Terms and Conditions of the Cofunds Junior Investment ISA

Transcription

1 SELF-DIRECTED Implicit Pricing Model Terms and Conditions of the Cofunds Junior Investment ISA Including Key Features of the Cofunds Junior Investment ISA. This document relates to the Cofunds Junior Investment ISA. This is the only product available on the Cofunds platform for a person under the age of 18. FundChoice and Garrison Investment Analysis Limited use the services of Cofunds Limited (Cofunds) the UK s leading independent Investment platform. 12/12

2 Self-Directed Implicit Pricing Model Terms and Conditions of the Cofunds Junior Investment ISA This document relates to the Cofunds Junior Investment ISA. This is the only product available on the Cofunds platform for a person under the age of 18. Version JISA1212 Issued and approved by Cofunds Limited, 1st Floor, 1 Minster Court, Mincing Lane, London EC3R 7AA. Registered in England and Wales No Authorised and regulated by the Financial Services Authority (FSA) under FSA Registration No Terms and Conditions of the Cofunds JISA 1

3 Contents Page Definitions 3 Terms and Conditions of the Cofunds Junior Investment ISA 4 Key Features of the Cofunds Junior Investment ISA 12 The Cofunds JISA is available on the Cofunds platform for customers in the Self-directed Implicit Pricing Model Investment Service. To open the account the customer must have parental responsibility for an eligible child, or be the child provided you are aged 16 or 17 and wish to operate the account yourself. This product is a stocks and shares JISA that can be used to invest in Commission included Share Class funds available on the Cofunds platform in a tax-efficient way. 2 Terms and Conditions of the Cofunds JISA

4 Definitions These definitions apply to the sections in the Terms and Conditions of the Cofunds Junior Investment ISA (Cofunds JISA). In this agreement, unless otherwise stated or the context requires otherwise, where words have been defined in the singular, the same definition shall be applied to the plural, and vice versa. Except where the context requires otherwise, the following expressions have the meanings set out below: Account: The account that we open to record investments that you make in the Cofunds JISA which is a stocks and shares JISA. Administration Address: Cofunds Limited, PO Box 1103, Chelmsford CM99 2XY. Advised: This means the Service Type that applies to you if you receive financial advice from your Nominated Adviser. Your Adviser will provide you with this service in situations where they make a personal recommendation on an investment which is carried out on your behalf through the Cofunds platform. Your Adviser has responsibility for ensuring the investment is suitable for you. Your Adviser may charge you a fee for the services they provide and may also receive a commission paid out of your product charges. Application: An application completed by you to invest in a JISA. Assets: Investments, income, interest, cash balances and any other rights and entitlements from time to time held within your Account. Bank: The bank or banks appointed from time to time by Cofunds to provide banking services to the Cofunds Platform. Full, up to date details of the banks with which money is held can be obtained by contacting your Nominated Intermediary or visiting the Cofunds website at Business Day: Any day when the London Stock Exchange is open for business. Cash Reserve: A Client Account within your JISA used solely for money destined for eventual investment in one or more of the Funds offered by Cofunds. Child: A Child under 18 years old who does not have a Child Trust Fund; and at the point of opening the Account is resident and ordinarily resident in the UK, or is a UK Crown Servant, married to or in a civil partnership with a Crown Servant, or a dependent of a Crown Servant. Client Account: A bank account held by us with the Bank, which is only used to hold client money. Cofunds Cash Account (Cash Account): An interest paying Client Account. Cofunds Client Reference: The number assigned to the account we hold in your name to record investments in the JISA. Commission: A sum paid to an Adviser by a Fund Manager for arranging investments in Funds that they manage. This is usually paid by Cofunds as agent for the Fund Manager as a percentage of the transaction amount. It comprises both Initial Commission (taken at point of purchase) and Trail Commission - which is an annual percentage paid to the Adviser for each year the Adviser s client holds their investment in the Fund Manager s Fund. Commission-included Share Class: A Fund share class where the Fund Manager pays Commission from its fund management charges to Advisers. Current Year Subscriptions: Assets representing your subscriptions made to the JISA in the current Year. Dealing Cut-off Time: The time by which an instruction needs to be processed in order to be placed at the next Valuation Pricing Time. FSA: The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS. Fund(s): An authorised unit trust, recognised scheme or open-ended investment company (or sub-fund thereof ) we specify as available for investment within your Account. Implicit Pricing Model: A Pricing Model where you pay Cofunds, your Nominated Intermediary s commission and Fund Manager charges as part of the purchase price of Commission-included Share Class Funds. Income: All payments received as income including any tax payments we reclaim for your Account. Intermediary: A person authorised by the FSA to conduct investment business who is registered to act for Self-directed investors but does not provide financial advice on their transactions. ISA Manager: Cofunds Limited, acting in its capacity as manager of your JISA. ISA Regulations: The parts of the Individual Savings Account Regulation 1998, as amended, supplemented and modified from time to time, that relate to Junior ISAs. Junior Individual Savings Account (JISA): A Junior Individual Savings Account for an eligible Child, which is managed under the ISA Regulations. Monies: Any money held within the Client Account. Nominated Intermediary: An Intermediary nominated by you, who is authorised by you to give instructions on your behalf on all matters concerning your Account. You may or may not have consulted with this Intermediary for advice and may deal with them on an execution only basis. Nominee: A wholly owned subsidiary of Cofunds Limited which acts as a nominee company and for which we accept full responsibility. Ombudsman: The Financial Ombudsman Service who may be contacted at South Quay Plaza, 183 Marsh Wall, London E14 9SR. Re-registration: This means transferring your Funds within your JISA onto or off Cofunds, without selling them in the process. Cofunds Junior Investment ISA (Cofunds JISA): The Cofunds Junior Investment ISA, which is a stocks and shares JISA. Terms and Conditions of the Cofunds JISA 3

