Financial Markets Conduct Regulations 2014

52 Information about material contracts, market index, and conflicts of interest, etc

(1)

The register entry must contain,—

(a)

if the existence, or any of the terms, of a contract entered into in respect of the scheme is material information,—

(i)

a copy of that contract; or

(ii)

a summary of the key terms of that contract (including the terms that are material information); and

(b)

a document, in relation to a market index referred to in clause 61, that states where more information on the market index may be obtained; and

(c)

a document that describes the nature of any conflict of interest that currently exists or is likely to arise in the future; and

(d)

if, under clause 32(2)(b) a best estimate of amounts is used in the PDS, a description of the basis on which the estimate is made and the assumptions that have been used in producing the estimate.

(2)

Subclause (1)(a) does not apply to a contract if—

(a)

all of the key terms of the contract (including the terms that are material information) are summarised or otherwise disclosed in the PDS; or

(b)

it is entered into in the ordinary course of business of the manager.

(3)

If a fund was not in existence at the end of the most recent quarter before the date of the PDS, the register entry is not required to contain the information in subclause (1)(b).

(4)

The following apply for the purposes of subclause (1)(c):

(a)

if conflicts of interest that are likely to arise in the future are of a particular type, a general description of that type of conflict of interest is a sufficient description of those conflicts of interest for the purposes of subclause (1)(c):

(b)

paragraph (a) applies to a particular type of conflict of interest that currently exists if that type of conflict of interest is also likely to arise in the future:

(c)

if the scheme has more than 1 fund, the document must identify the fund or funds that are or may be affected by each conflict of interest:

(d)

the document must include a description of the circumstances in which, and how, the conflict of interest would, or could reasonably be expected to, materially influence the investment decisions of the manager or investment manager (or both) in respect of the managed fund:

(e)

the document must describe the steps that have, or will be taken, to manage any conflict of interest.

(5)

In this clause,—

conflict of interest means a financial or any other interest, a relationship, or any other association of the manager, of an investment manager, or of a relevant person that would, or could reasonably be expected to, materially influence the investment decisions of the manager or investment manager (or both) in respect of the managed fund

Example

A manager intends to invest scheme property in 1 or more related underlying funds.

relevant person, in relation to a managed fund, means—

(a)

a director of the manager; or

(b)

a senior manager of the manager; or

(c)

an employee of the manager who has a significant impact on the investment decisions that are made in respect of the managed fund; or

(d)

an associated person of the manager (or a director or senior manager of that associated person).