The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001

The Personal Equity Plan Regulations 1989 (S.I. 1989/469)

Introduction

120.  Amend the Personal Equity Plan Regulations 1989 in accordance with Articles 121 to 125.

Interpretation

121.—(1) Amend regulation 2(1) (interpretation)(1) as follows.

(2) Amend sub-paragraph (a) in accordance with paragraphs (3) and (4) below.

(3) In the definition of “company” in paragraph (i) for “75(8) of the Financial Services Act 1986” substitute “236 of the Financial Services and Markets Act 2000”.

(4) For the definition of “European institution” substitute—

““European institution” means an EEA firm of the kind mentioned in paragraph 5(a), (b) or (c) of Schedule 3 to the Financial Services and Markets Act 2000 which is an authorised person for the purposes of that Act as a result of qualifying for authorisation under paragraph 12 of that Schedule;”.

(5) Amend sub-paragraph (b) in accordance with paragraphs (6) to (14) below.

(6) Before the definition of “authorised unit trust” insert—

• ““authorised fund” means—

  (i)

  an authorised unit trust, or

  (ii)

  an open-ended investment company with variable capital incorporated in the United Kingdom in the case of which an authorisation order made by the Financial Services Authority under regulation 14 of the Open-Ended Investment Companies Regulations 2001(2) is in force;”.

(7) In the definition of “authorised unit trust” for “78 of the Financial Services Act 1986” substitute “243 of the Financial Services and Markets Act 2000”.

(8) In the definition of “the first condition” for the words from “subject to” to the end substitute “of the scheme, or subject to the trusts of the scheme, to consist of units in, or shares of, authorised funds or parts of umbrella schemes which are not securities schemes or warrant schemes;”.

(9) In the definition of “the second condition”—

(a)for “subject to the trusts of the scheme” substitute “of the scheme, or subject to the trusts of the scheme,”;

(b)in paragraph (i) for “87 or 88 of the Financial Services Act 1986” substitute “270 or 272 of the Financial Services and Markets Act 2000”;

(c)for paragraph (ii) to the end substitute—

“(ii)a part of a scheme mentioned in paragraph (i) which would be a part of an umbrella scheme if the definition of “umbrella scheme” and a part thereof applied to a scheme mentioned in paragraph (i),

where the terms of the scheme mentioned in paragraph (i) identify that scheme, or the part thereof, as the case may be, as a scheme or part that would belong to one of the categories of securities scheme or warrant scheme, if that scheme or part, as the case may be, were independently an authorised fund;”.

(10) In the definition of “fund of funds”—

(a)for ““fund of funds”” substitute ““fund of funds scheme””;

(b)in paragraph (i)—

(i)for “authorised unit trust” substitute “authorised fund”;

(ii)for “fund of funds” substitute “fund of funds scheme”;

(c)in paragraph (ii) for “authorised unit trust” substitute “authorised fund”.

(11) In the definition of a “relevant UCITS”—

(a)in paragraph (i) for “86 of the Financial Services Act 1986” substitute “264 of the Financial Services and Markets Act 2000”;

(b)in paragraph (ii) for the words from “an umbrella company” to “in either case” substitute “an umbrella scheme, if the definition of “umbrella scheme” and a part thereof”;

(c)for “securities fund, warrant fund, securities company or warrant company” substitute “securities scheme or warrant scheme”;

(d)for the words from “authorised unit trust” to the end substitute “authorised fund;”.

(12) For the definition of “securities fund” substitute—

• ““securities scheme” means—

  (i)

  an authorised fund which according to the terms of the scheme is a securities scheme belonging to the category under that name established by the Financial Services Authority, and

  (ii)

  a part of an umbrella scheme which the terms of the scheme identify as a part which would belong to that category if it were itself an authorised fund;”.

(13) For the definition of “umbrella scheme” substitute—

• ““umbrella scheme” means an authorised fund which according to the terms of the scheme is an umbrella scheme belonging to the category under that name established by the Financial Services Authority, and

  (i)

  in the case of an authorised fund which is an authorised unit trust, references to a part of an umbrella scheme shall be construed in accordance with subsection (8) of section 468 of the Taxes Act, and, in relation to a part of an umbrella scheme, references to investments subject to the trusts of an authorised unit trust and to a unit holder shall be construed in accordance with subsection (9) of that section, and

  (ii)

  in the case of an authorised fund which is an open-ended investment company, references to a part of an umbrella scheme shall be construed in accordance with subsection (18) of section 468 of the Taxes Act as that subsection is added in relation to open-ended investment companies by regulation 10(4) of the 1997 Regulations, and, in relation to a part of an umbrella scheme, references to investments of the company shall be construed in accordance with subsection (12) of that section as so added;”.