5 Registered Contact: The person who will give instructions to Cofunds for the management of the account. This is either a person with parental responsibility for the Child, or the Child themselves if they are aged between 16 and 18 and have applied to manage the account in place of the person with parental responsibility. There can be only one Registered Contact for an account at any time. Registered Office: Cofunds Limited, 1st Floor, 1 Minster Court, Mincing Lane, London EC3R 7AA. Regular Savings: A service offered by Cofunds that enables you to set up regular monthly investments into funds via the Regular Savings Facility (RSF) for the JISA. Self-directed: This means the Service Type that applies to you if you carry out transactions on Cofunds without receiving financial advice. Your Intermediary will provide you with this service where you choose to make your own investment decisions using the information and support services provided by your Intermediary. Your Intermediary will carry out your instructions through the Cofunds platform. You accept responsibility for ensuring the investment is suitable for you. Your Intermediary may charge you a fee for the services they provide and may also receive a commission paid out of your product charges. Service Type: (also sometimes called Advice Type online or on forms). This references the distinction between whether you are accessing Advised or Self-directed services on Cofunds. Your Adviser or Intermediary will have assigned you to the Advised or Self-directed Service Type as appropriate to your circumstances. Share Class: A classification given to stocks and mutual funds. Each class has different characteristics. Terms: These Terms and Conditions (as from time to time amended) together with your Application. The Terms and Conditions will take precedence if the two differ. Units: Units or shares of any class in a Fund, including any fractions or decimals of units. Valuation Pricing Time: On a Business Day, the time set by the Fund Manager when the Fund is valued and the price of units set. We, us and our: Cofunds Limited ( Cofunds ). Year: A year beginning on 6 April and ending on the following 5 April. This is commonly known as the tax year. You and your: The Registered Contact to the Account, being an individual with parental responsibility investing and providing instructions on behalf of the beneficial owner, or the Child (beneficial owner) if aged 16 or over who has elected to be the Registered Contact. In this agreement, unless otherwise stated or the context requires otherwise, where words have been defined in the singular, the same definition shall be applied to the plural, and vice versa. Terms and Conditions of the Cofunds JISA These Terms and Conditions set out the legal agreement that applies to your JISA investment through the Cofunds Platform. 1 Our Role 1.1 General Cofunds provides facilities for investing in Funds from a range of different providers and for keeping track of your investment. You can use Cofunds to invest in Commission-included Share Classes through the Cofunds JISA and can make additional investments and switch funds. A Child can only hold one stocks and shares JISA and one cash JISA up to their 18th birthday. Cofunds only offer the stocks and shares JISA. You must ensure that investments to both types of account do not exceed the annual subscription limit for that Year. By accepting your investment in the JISA, we agree to act as ISA Manager for your Account. We make all necessary claims for tax relief relating to your Account and the Assets held in it. Cofunds complements the service provided by your Nominated Intermediary, who is responsible for all advice and financial planning services that you require. Cofunds does not review your portfolio and does not give advice about investments. All transactions through Cofunds on your investments are arranged through your Nominated Intermediary. Normally, you will not be able to withdraw any investments or close the account - but you may switch funds, and if desired, transfer the JISA to another ISA manager. 1.2 Address Correspondence about our service should be sent to the Administration Address: Cofunds Limited, PO Box 1103, Chelmsford CM99 2XY. 1.3 Information required by Cofunds You must give us all information which we reasonably request to manage your Account and tell us promptly if the permanent residential address of the Child or Registered Contact, or your Nominated Intermediary has changed. 1.4 Regulation We are authorised and regulated by the FSA for investment business. Our FSA registration number is and you can check this on the FSA website at or by contacting the FSA on Terms and Conditions of the Cofunds JISA

6 1.5 ISA Regulations Your JISA will be managed in accordance with the ISA Regulations. 1.6 Client Classification We classify you as a retail client under FSA rules. This means you will receive the highest level of regulatory protection available under those rules as amended from time to time. 2 Opening an Account with Cofunds 2.1 JISA Applications All Applications must be made in writing. Your Cofunds JISA Account is opened when we accept your correctly completed JISA Application and payment. You need to be assigned to our Terms and Conditions of the Cofunds Platform (Self-directed Implicit Pricing Model) before you can apply for a JISA. Your application will be rejected if your choice of funds is unclear or unavailable within this product. Your JISA Application covers the current Year and each subsequent Year until the Child reaches 18 years of age following which the account will become an adult ISA. Subscriptions Subscriptions by direct debit or cheque can be made by any person. A subscriber does not need to be resident in the UK. Eligible subscribers will include the Child, Registered Contact, other family members of the Child or other third parties. While a third party may subscribe to the Account, they will have no authority over the Funds in which the Monies are invested. All payments, including third party payments, should accompany a completed investment instruction and be sent to Cofunds via the Registered Contact. All subscriptions will be deemed to be a gift to the child and cannot be repaid or refunded to the subscriber at any time. Payments should be in sterling, drawn on a UK bank account and made payable to Cofunds Limited. For building society cheques, the name of the Child must appear on the front of the cheque (e.g. Cofunds Limited: A.B Smith) or on the back accompanied by the building society s official stamp and signature. Selecting a monthly direct debit within the funding option of the form and completing the direct debit instruction authorises us to collect regular payments until we are notified to the contrary by the payer. If you pay a subscription to your JISA by a cheque that fails to clear or a direct debit that is subsequently reversed, that subscription will be treated as if it had never been made for the purposes of these Terms and the ISA Regulations. To ensure that the subscription is processed in the current tax Year, your application must be received at Cofunds no less than five Business Days before the end of the tax Year. Applications made in the Year that the Child is 18 must be received by Cofunds no less than five Business Days before the 18th birthday. On receipt of an instruction from the account holder of the investment, we will sell the investment funds and apply the proceeds as a subscription into your JISA. New Commission-included funds will then be purchased within your JISA. As we do not know prices in advance we use an estimation process in order to determine how many Units to sell in order to raise the amount of money required. Depending on market movement this will result in either a slight over or under sale of Units. In the event of an oversell of Units, we will pay the proceeds to the Cash Account of the Investment Funds holding, if advised on the application form to do so. If no instruction is received we will reinvest the proceeds into the highest monetary value fund in the Investment Funds holding. All sell proceeds will be held by Cofunds and will normally be reinvested into your JISA one Business Day from when Cofunds initiate the transaction. 2.3 Tax status You may not open the JISA Account whilst the Child is not resident and ordinarily resident in the UK for tax purposes unless they qualify as a Crown employee (a person holding public office or employment under the Crown and paid out of the public revenue of the UK or of Northern Ireland), their spouse, civil partner or dependant of a Crown Servant. If after opening the Account the Child becomes non-resident you may continue to make investments and switch funds. 2.4 Account type For an investment held under these Terms, all stocks and shares JISA investments will be designated Cofunds Junior Investment ISA. Cofunds does not offer a cash JISA. 2.5 Registered Contact There can only be one Registered Contact at any time. The first Registered Contact will be the person making the Application to open the JISA provided they are aged over 16. They will either have parental responsibility for the Child, or be the Child. Cofunds reserves the right to request proof that the applicant has parental responsibility for the Child. A JISA cannot be operated under a Power of Attorney for the registered contact. The Registered Contact will remain in place until a replacement is appointed. In the meantime any subscriptions by direct debit will continue to be collected until we receive instructions from the payer for them to stop. Where we become aware that the Registered Contact no longer has parental responsibility for the Child, no further instructions will be taken from this person or their Nominated Intermediary and any subscriptions by direct debit will cease. An application to replace the Registered Contact must be in writing by completing the Change in Registered Contact Form which will normally require the consent of the existing Registered Contact. The Registered Contact will need to be replaced (without their consent) in the following circumstances: death or incapacity, they cannot be contacted, Court order or Court appointment, adoption order. The Change in Registered Contact Form should still be completed and evidence provided. 2.2 Investment Funds to JISA applications Other investments on the Cofunds platform in the name of the Registered Contact or other party can be sold and the proceeds used to subscribe to a JISA. Terms and Conditions of the Cofunds JISA 5

