2(1)The arrangements must provide—
(a)for the setting up, in relation to any member, of a special reserve fund vested in one or more trustees who have control over it, and
(b)for the appointment of an authorised fund manager (who may be the trustees or one of the trustees) to invest the capital of the fund and to vary the investments;
and in this sub-paragraph “authorised” means authorised under the rules of Lloyd's.
(2)The arrangements must provide for the income arising from the assets of the member’s special reserve fund being held on trust for the member or his personal representatives or assigns.
(3)The arrangements must be such as to secure that, except as required or permitted (whether expressly or by necessary implication) by this Part or Part II of this Schedule, no payments shall be made into or out of the member’s special reserve fund.