in relation to a Fundprescribed under Article 35(1) of the Law and also under Rules CIR Rule 8.3.2, CIR Rule 8.13.3, CIR Rule 13.4.4(2) and CIR Rule 16.1.3(2), a "fundamental change" under (1) is a change or event which:(a) changes the purpose or nature of the Fund;(b) may materially prejudice a Unitholder;(c) alters the risk profile of the Fund; or(d) introduces any new type of payment out of Fund Property.(3) Notwithstanding (2) above, any change may be fundamental depending on its degree of materiality and effect on the Fundand its Unitholders. Consequently, the Fund Managermust determine whether in each case a particular change is fundamental in nature and, if the Fundis an Investment Trust, obtain the Trustee'sagreement to the outcome of the determination.
CIR A3.1.1 Guidance
For the purpose of this section, a fundamental change to a
Fundis likely to include:a. any proposal for a scheme of arrangement;b. a change in the investment policy to achieve capital growth from investment in one country rather than another;c. a change in the investment objective or policy to achieve capital growth through investment in fixed interest rather than in equity investments;d. a change in the investment policy to allow the Fundto invest in derivatives as an investment strategy which increases its volatility;e. a change to the characteristics of a Fundto distribute income annually rather than monthly;f. the introduction of limited redemption arrangements; org. a change of the custodian, trustee or other oversight arrangement.
CIR A3.1.2 CIR A3.1.2(1) The
Fund Managerof a Public Fundmust give prior written notice to Unitholdersin respect of any proposed change to the operation of a Fundwhere the change constitutes a significant change.(2) A "significant change" in (1) is a change or event which is not a fundamental change under CIR Rule A3.1.2 but:(a) affects a Unitholder'sability to exercise his rights in relation to his investment;(b) would reasonably be expected to cause the Unitholderto reconsider his participation in the Fund;(c) results in any increased payments out of the Fund Propertyto the Fund Manager, the Trusteeor any other director or an associate of either; or(d) materially increases other types of payment out of Fund Property.(3) Changes may be significant depending in each case on their degree of materiality and effect on the Fundand its Unitholders. Consequently the Fund Managerwill need to determine whether in each case a particular change is significant in nature or not and if the Fundis an Investment Trustobtain the Trustee'sagreement of the outcome of the determination.
CIR A3.1.2 Guidance1. The notice period required for a pre-event notification to the
Unitholdershould be of a reasonable length, which is expected to be at least 30 days.2. For the purpose of this section, a significant change is likely to include:a. a change in the method of price publication;b. a change in any operational policy such as dilution policy or allocation of payments policy; orc. an increase in the preliminary charge where Unitsare purchased through a group savings plan.
CIR A3.1.3 CIR A3.1.3(1) A
Fund Managermust to inform Unitholdersin an appropriate manner and timescale of any notifiable changes that are reasonably likely to affect, or to have affected, the operation of the Fund.(2) A notifiable change in (1) is a change or event, other than a fundamental change or a significant change specified in this Appendix, which a Unitholdermust be made aware of unless the Fund Managerconcludes that the change is insignificant.
CIR A3.1.3 Guidance1. The circumstances causing a notifiable change may or may not be within the control of the
Fund Manager.2. For the purpose of this section, a notifiable change might include:a. a change of a named investment manager where the Fundhas been marketed on the basis of that investment manager's involvement;b. a significant political event which impacts on the Fundor its operation;c. a change to the time of the valuation point;d. the introduction of limited issue arrangements; ore. a change in the name of the Fund.3. The appropriate manner and timescale of notification in this section would depend on the nature of the change or event. Consequently, the Fund Managerwill need to assess each change or event individually.4. An appropriate manner of notification could include:a. sending an immediate notification to the Unitholder;b. publishing the information on a website; orc. the information being included in the next periodical report of the Fund.