7 As part of their application the replacement Registered Contact must appoint a Nominated Intermediary. This could be the Nominated Intermediary already set up on the Account or you may choose to appoint a replacement. If the Registered Contact does not nominate a new Intermediary the existing Intermediary relationship for the account will continue. Refer to section 6 for further information. 2.6 Aged Existing Accounts: At aged 16, provided the Child does not suffer from a mental incapacity, they can apply to be the Registered Contact of their Account by completing the Change in Registered Contact Form. The agreement of the existing Registered Contact is not required. On assuming this responsibility the Child will manage the Account in place of the previous Registered Contact who will cease to be entitled to information concerning the Account. New Accounts: An eligible Child aged 16 to 18 may apply to open a Cofunds JISA in their own right provided they do not already hold a stocks and shares JISA or a Child Trust Fund. Authorities: Under the ISA Regulations, for the purpose of opening and operating a JISA, the signature of the Child aged 16 to 18 (as beneficial owner or Registered Contact ) has effect as if they were 18 years or over. In the Year leading up to their 18th birthday the Child will be entitled to subscribe the full JISA allowance for that Year. In order to ensure that all outstanding JISA transactions are completed before the Child turns 18 any new applications, subscriptions, fund switches or transfer instructions must be received no less than five business days before the 18th birthday. 2.7 Aged 18 At age 18, any existing direct debit payments will cease and the Cofunds JISA will convert to the Cofunds Investment ISA and remain in a taxefficient wrapper. At this point the Cofunds JISA Terms and Conditions will no longer apply and the Child will have the right to withdraw their investments. We will contact the Child shortly before their 18th birthday to inform them of their options. ISA subscriptions are subject to the Terms and Conditions of the Cofunds Platform (Self-directed Implicit Pricing Model) unless otherwise advised by your adviser/intermediary. No further subscriptions (lump sum or direct debit) can be made until the Child has made an ISA application for that Year. 2.8 Timing These Terms will take effect if Cofunds accepts your Application, which normally takes place on the day of receipt. Cofunds has discretion to reject an Application where any part of the investment instruction is ambiguous or filled out incorrectly. In the case of a JISA transfer, the date of transfer is the date agreed between both ISA Managers. 2.9 Initial investment Your initial investment(s) will be made in accordance with your Application. Please see section 8.3 of these Terms for further details of how money is invested. We will also set up any arrangements for Regular Savings that you request in your Application. 3 Cash Reserve The Cash Reserve provides a temporary shelter for your Investment in limited circumstances including the closure or suspension of a fund or situation where cash is inadvertently held. The facility cannot be used as an investment choice. If cash held in the Cash Reserve is not invested in a reasonable period of time, HMRC may require Cofunds to return it to you, which means you could lose all or a proportion of your JISA allowance and associated tax benefits. 4 Void Accounts We will notify you if, by reason of any failure to satisfy the provisions of the Regulations, your Cofunds JISA has or will lose its tax-efficient status. If your Cofunds JISA is voided, we will sell the investments and, after deducting any cash available to cover any tax we have to pay or repay, pay the proceeds together with any remaining cash balance held in your JISA. The Monies can only be paid to the Child. Monies cannot be paid to the Registered Contract (if different from the Child) or to whoever funded the investment at the outset. Any interest accrued in the Cash Reserve will not be payable. 5 Cofunds Client Accounts 5.1 Client Money Accounts We deposit all Monies that we hold for you in one or more Client Accounts that we maintain specifically for you or for our clients generally. We do not currently pay interest on Monies held in the Client Accounts that we maintain for our clients generally, but we reserve the right to do so in the future. We keep all Monies that we hold in a Client Account separate from our own money and hold it under trust with the Bank. 5.2 Interest Gross interest may be paid on the Cash Reserve every six months. The rate of interest payable will fluctuate in line with the Bank of England s base rate, which is published in newspapers and at If interest earned in any accrual period is less than 10, no interest will be credited to your Cash Reserve. Details of Cofunds current interest rates can be found at: Cofunds will receive interest from the Bank with which each Client Account is held and will be entitled to retain that interest. Details are available on request by writing to Cofunds at our Administration Address. 5.3 Taxation No income tax or capital gains tax arises in respect of the Junior ISA. Any UK dividend income is received after the deduction of 10% tax at source, there is however no additional tax to pay on dividends. There is no need to declare any gains or income received in the Junior ISA to HMRC and any income generated from parental subscriptions does not count towards the parent s income under the settlements legislation contained in section 629 ITTOIA When the Junior ISA plan value is paid out to the child at the age of 18, the lump sum is free of any tax charge. Current tax laws and HMRC rules are subject to change in the future and may reduce the tax benefits of your Stocks and Shares Junior ISA. Your individual tax treatment will depend on your circumstances and you should seek advice where necessary. 6 Terms and Conditions of the Cofunds JISA

