UKLR 11.7 Notifications and periodic financial information

A closed-ended investment fund must notify any change in its taxation status to a RIS as soon as possible.

In addition to the requirements in UKLR 6.6 (Annual financial report), a closed-ended investment fund must include in its annual financial report:

1. (1)

   a statement (including a quantitative analysis) explaining how it has invested its assets with a view to spreading investment risk in accordance with its published investment policy;

2. (2)

   a statement, set out in a prominent position, as to whether, in the opinion of the directors, the continuing appointment of the investment manager on the terms agreed is in the interests of its shareholders as a whole, together with a statement of the reasons for this view;

3. (3)

   the names of the fund’s investment managers and a summary of the principal contents of any agreements between the closed-ended investment fund and each of the investment managers, including but not limited to:

   1. (a)

      an indication of the terms and duration of their appointment;

   2. (b)

      the basis for their remuneration; and

   3. (c)

      any arrangements relating to the termination of their appointment, including compensation payable in the event of termination;

4. (4)

   the full text of its current published investment policy; and

5. (5)

   a comprehensive and meaningful analysis of its portfolio.

In addition to the requirements in UKLR 6 (Equity shares (commercial companies): continuing obligations), half-yearly reports and, if applicable, preliminary statements of annual results must include information showing the split between:

1. (1)

   dividend and interest received; and

2. (2)

   other forms of income (including income of associated companies).

A closed-ended investment fund that, as at the end of its financial year, has invested more than 20% of its assets in property must include in its annual financial report a summary of the valuation of its portfolio, carried out in accordance with UKLR 11.7.5R.

A valuation required by UKLR 11.7.4R must:

1. (1)

   either:

   1. (a)

      be made in accordance with the Appraisal and Valuation Standards (6th edition) issued by the Royal Institution of Chartered Surveyors; or

   2. (b)

      where the valuation does not comply in all applicable respects with the Appraisal and Valuation Standards (6th edition) issued by the Royal Institution of Chartered Surveyors, include a statement which sets out a full explanation of such non-compliance; and

2. (2)

   be carried out by an external valuer as defined in the Appraisal and Valuation Standards (6th edition) issued by the Royal Institution of Chartered Surveyors.

The summary described in UKLR 11.7.4R must include:

1. (1)

   the total value of properties held at the year end;

2. (2)

   totals of the cost of properties acquired;

3. (3)

   the net book value of properties disposed of during the year; and

4. (4)

   an indication of the geographical location and type of properties held at the year end.

1. (1)

   This rule applies to a closed-ended investment fund that has no executive directors.

2. (2)

   A closed-ended investment fund’s statement required by UKLR 6.6.6R(6) need not include details about Principles P, Q and R and Provisions 32 to 41 of the UK Corporate Governance Code, except to the extent that those principles or provisions relate specifically to non-executive directors.

[Note: The UK Corporate Governance Code states that ‘externally managed investment companies (which typically have a different board and company structure that may affect the relevance of particular Principles) may wish to use the Association of Investment Companies’ Corporate Governance Code to meet their obligations under the Code’.]

A closed-ended investment fund must notify to a RIS within 5 business days of the end of each quarter a list of all investments in other listed closed-ended investment funds, as at the last business day of that quarter, which themselves do not have stated investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.