Explanatory note

These Regulations further amend the Personal Equity Plan Regulations 1989 (S.I. 1989/469 as amended by S.I. 1990/678, 1991/733, 2774, 1992/623, 1993/756, 1995/1539, 3287, 1996/846, 1355, 1997/511) (“the principal Regulations”) and come into force on 8th August 1997. The main effect of the amendments is that, on the coming into force of these Regulations, investments in open-ended investment companies (and parts of umbrella companies) will become qualifying investments for general plans under similar conditions as apply to investments in authorised unit trusts. Those conditions have themselves been revised in two main respects. The definitions of “securities fund” and “fund of funds” have been brought more closely in line with those used by the Securities and Investments Board and the investment rules have been changed so that investments may be made in sub-funds of umbrella schemes. The amendments also make a number of minor changes to the principal Regulations mainly to reflect market developments.

Regulation 1 provides for citation and commencement.

Regulation 2 contains definitions.

Regulation 3 amends definitions in relation to unit trust schemes and inserts new definitions in the principal Regulations relating to umbrella schemes and open-ended investment companies.

Regulation 4 amends the conditions in the principal Regulations under which a plan investor may subscribe to a plan by transferring shares allotted or allocated as a result of a public offer, amends the principal Regulations in consequence of the fact that share certificates are not now issued as a matter of course by all companies and makes clarificatory amendments to the provisions of the principal Regulations about arrangements to be made to enable plan investors to receive reports and accounts, attend meetings, vote and receive other information concerning their plan investments.

Regulation 5 amends the rules providing that cash received by way of dividends, interest and proceeds in respect of plan investments may be invested in additional plan investments and, in particular, provides that such cash may be invested in open-ended investment companies.

Regulation 6 deletes a reference to the Unlisted Securities Market, makes an amendment in consequence of the fact that shares listed on the Official List of the Stock Exchange are not always quoted and contains detailed amendments by virtue of which shares in open-ended investment companies become qualifying investments for general plans under similar conditions as apply to units in authorised unit trusts and those conditions are themselves revised.

Regulation 7 contains amendments to the rules concerning plans in which non-qualifying investments were held on 5th April 1990 which are consequential on the amendments made by these Regulations.

Regulation 8 deletes a reference to the Unlisted Securities Market.

Regulations 9, 11, 12(1) and 13(1) and (2) make amendments which are consequential on the amendments made by the Personal Equity Plan (Amendment) Regulations 1997 (S.I. 1997/511).

Regulation 10 contains an amendment clarifying the extent of the tax relief given by regulation 17 of the principal Regulations.

Regulations 12(2) and 13(3) contain further consequential amendments to the requirement for the annual return of information by plan managers and to the operation of the capital gains tax provisions relating to company reorganisations in relation to shares and units held under plans.