8 5.4 Deposit protection Cofunds maintains its Client Accounts with a range of selected leading banking institutions. For more information on the Banks currently selected by Cofunds, please contact your Nominated Intermediary or visit the Cofunds website at If one of those Banks fails or becomes insolvent you may not be able to recover all the Monies deposited in the Client Account(s) that we maintain for you. However, you may be entitled to claim compensation under the Financial Services Compensation Scheme on up to 85,000. The level of compensation will be reduced if you already hold an account with the Bank. 6 Your Nominated Intermediary 6.1 Role of your Nominated Intermediary As part of your Application to set up an Account with Cofunds, you appoint an Intermediary as your Nominated Intermediary with authority to deal with Cofunds on your behalf. In order to use the facilities of Cofunds, you need to appoint a Nominated Intermediary to represent you. 6.2 Reliance on your Nominated Intermediary We are entitled to rely on the accuracy of and act on any instruction or information given to us by your Nominated Intermediary on your behalf, or which we reasonably believe has been given in this way. You allow us to give your Nominated Intermediary information about you and your Account from time to time. If a circumstance arises where you cease to be represented by a Nominated Intermediary, we will continue to accept instructions from you until a new Intermediary is appointed. 6.3 Appointing a new Nominated Intermediary You may at any time inform us in writing to stop accepting instructions from your current Nominated Intermediary and appoint a new Nominated Intermediary in their place. Your instruction will take effect once we have received and processed it at our Administration Address. Your letter must include your Cofunds Client Reference or, failing that, clear details to identify yourself and your Account with Cofunds. If you wish to replace your Nominated Intermediary for any reason, Cofunds can provide you with details of alternative Intermediaries, but does not make any representation as to the suitability or appropriateness of any Intermediary or subsequent advice. 7 Custody of Investments 7.1 Safe custody We are responsible for the safe custody of all Assets held in your Account. We register investments in the name of our Nominee, which is a wholly owned subsidiary of Cofunds Limited and has the same registered office address. Our principal Nominee is Cofunds Nominees Ltd. We may use other nominee companies as Nominee for certain customers. If this affects you we will provide you with details of the alternative nominee company that we are using. We are responsible for the acts and omissions of our Nominee. Our Nominee is not itself an authorised person under the Financial Services and Markets Act 2000; it can only hold investments and does not carry on business in its own right. We register your investments in the same name as those of other Cofunds investors and do not identify each investor s holdings by separate certificates. This means that in the event of an irreconcilable shortfall following the default of Cofunds, you will share the shortfall proportionally with our other investors. All documents evidencing title to investments in your Account are held by us or as we direct. We cannot lend any of your investments to a third party and we cannot use them as security for borrowing. 7.2 Beneficial ownership The Child is the beneficial owner of the Assets in the Account. Investments made in the JISA will be held on behalf of the beneficial owner and cannot be used as security for a loan, any assignment of, or agreement to assign, investments in a JISA, and any charge or agreement to charge the investments in a JISA has no standing in law and is ineffective. All subscriptions by any party will be deemed to be a gift to the Child and cannot be repaid or refunded to the subscriber at any time. You may not sell any investments until the beneficial owner is 18 except where regulations permit. 8 Dealing in investments through Cofunds 8.1 Reviewing and/or changing your investments At any time when you wish to make an additional investment into your Account, or switch existing investments between Funds, or change the existing arrangements that apply to your Account, you should instruct your Nominated Intermediary who will make the necessary arrangement with Cofunds. 8.2 Regular Savings You can give instructions at any time to start regular monthly investments into your JISA, or to change an existing arrangement for Regular Savings. Regular Savings into the JISA will take place by the Regular Savings Facility (RSF). Regular Savings into the JISA can be made from any UK bank account however only one Direct Debit can be in place at a time. Where Regular Savings are being made by a third party, we require a signed Direct Debit instruction from the bank account holder to commence collecting payments. For Regular Savings applications for the JISA received up to the last day in the month, the first Direct Debit collection will be made on or just after the 25th calendar day of the following month. The Direct Debits will be taken on the 25th calendar day of each month from then onwards. However, if you want to start your Regular Savings from a later month than this you can advise us accordingly. Amendments to Regular Savings for JISAs can only be made by the bank account holder and must be received by Cofunds five business days before the 25th calendar day of the month, if you wish them to take effect that month. Terms and Conditions of the Cofunds JISA 7

