# The Authorised Unit Trust Scheme (Investment and Borrowing Powers) Regulations 1988, Regulation 31: Borrowing


(1) The manager shall take all reasonable steps and exercise all due diligence to ensure that the trustee does not borrow sums of money repayable out of the property of the scheme except in accordance with the provisions of this regulation.
(2) No sum shall be borrowed if, on the date it is proposed to borrow the sum, that sum together with all other sums borrowed and not repaid at that date would—
(a) amount in aggregate to a sum greater than the total of all sums which are to become part of the property of the scheme within one calendar month of that date; and
(b) if they were immediately repayable, require more than 10% in value of the property of the scheme to be utilised for the purposes of repayment.
(3) If, at any time, the total of sums borrowed which are repayable out of the property of the scheme is such that either of the conditions described in paragraph (2)(a) or (b) is fulfilled the manager shall, as soon as is reasonably practicable having regard to the interests of participants, take such steps as are necessary to ensure that the total of the sums borrowed is reduced so that it does not give rise to circumstances of the kind described in this paragraph.
(4) The foregoing provisions of this regulation do not apply to any arrangement which may be made without contravening regulation 8, being an arrangement under which currency other than the base currency is borrowed and an amount of base currency at least equal to the amount of currency borrowed is placed, and continues to be kept, on deposit by the borrower with the lender, his agent or any other person designated by the lender for that purpose provided that if the amount of base currency kept on deposit ceases to be at least equal to the amount of currency borrowed the manager shall, as soon as is reasonably practicable in the interests of participants, take such steps as are necessary to ensure that sufficient base currency is placed on deposit as will secure that the total amount deposited is at least equal to the amount of currency borrowed.
(5) The trustee shall take all reasonable steps and exercise all due diligence to exercise such degree of supervision over the manager’s operation of the scheme as is appropriate with a view to ensuring that the manager fulfils the duties imposed on him by paragraphs (3) and (4).
(6) Nothing in this regulation shall be construed as preventing the trustee from borrowing monies in accordance with this regulation, on the best commercial terms available, for the account of the fund either from himself, acting otherwise than in his capacity as trustee, or from any person in the same group as himself or from any controller of his or from any person of whom he is a controller.

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Source: https://www.legislation.gov.uk/uksi/1988/284/regulation/31 (the official version)
Page: https://openlegislation.uk/authorised-unit-trust-scheme-investment-and-borrowing-powers-regulations-1988/regulation-31
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.