{
  "url": "https://openlegislation.uk/financial-services-and-markets-act-2000-stakeholder-products-regulations-2004/regulation-7",
  "json_url": "https://openlegislation.uk/financial-services-and-markets-act-2000-stakeholder-products-regulations-2004/regulation-7.json",
  "legislation": "uksi/2004/2738",
  "legislation_title": "The Financial Services and Markets Act 2000 (Stakeholder Products) Regulations 2004",
  "legislation_url": "https://openlegislation.uk/financial-services-and-markets-act-2000-stakeholder-products-regulations-2004",
  "path": "regulation/7",
  "kind": "regulation",
  "number": "7",
  "heading": "Characteristics and conditions applicable to certain stakeholder products",
  "text": "(1) The characteristics in relation to an investment scheme are—\n(a) no more than 60 per cent. in value of the investment property, calculated in accordance with paragraph (3), consists of relevant investments;\n(b) the investment property should be selected and managed having regard to the need to achieve a balance between—\n(i) the opportunity for the investor to benefit from growth in the value of investments generally; and\n(ii) control of the risk of loss of value in the investment; and\n(c) the manager has regard to—\n(i) the need for diversification of the investment property, in so far as appropriate to the circumstances of the investment scheme; and\n(ii) the suitability for the purposes of the scheme of any investment option proposed.\n(2) The conditions with which the investment scheme must comply are—\n(a) the minimum amount which an investor may contribute to the investment scheme on a single occasion is £20, except where the manager permits a smaller amount;\n(b) the manager must permit payment to the investment scheme by any of the following means, at the option of the investor—\n(i) cheque;\n(ii) direct debit;\n(iii) standing order;\n(iv) direct credit (other than standing order),\nand excluding payments by cash, credit card or debit card or any combination including a payment by cash, credit card or debit card;\n(c) the value of an investor’s rights in the investment scheme and the value of the investment property may be reduced in the circumstances and to the extent set out in regulation 9; and\n(d) where the stakeholder product consists of—\n(i) units in a relevant collective investment scheme, it must be a requirement of that scheme that the purchase and sale price of those units shall, at any given time, not differ from each other and that price must be made available to the public on a daily basis;\n(ii) rights under a relevant linked long-term contract which are expressed as shares in funds, it must be a requirement of that contract that the purchase and sale price of those shares shall, at any given time, not differ from each other and that price must be made available to the public on a daily basis.\n(3) For the purposes of the calculation set out in paragraph (1)(a), the following provisions apply—\n(a) where any of the investment property is invested in units in a relevant collective investment scheme, only such of the assets of that scheme as are invested, directly or indirectly, in relevant investments shall be taken into account; and\n(b) the calculation shall be taken as an average over a period of 3 months.\n(4) When calculating the average over a period of 3 months for the purposes of paragraph (3)(b) (“the average”), where the manager has specified under paragraph (5) that the calculation is to be carried out weekly or monthly—\n(a) where the average is to be calculated weekly, it is to be carried out on such day of the week (“the specified day”) as has been so specified by the manager (except that, where that day is not a working day, the average is to be calculated on the next working day), and the average on each subsequent day prior to the next specified day is to be taken to be the average on the previous specified day; and\n(b) where the average is to be calculated monthly, it is to be so calculated on such day in each month (“the specified day”) as has been so specified by the manager (except that, where that date is not a working day, the average is to be calculated on the next working day), and the average on each subsequent day prior to the next specified date is to be taken to be the average on the previous specified date.\n(5) For the purposes of paragraph (3)(b)—\n(a) the frequency, which must be daily, weekly or monthly, with which the average is to be calculated; and\n(b) where the average is to be calculated using weekly or monthly figures, that day of the week or, as the case may be, the date in the month on which it is to take place,\nmust be specified in writing by the manager; and the specification may not be amended during the period of 12 months after the date on which it is made.\n(6) Where, following the calculation under paragraph (4), the average value of the investment property comprises more than 60 per cent. of relevant investments, the manager must take steps to bring that average value within the limit prescribed in regulation 7(1)(a) as soon as reasonably practicable and in any event within 3 months.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Words in reg. 7(2)(b) substituted (6.4.2005) by The Financial Services and Markets Act 2000 (Stakeholder Products) (Amendment) Regulations 2005 (S.I. 2005/594), regs. 1, 2(3)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/2004/2738/regulation/7",
    "retrieved_at": "2026-10-29T05:16:38.365610+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}