9 Any Regular Savings Facility will cease on the Child reaching 18 years of age. Subscriptions may commence in the ISA subject to the Child agreeing to the Terms and Conditions of the Cofunds Platform by making an ISA application for that Year. 8.3 How money is invested When you instruct Cofunds to buy, switch or convert investments in the Account, Cofunds will place a corresponding deal with the Fund Manager of the relevant Fund(s) once we have received payment. Units in your chosen Funds are bought or switched directly through the Fund Manager through a process of aggregating orders (adding up all individual purchase instructions and all individual sale instructions to come up with a total purchase or sale with that Fund Manager). The Fund Manager sets Unit prices at a specific Valuation Pricing Time each Business Day (although some funds are priced weekly). Fund managers price Units and shares after the sale and purchase orders of the day have been received and the Funds have been revalued (forward pricing), so you will not know in advance what price you will receive. To be able to buy at the price set at the Valuation Pricing Time, orders and payment must be received by Cofunds by a specified Dealing Cut-off Time. Valuation Pricing Times and Dealing Cut-off Times can vary from Fund to Fund. Please see the Fund Key Features documents for details. Each individual deal is usually processed in full and aggregated for the first Valuation Pricing Time following receipt of your instruction and payment (see (a) below), and all deals for that Valuation Pricing Time are met by the Fund Manager. We will not split deals between Valuation Pricing Times (splitting could mean you receive two different prices for parts of the same order or, in an aggregated deal, some investors could get one price and others, another price), except in exceptional circumstances dictated by the Fund, for example, if the Fund is suspended. In these cases we ensure our records of your instructions match the Fund Managers records and that your instruction is fairly processed. In all circumstances, we process instructions in the order in which we receive them. It is possible, in theory, for our process of aggregating deals to act to your disadvantage. However, in practice, we always make sure that you are not disadvantaged, and will place you in the position you would have been in if the disadvantageous process had not taken place. (a) It is Cofunds normal business practice to buy Units in Funds at the Valuation Pricing Time following receipt of your instruction and payment. This will normally be the same Business Day, provided the relevant Dealing Cut-off Time is met. However, in some instances, including but not limited to when unusually large numbers of instructions are received, your instruction may be placed on the subsequent Business Day at the next available Valuation Pricing Time. If you make Regular Savings into your Account, each investment will be made at the next available Valuation Pricing Time following receipt by Cofunds of your monthly payment. The same applies to any income payments arising. If you have chosen to invest in income Units rather than accumulation Units in a Fund and subsequently switch your entire holding in that Fund, then any residual income received after that transaction will be reinvested into the Fund in which you have the largest holding in the relevant part of your Account. 8.4 Types of Units Income Units income Units/shares which pay distributions of income to the holder from the fund. Accumulation Units Units/shares which automatically reinvest all income back into the underlying Fund. If you do not specify whether you want income or accumulation Units, Cofunds will invest in accumulation Units where available, and otherwise will invest in income Units and arrange for any income generated to be reinvested back into the Fund. If you request accumulation Units and these are not available, Cofunds will purchase income Units and arrange for any income generated to be reinvested into the Fund. If you request income Units but income Units are not available, Cofunds will purchase accumulation Units. All income must remain in the JISA and cannot be paid to your bank account. 8.5 Transfer of investments onto the platform You may transfer an existing cash and/or stocks and shares JISA held with another ISA manager provided you wish to transfer to a stocks and shares JISA by completing the Transfer Application Form. If you transfer an existing stocks and shares JISA on a like for like basis, we will request the Fund Manager to register your investment with Cofunds with the same split between Group 1 and Group 2 Units that applied to your previous holding. This avoids an unnecessary change in your tax position arising as a result of the transfer onto the Platform. 8.6 Dealing errors If a Fund Manager error occurs in relation to a transaction that we carry out for you (for example, the Fund Manager calculates the Unit price incorrectly), we will amend our records to reflect the correct position as soon as practicable. However, we reserve the right to take no action and leave the record as it is if the amount of the adjustment required to your holding is 5 or less in which case this amount will not be processed or kept by Cofunds. 9 Documentation 9.1 Platform confirmation Once your Account has been set up, we will send you a letter confirming your Cofunds Client Reference. 9.2 Information on your Investments You can obtain further information on your investments, such as valuations and illustrations, from your Nominated Intermediary. 9.3 Confirmation notes A confirmation note will be sent to you, and a copy made available to your Nominated Intermediary, on the next Business Day following completion of each investment transaction carried out at your instruction. This will include the essential details of the transaction. For Regular Savings, we will acknowledge receipt of your application or instruction, but will not send confirmation notes each time a regular investment or income reinvestment is made. Instead, details of all transactions will be included within your annual statement and consolidated confirmation note. 8 Terms and Conditions of the Cofunds JISA

10 9.4 Statements At least annually we will send you an Account statement showing details of all Assets within your Account on the statement date and all transactions made since the previous statement date, including Investment and interest Income. A copy will be made available to your Intermediary. Valuations are based on the bid price as at the date shown on your statement. 9.5 Records You may inspect copies of confirmation notes, vouchers and entries on our books or electronic media relating to transactions on your Account. We keep these records for at least six years. 10 Transferring out of Cofunds 10.1 JISA transfers out Upon your instructions, and in the time specified by you, Cofunds will transfer your entire JISA, with all your rights and obligations under it, to a stocks and shares and/or cash JISA with an ISA Manager. The ISA Manager must agree to accept the transfer provided this does not lead you to having more than one stocks and shares JISA and one cash ISA. You must transfer your Cofunds JISA in full and not in part. If you wish to transfer your Cofunds JISA to another JISA, you need to make a formal request through your new ISA Manager. Your Cofunds JISA can be transferred in cash, or re-registered, please speak to your new plan manager for more information. Where a JISA is transferred in cash, we will sell all Assets and deduct any amounts due to us. If we subsequently receive any Income arising from Investments transferred out, these will be reinvested into the previously held fund. As a result of the transfer to your new ISA manager we will send any amount reinvested over 25 to your new account, provided they accept it. Any amount less than 25 will be paid out to you. These Terms continue to apply until the transfer is complete, all outstanding transactions have been settled and all liabilities met. 11 Withdrawals and closing your account 11.1 Requesting a withdrawal The ISA Regulations do not allow you to withdraw or close the Account until the Child is aged 18, or in the event of their death or terminal illness. At age 18: Requests to withdraw can only be made by the Child via their Nominated Intermediary. We can only release proceeds of a deal on receipt of their original signature. Proceeds will normally be sent out by cheque or by bank transfer within five Business Days of the Valuation Pricing Time of the last Fund sold. Payment will be delayed if a Fund Manager has not sent settlement proceeds to us, if we have not received an original signature, or if anti-money laundering and bank verification checks have not been completed successfully. Cheque withdrawal timings are subject to postal delivery. If they have requested the withdrawal be paid to the Child s Bank Account, it may take up to eight Business Days to reach the Child s account. Death: Please refer to section 12. Terminal illness: The registered contact may make a claim to HM Revenue & Customs to withdraw all or part of the investments held in the Account. HMRC will assess the request and will instruct us accordingly Withdrawals and closing payments Where a withdrawal is permitted we may deduct from any amount to be paid to you any outstanding fees, charges and expenses due from you. In addition, we may keep an amount which we reasonably estimate will be enough for us to meet any tax liability for which we must account to HM Revenue & Customs for you under the ISA Regulations or otherwise. We will hold any Monies awaiting payment to you outside your Account in a Client Account. We may delay paying any sale proceeds and cash balances until we know that all Payments made by you have cleared and we have received all amounts which you owe to us. Cofunds will not make payments to a third party account except another FSA regulated firm. You agree that upon closure of your Account, any payment subsequently received by us or due to you from us of 1 or less will not be retained by Cofunds for its own accounts Good discharge Where permitted, we will be entitled to pay any amounts owing to you under or in connection with these Terms to you or to your Nominated Intermediary for the time being. Any such payment will be a good discharge of our obligation to pay the relevant amount. Where a process error has a consequential impact on corrections to adviser fees and/or Cofunds Platform charges of 1 or less, we will take no further action. 12 Death of relevant parties Registered Contact: On the death of a Registered Contact who has parental responsibility, a replacement will need to be appointed. The JISA will continue but no instructions can be accepted until we receive the original or a certified copy of the death certificate together with a completed Change of Registered Contact Form appointing a replacement. Child: On the death of the beneficial owner the JISA will cease to be tax exempt and will be closed. Where the Child is under 16, or aged and not the Registered Contact we will continue to hold the Assets until we receive the original or a certified copy of the death certificate, together with instructions from the Registered Contact, upon whom these terms become binding. Where the Child is aged and is the Registered Contact (in accordance with section 2.6) we will continue to hold the Assets until we receive the original death certificate, together with a statutory declaration completed by the next of kin. Where income units are held we will continue to reinvest the income arising to purchase further units. Any tax reclaimed on income distributions paid between the date of death and notification of death will be deducted by us. 13 Fees, Charges and Expenses 13.1 Our remuneration We do not charge you a fee for investing through us in the Cofunds JISA. The only additional charges for this product are those described in section 11.2 and 14.1 of these Terms. We do however receive fees from Fund Managers for administration services provided to Fund Managers connected with your investments. If you require details of these fees, please write to us at our Administration Address. Terms and Conditions of the Cofunds JISA 9