(14) For the definitions of “warrant company” and “warrant fund” substitute—

• ““warrant scheme” means—

  (i)

  an authorised fund which according to the terms of the scheme is a warrant scheme belonging to the category under that name established by the Financial Services Authority, and

  (ii)

  a part of an umbrella scheme which the terms of the scheme identify as a part that would belong to that category if it were itself an authorised fund;”.

(15) In sub-paragraph (c)—

(a)omit the definitions of “securities company” and “umbrella company”;

(b)in the definition of “shares” for “umbrella company” substitute “umbrella scheme”.

General investment rules

122.—(1) Amend regulation 5 (general investment rules)(3) as follows.

(2) In paragraph (1) for sub-paragraphs (a) and (b) substitute—

“(a)in the case of an authorised fund which is a dual priced unit trust, at the manager’s price for the sale of the relevant class of units within the meaning of, and complying with the requirements of, rule 15.4.4 of the Collective Investment Schemes Sourcebook;

(b)in the case of an authorised fund which is a single priced unit trust or an open-ended investment company, at the price of a unit or share within the meaning of, and complying with the requirements of, rule 4.3.11 of the Collective Investment Schemes Sourcebook; and”.

(3) After paragraph (1) insert—

“(1ZA) In paragraph (1)(a) and (b)—

“the Collective Investment Schemes Sourcebook” means the sourcebook of that name made by the Financial Services Authority under the Financial Services and Markets Act 2000(4);

“a dual priced unit trust” means an authorised unit trust in respect of which the manager gives different prices for buying and selling units at the same time;

“a single priced unit trust” means an authorised unit trust in respect of which the manager gives the same price for buying and selling units at the same time.”.

Qualifying investments

123.—(1) Amend regulation 6 (qualifying investments)(5) as follows.

(2) In paragraph (2)—

(a)for sub-paragraph (g) substitute—

“(g) units in, or shares of, a securities scheme or a warrant scheme, in circumstances where the scheme satisfies the condition specified in paragraph (8);”;

(b)for sub-paragraph (j) substitute—

“(j)units in, or shares of, a fund of funds scheme, in circumstances where the scheme satisfies the condition specified in paragraph (9);”.

(3) In paragraph (4)(a) for paragraphs (iv) and (v) substitute—

“(iv)units in or shares in, or rights to units in or shares in, an authorised fund or a part of an umbrella scheme;”.

(4) In paragraph (8) for “company” substitute “scheme” (twice).

(5) For paragraph (9) substitute—

“(9) The condition specified in this paragraph is that not more than 50 per cent. in value of the investments of the scheme, or subject to the trusts of the scheme, are—

(a)units in, or shares of, a securities scheme or a warrant scheme, or

(b)units in, or shares of, a relevant UCITS,

where the securities scheme, warrant scheme or UCITS does not satisfy the condition in paragraph (8).”.

Plan manager—qualifications and Board’s approval

124.  Amend regulation 11(2) (plan manager—qualifications and Board’s approval)(6) as follows—

(a)in sub-paragraph (b)(i) for the words from “Chapter III” to “Act”) substitute

• “section 31(1)(a) or (c) of, or Schedule 5 to, the Financial Services and Markets Act 2000 who has permission to carry on one or more of the activities specified in Articles 14, 21, 25, 37, 40, 45, 51 and 53 and, in so far as it applies to any of those activities, Article 64 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001”;

(b)in paragraph (b)(ii) for the words from “may” to “1992” substitute “carries on one or more of those activities”;

(c)in sub-paragraph (c) for the words from “any prohibition” to “65 of the 1986 Act” substitute “any requirement imposed under section 43 of the Financial Services and Markets Act 2000, or by any prohibition imposed by or under any rules made by the Financial Services Authority under that Act”.

Returns of information by plan manager

125.  In regulation 24A(3) (returns of information by plan manager)(7)—

(a)in sub-paragraph (a) for paragraph (iv) substitute—

“(iv)units in, or shares of, securities schemes and warrant schemes,”;

(b)in sub-paragraph (a) for paragraph (vi) substitute—

“(vi)units in, or shares of, fund of funds schemes, and”.