Regulation 5 Fair value gains and losses of pooled investment funds

After regulation 30J insert—

“Fair value gains and losses of pooled investment funds

30K.

(1)

In this regulation—

• “administering authority” means an administering authority as defined in Schedule 1 to the Local Government Pension Scheme Regulations 2013^f1;

• “fair value” means the fair value of an investment as determined in accordance with proper practices;

• “fair value gain or loss” means a change in the fair value of an investment;

• “pooled investment fund” means—

  1. (a)

     a money market fund;

  2. (b)

     a collective investment scheme as defined in section 235(1) of the Financial Services and Markets Act 2000^f2; or

  3. (c)

     an investment scheme approved by the Treasury under section 11(1) of the Trustee Investments Act 1961^f3(local authority investment schemes).

(2)

Where a local authority—

(a)

invests in a pooled investment fund (other than in its capacity as an administering authority in relation to a pension fund), and

(b)

a fair value gain or loss experienced on the authority’s investment in that pooled investment fund would otherwise be charged to a revenue account by that local authority in accordance with proper practices,

paragraph (3) applies.

(3)

Where this paragraph applies, the authority—

(a)

must not charge to a revenue account an amount in respect of that fair value gain or loss; and

(b)

must charge that amount to an account established, charged and used solely for the purpose of recognising fair value gains and losses in accordance with this regulation.

(4)

Paragraph (3) does not apply in respect of—

(a)

an impairment loss in relation to the authority’s investment in a pooled investment fund as recognised in a revenue account of the authority in accordance with proper practices; or

(b)

a sale or other disposal of the whole or any part of the authority’s investment in a pooled investment fund.

(5)

This regulation applies in relation to accounts prepared for financial years^f4 falling within the period beginning with 1st April 2018 and ending with 31st March 2023.”.