11 13.2 Fund Manager The manager of each Fund in your Account may receive an initial charge. An annual management charge and other fees, charges or expenses properly payable to them may be paid out of the property of that Fund Payments to your Nominated Intermediary Commissions payable to your Nominated Intermediary will be disclosed to you on the confirmation note sent to you after each transaction, other than Regular Savings, where these will be shown on your statement. We do not allow adviser fees (instead of adviser commission) to be taken from the JISA Switch fees and unit conversion We will allow you to switch between Commission-included Share Class Funds within your Account. You will pay a switching charge of 0.25% of the value of the switch. Commission on switches may be paid if agreed with your Nominated Intermediary. The maximum switching charge or commission will not exceed the Fund s standard initial charge. Unit conversion: where available, Fund managers offer the facility to convert accumulation Units to income Units, or vice versa within the same Fund. No commission is paid on Unit conversion. Should you wish to exercise this facility, there is no charge for Unit conversion. When making a decision to convert to income Units you should take into account that the income will be reinvested to purchase further units and cannot be paid to your bank account. Please note, purchases of a Fund using money from the JISA Cash Reserve are treated as a switch and the usual 0.25% switching charge applies. Please see section 3 of these Terms & Conditions and the JISA Key Features for more details on the Cash Reserve. 14 Reports and Accounts and Voting 14.1 Reports, notices, meetings and voting For any Fund held in your Account, you can view copies of reports and accounts by downloading them free of charge from If you wish to receive paper copies, please speak to your Nominated Intermediary. Additionally, at your request in writing, we can arrange for you to receive a copy of the annual report and accounts for each Fund in which you are invested together with any other information the Fund Manager may issue to unit holders. We do not exercise voting rights for any of your Investments unless you request us to vote on your behalf as part of your Application. If you have requested this, you will be notified of each voting event. You also have the right to attend unit holder meetings. Each request will incur a 20 charge per Fund to cover our administration costs. The charge may be deducted from Monies in your Account. You can write to us at Cofunds Limited, PO Box 1103, Chelmsford CM99 2XY. Other notices will be sent to you either directly or with your statements. 15 Variation, Termination and Amendment of Terms 15.1 Funds offered by Cofunds Cofunds reserves the right to make new funds available in this product or to withdraw existing Funds. Where a Fund in which you have invested is withdrawn, you will remain invested in it but will be unable to make further investments to that Fund Suspended or closed Funds If a Fund is suspended by the Fund Manager, Cofunds may hold or reject instructions to deal until the suspension is lifted. If you hold income Units in a suspended fund any income will be paid into Cash Reserve in the interim. If a Fund Manager decides to close one of your funds the cash will be paid into Cash Reserve until you make an alternative fund choice Changes to these Terms We may introduce changes to our services and to these Terms from time to time. We will give you at least 30 days advance notice of any change, except where the change does not disadvantage you or is required in order to comply with a legal or regulatory requirement. If you are not happy with a change, you can contact your Intermediary or write to our Administration Address for a more detailed explanation of the change. If you are still unhappy with the change you can close your Account by transferring it to another ISA Manager Termination Cofunds may terminate this Agreement at any time by giving you a minimum of three months notice. You may also terminate this Agreement by writing to the Cofunds Administration Address. Prior to termination, we will contact you to arrange for the JISA to be transferred to an alternative ISA Manager. 16 Liability 16.1 Loss caused to Cofunds You will be responsible for any liability or loss suffered or incurred by Cofunds or our Nominee (including taxes for which you are primarily liable and any expenses reasonably and properly incurred) as a result of you deliberately breaching these Terms or providing untrue or inaccurate information to Cofunds in connection with your Account. This clause will not apply if and to the extent that any liability or loss arises from any negligence, wilful default, fraud or breach of duty on the part of Cofunds or our Nominee Circumstances beyond our control Cofunds will not be responsible for any loss that you suffer as a result of events or circumstances which are beyond the reasonable control of Cofunds. Examples of when these circumstances apply could be when the loss occurred as a result of a flood or earthquake. 10 Terms and Conditions of the Cofunds JISA

