Regulation 68A Index tracking fundsF1

(1)

This regulation applies if—

(a)

a reporting fund has an interest in a non-reporting fund, and

(b)

the conditions in paragraph (2) are met for a period of account.

(2)

The conditions are that—

(a)

in accordance with the reporting fund’s rule or the instrument constituting the reporting fund, the aim of the fund’s investment policy is to replicate the performance of a qualifying index,

(b)

the main purpose of the investment in the non-reporting fund is to represent the composition of the qualifying index, and

(c)

the capital and income returns of the reporting fund replicate as closely as practicable the returns of the investments comprised in the qualifying index.

(3)

For the purposes of paragraph (2) an index is a “qualifying index” if—

(a)

it is based solely on the value of securities listed on a recognised stock exchange or admitted to trading on a regulated market,

(b)

an authority responsible for regulating offshore funds recognises the index on the basis that—

(i)

its composition is sufficiently diverse,

(ii)

it represents an adequate benchmark for the market to which it refers, and

(iii)

it is published in such a way that it is widely available, and

(c)

it is calculated and published by a body which is managed independently from the management of the reporting fund.

(4)

Regulations 69 to 71 do not apply in respect of the interest in the non-reporting fund.

Annotations

Textual amendments

F1: Reg. 68A inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Offshore Funds (Tax) (Amendment) Regulations 2011 (S.I. 2011/1211), regs. 1(1), 35