(1) Every manager of a unit trust shall be either—
(1A) Notwithstanding anything in the Financial Reporting Act 1993, a manager of a unit trust that is an exempt company within the meaning of that Act and that complies with the requirements of that Act relating to reporting entities shall not be required to comply with the requirements of that Act relating to exempt companies.
(2) No company shall act as manager of a unit trust unless a person approved by the FMA has given a bond to Her Majesty the Queen in the sum of 20,000 pounds conditioned to secure the due discharge by the manager of its obligations.
(3) The sum of 20,000 pounds named in a bond given under this section shall not be deemed to be a penalty, but shall be liquidated damages, and shall accordingly be recoverable in full as a debt due by the surety to Her Majesty the Queen unless the surety proves performance of every condition upon which the bond is defeasible.
(4) Every sum so recovered shall be paid into a Crown Bank Account to the credit of a Crown Bank Account, and the residue, after the deduction of costs and other expenses, shall, without further appropriation than this section, be paid to the trustee and applied by it towards the discharge of the obligations of the manager; and any balance not required for that purpose shall be refunded to the surety.
(5) A bond given under subsection (2) must be released if the unit trust has been wound up and the trustee and manager of the unit trust have given notice in writing of the winding up to the FMA.
Section 4(1): replaced, on 1 July 1994, by section 2 of the Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
Section 4(1A): inserted, on 1 July 1994, by section 2 of the Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
Section 4(2): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
Section 4(4): amended, on 25 January 2005, pursuant to section 83(7) of the Public Finance Act 1989 (1989 No 44).
Section 4(5): inserted, on 15 April 2004, by section 3 of the Unit Trusts Amendment Act 2004 (2004 No 34).
Section 4(5): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).