12 17 General 17.1 Delegation We may appoint one or more third parties to assist us in providing our services under this Agreement and will satisfy ourselves that they are competent to carry out these services. Cofunds Limited will remain personally responsible at all time for the proper performance of those services Data Protection All personal data relating to you that we hold for the purpose of providing services under this Agreement is held in accordance with the requirements of data protection legislation. Cofunds Limited will use your information for the administration and servicing of your investments and other related activities. We may disclose your information to our agents and service providers for these purposes. We may disclose information concerning you and your Account to your Nominated Intermediary. We may also disclose your information to third parties where required in order to comply with legal and regulatory requirements. With the exception of the preceding provisions, we will not pass on your information to any other third party without your permission. Cofunds may transfer your information to countries outside of the EEA for the servicing of your investments. In such cases, contracts will be put in place to ensure that the service providers protect your information in accordance with the requirements of data protection legislation Notices Except as otherwise provided, notices to Cofunds should be sent to us at our Administration Address. Notices to you will be sent to your last known address and may be copied to your Nominated Intermediary. 18 Governing law These Terms and Conditions are governed by and are to be construed in accordance with English law. The information contained in these Terms and the Application is based on our understanding of current legislation and HM Revenue & Customs practice and could be affected by changes in legislation and practice. If there is any conflict between these Terms and Conditions and the ISA Regulations or other legislation relating to your Account, the ISA Regulations and/or other legislation will prevail. Terms and Conditions of the Cofunds JISA 11

13 Self-Directed Implicit Pricing Model Key Features of the Cofunds Junior Investment ISA This document relates to the Cofunds Junior Investment ISA. This is the only product available on the Cofunds platform for a person under the age of 18. Important Note: A Child Trust Fund cannot be transferred to a Cofunds Junior ISA (and vice versa). Version JISA1212 Issued by Cofunds Limited, 1st Floor, 1 Minster Court, Mincing Lane, London EC3R 7AA. Registered in England and Wales No Authorised and regulated by the Financial Services Authority (FSA) under FSA Registration No JCO289SDB 12/12 12 Key Features of the Cofunds Junior Investment ISA

14 This document provides you with information about the Cofunds Junior Investment Individual Savings Account. This is a stocks and shares Junior Individual Savings Account (JISA) that can be used to hold Commission-included Share Class funds available on the Cofunds platform in a tax-efficient way. The Financial Services Authority is the independent financial services regulator. It requires Cofunds to give you this important information to help you to decide if investing through the Cofunds Junior Investment ISA is right for you. This document is important as it governs your rights as an investor. You should read it carefully so that you understand what you are buying, and then keep it safe for future reference. If you are unsure about any of the information provided, or have any questions, please speak to your intermediary who will be able to help you. Its aims: The Cofunds Junior Investment ISA (Cofunds JISA) aims to provide capital growth over the medium to long-term and you can invest in the wide range of funds available on the Cofunds platform. Your commitment: The Cofunds JISA is a stocks and shares account. To open the account you must have parental responsibility for an eligible child, or be the child provided you are aged 16 or 17 and wish to operate the account yourself. You must invest into one or more funds within the Cofunds JISA up to the current maximum JISA allowance (see What s the maximum I can invest? in the Questions and Answers section). Once the account has been opened, the account will remain in place until the child is 18. During this time you may not hold another stocks and shares JISA with another provider but may also hold a cash JISA with another provider if you wish. You ll also have the right to transfer either account to another ISA Manager at any time. Risks: When you use the Cofunds JISA your main risk is that the value of the funds in which you have invested may go down in value. For risks specific to each fund, please see the relevant Fund Key Features. The tax treatment of JISAs may change so that investing in funds through the Cofunds JISA is no longer a tax-efficient option. Charges: Cofunds does not charge you for holding your JISA wrapper on the Cofunds platform. However, some charges may apply please see the Cofunds Platform Key Information Document for more information. Also, refer to the Fund Key Features Document for fund charges that may apply. Key Features of the Cofunds Junior Investment ISA 13

15 Questions and Answers Your investment Q. What s a JISA? A type of Individual Savings Account for children that s managed by a Registered Contact. There are two types of account: stocks and shares; and cash. You may open both types of account provided you do not hold more than one of each type. Cofunds only offers a stocks and shares JISA. Q. Can I open a Cofunds JISA? To invest in the Cofunds JISA the child needs to: be under the age of 18 have been born on or after 3 January 2011 or not hold a Child Trust Fund account be resident and ordinarily resident in the UK for tax purposes, unless you are currently a Crown employee, their spouse, civil partner or dependent be signed up to our Terms and Conditions of the Cofunds Platform (Self-directed Implicit Pricing Model). Q. Can a JISA be held jointly? No, a JISA is for an individual who is under the age of 18 it cannot be held jointly. Q. Who s name will the JISA be in? The account will be in the name of the child, who remains the beneficial owner. However the person with parental responsibility for the child, known as the Registered Contact, will be responsible for administering the account until the child becomes 18, or if the child applies to operate the account once they are 16. Q. What happens when the child turns 16? We will contact the child to advise that they have the option to take control of the JISA by becoming the Registered Contact. In addition, a child turning 16 can apply to open a JISA, if they do not already hold one, and act as the Registered Contact. Q. What happens to the child s JISA when they turn 18? Q. Does Cofunds offer a cash JISA? No, although you can take out a cash JISA with another provider, provided that you don t invest over 3,600 between both your cash and stocks and shares JISAs in any one tax year. Q. What are Commission-included funds? A fund share class where the relevant fund manager pays an initial and/or ongoing trail commission to your intermediary. Q. What s the minimum I can invest? Lump sum: 500 per fund Further top-ups: 50 Regular investments: 25 per fund a month Q. What s the maximum I can invest? There are strict limits on how much you can invest in a JISA each tax year (6 April to 5 April the next year). For the tax year 2012/2013 the annual allowance is 3,600. From the tax year 2013/2014 this will increase annually in line with the Consumer Prices Index (CPI). Q. Who can subscribe to make payments? Any person can make subscriptions to the child s JISA by direct debit or cheque. A subscriber does not need to be resident in the UK but the payment must be in sterling drawn on a UK bank account. All subscriptions will be deemed to be a gift to the child and cannot be repaid or refunded to the subscriber at any time. Q. How can I use my JISA allowance in the current tax year? You can invest the whole of your annual JISA allowance in a stocks and shares JISA, such as the Cofunds JISA Alternatively, you can invest a proportion of your allowance in a cash JISA (Cofunds does not offer a cash JISA). Prior to turning 18 we will contact the child to advise that their JISA will be rolled-over to an Individual Savings Account (ISA) and explain the formalities that need to be completed. Upon reaching 18, we will automatically roll the JISA over into an ISA. 14 Key Features of the Cofunds Junior Investment ISA

16 Questions and Answers Transferring JISAs Q. Can I transfer an existing JISA into a Cofunds JISA? Yes, you can transfer existing stocks and shares and/or cash JISAs held with another provider into the Cofunds JISA. Cofunds does not make a direct charge to you for JISA transfers. 1. Transferring JISAs Stocks and shares JISA If you have set up a stocks and shares JISA with another provider and then decide you would prefer to hold it with Cofunds, you must transfer the full amount, as you can only have one stocks and shares JISA. The amount already subscribed in the current tax year will continue to be treated as part of your current tax year JISA allowance. Cash JISA You can transfer a cash JISA to the Cofunds JISA. However, it will be converted into a stocks and shares JISA. Again, the amount already subscribed in the current tax year will continue be treated as part of your current tax year JISA allowance. Q. How do I transfer my existing JISA to Cofunds? Please be aware that: You may lose out on income or investment growth while your money is not invested during the transfer period Initial charges may apply when new funds are purchased through the Cofunds JISA You will not be able to make further investment decisions until the transfer has been completed Your existing ISA manager may charge an exit fee. Please check with them or a financial intermediary regarding the costs of transferring a JISA. Q. Can I transfer to another provider? You can transfer your Cofunds JISA to another ISA manager. To do this, Cofunds requires a completed Transfer Authority Form from your new ISA manager. You can transfer a stocks and shares JISA into another stocks and shares or cash JISA. Your Cofunds JISA can be transferred in cash, or re-registered, please speak to your new plan manager for more information. You may lose opportunities for investment growth through this process. You will not have access to your JISA until the transfer is complete. JISA transfers can take place by re-registering funds or as cash. Re-registration of funds: If you wish to keep the same choice of funds when you transfer your JISA, it may be possible for you to re-register them. This means that the funds will simply be moved to sit within your new Cofunds JISA. To do this the funds will need to be available on the Cofunds platform and your existing ISA manager must support fund re-registration. Your money will remain fully invested in the funds and no initial charges will apply. Cash transfers: If the existing ISA manager doesn t support fund re-registration or you want to have a different choice of funds, the funds you currently hold in your JISA will be sold. The cash proceeds will then be transferred directly to Cofunds to purchase the funds of your choice. A cash transfer requires your investments to be sold then reinvested. Key Features of the Cofunds Junior Investment ISA 15

17 Managing your JISA Tax treatment Q. Can I take money out of my JISA? No, you cannot withdraw or close the account until the child is aged 18. However, in the unfortunate event of their death or terminal illness the funds can be withdrawn irrespective to the child s age. Q. Do I need to complete an application for my existing Cofunds JISA every new tax year? No, your existing JISA will continue to be invested until you provide Cofunds with instructions otherwise. Q. What is the tax treatment of JISAs? No income tax or capital gains tax arises in respect of the Junior ISA. Any UK dividend income is received after the deduction of 10% tax at source, there is however no additional tax to pay on dividends. There is no need to declare any gains or income received in the Junior ISA to HMRC and any income generated from parental subscriptions does not count towards the parent s income under the settlements legislation contained in section 629 ITTOIA When the Junior ISA plan value is paid out to the child at the age of 18, the lump sum is free of any tax charge. If the child dies then the money in the Junior ISA will form part of the named child s estate and may be liable for Inheritance Tax. Current tax laws and HMRC rules are subject to change in the future and may reduce the tax benefits of your Stocks and Shares Junior ISA. Your individual tax treatment will depend on your circumstances and you should seek advice where necessary. 16 Key Features of the Cofunds Junior Investment ISA

18 Questions and Answers Changing your mind Q. What happens if I change my mind about setting up a JISA? If you wish to cancel your JISA, you must inform Cofunds in writing within 14 days of receipt of your confirmation notice. Please send your cancellation request to: Cofunds, PO Box 1103, Chelmsford CM99 2XY. Provided you cancel within the 14-day period, the monies will be paid to you subject to the conditions below and your JISA allowance will be unaffected. Please note: If the value of your chosen investment falls between the date your subscription was invested and the date Cofunds receives your instruction to cancel, you may not receive a full refund of the amount you have invested. Q. How can I complain? If you have a complaint about our JISA product, please send a letter to Head of Customer Experience at Cofunds, PO Box 1103, Chelmsford CM99 2XY. If you are eligible, we will let you know when you can refer your complaint to the Financial Ombudsman service and how to do so. Q. Can I get compensation from the Financial Services Compensation Scheme? If you meet the eligibility criteria of the Financial Services Compensation Scheme you will be able to seek compensation from the Financial Services Compensation Scheme for up to 50,000 should we become unable to meet our liabilities to you. See this factsheet for more information: If the value of your investment rises between these two dates, you will only receive back the amount invested. Please note that monies will only be paid back to the beneficiary and not the subscriber. Before sending you your money, Cofunds may need to carry out additional security checks and ensure all payments have been cleared, which may delay payment to you. Withdrawing after 14 days You will not be able to cancel your JISA following the 14-day period of receipt of your initial subscription. Cancelling a JISA transfer The 14-day period also applies to JISA transfer requests. Provided you cancel within the 14-day period, you will be given the option of transferring the JISA back to your previous ISA manager or to an alternative ISA manager. Key Features of the Cofunds Junior Investment ISA 17

19 FundChoice and Garrison Investment Analysis Limited use the services of Cofunds Limited (Cofunds) - the UK s leading independent investment platform. Cofunds Limited, 1st Floor, 1 Minster Court, Mincing Lane, London, EC3R 7AA. Registered in England and Wales No Authorised and regulated by the Financial Services Authority (FSA) under FSA Registration No Garrison Investment Analysis Limited is a wholly owned subsidiary of Charles Stanley Group PLC and is registered in England No Registered Office: 25 Luke Street, London, EC2A 4AR. Authorised and regulated by the Financial Services Authority (FSA). FSA Register No , see register/home.do for registration details. FundChoice is a registered trading name of Garrison Investment Analysis Ltd.