General Scheme of the. Irish Collective Asset-management Vehicle. Bill 2014

Transcription

1 General Scheme of the Irish Collective Asset-management Vehicle Bill 2014 Part 1 Preliminary and General 1. Citation 2. Commencement 3. Interpretation 4. Limitation of liability 5. UCITS incorporated as ICAVs Part 2 Incorporation, Registration and Authorisation Chapter 1 Incorporation and Consequential Matters 6. Registration of ICAVs 7. Registration by the Central Bank 8. Applications for authorisation 9. Particulars to be delivered with instrument of incorporation 10. Authorisation 11. Effect of granting authorisation 1

2 12. Requirements for authorisation 12A Requirement for ICAV to have a registered office Chapter 2 Powers of the Central Bank 13. Powers of the Central Bank 14. Representations against refusal of authorisation 15. Certificates 16. Ending of authorisation 17. Bank to give reasons for decisions, etc 18. Filings to be made in Bank Chapter 3 ICAV Name 19. Approval of names by Registrar of Companies 20. Prohibition of registration of ICAVs by undesirable names 21. Bank's notification to Registrar of Companies of ICAV names 22. The Central Bank s approval for certain changes in respect of an ICAV Chapter 4 Common Seal and Execution of Documents 23. Execution of documents 24. Common seal 2

3 25. Official seal for share certificates Chapter 5 Segregated Liability / Umbrella funds 26. Segregated liability of ICAV sub-funds 27. Requirements to be complied with by, and other matters respecting, an umbrella fund to which section 26 applies Part 3 Depositary 28. Safekeeping of ICAV property 29. Shareholder rights of action not affected Part 4 Share Capital, Shares and certain other Instruments 30. Share Capital of ICAV 31. Power of the ICAV to purchase own shares 32. Treatment of Purchased Shares 33. Power to Issue Shares 34. Share certificates 35. Evidence of Share Certificate 36. Exceptions from Section General 38. Transfer of registered shares 3

4 39. Refusal to Register Transfer 40. Certification of a Transfer of Shares 41. Miscellaneous Part 5 Corporate Governance Chapter 1 Directors and Secretaries 42. Number of Directors 43. Secretary 44. Prohibition of body corporate being a director. 45. Avoidance of acts done by person in dual capacity as director and secretary. 46. Validity of acts of directors. 47. Appointment of directors to be voted on individually. 48. Removal of directors. 49. Prohibition of undischarged bankrupt acting as company officer etc of an ICAV. 50. Further provision regarding prohibition of undischarged bankrupt acting as company officer etc. of an ICAV. 51. Register of directors and secretaries. 52. Particulars relating to directors to be shown on all business letters of the ICAV. 53. Provisions as to assignment of office by directors. Chapter 2 Service Contracts 4

5 54. Prohibition of tax free payments to directors 55. ICAV may have directors with unlimited liability. 56. Power of ICAV to make liability of directors unlimited Chapter 3 Proceedings of Directors 57. Minutes of proceedings of meetings of company and directors Chapter 4 Members 58. Member 59. Register of Members 60. Index of members 61. Consequences of failure to comply with requirements as to register owing to agent s default 62. Rectification of register 63. Trusts not to be entered on the register 64. Register as evidence Chapter [5] General Meetings 65. General meetings 5

6 Chapter [6] Protection for Minority 66. Shareholder rights Part 6 Duties of Directors and Other Officers 67. Placeholder 68. Approval of ICAV necessary for payment by it to director for loss of office. 69. Approval of ICAV necessary for payment to director of compensation with transfer of property. 70. Duty of director to disclose to ICAV payments to be made to him in connection with transfer of shares in an ICAV. 71. Provisions supplementary to Sections Avoidance of provisions exempting officers and auditors of ICAV from liability. 73. Register of directors shareholdings. 74. General duty to make disclosure for the purposes of sections 73 and Duty of director to disclose his interest in contracts made by the ICAV. 76. Transactions Involving Directors: Interpretation 77. Connected persons 78. Shadows Directors 79. Prohibition of loans, etc. to directors and connected persons. 80. Civil Remedies for breaches of Section Contracts of employment of directors. 6

7 81A Directors to have regard to interests of employees. Part 7 Financial Statements Chapter 1 Accounting and Records 82. Keeping of Books of Account 83. Liability of officers of an ICAV to penalty where proper books of account not kept. 84. Personal liability of officers of an ICAV where proper books of account not kept 85. Duty of auditors if proper books of account not being kept Chapter 2 Statutory Financial Statements 86. Preparation of Annual Accounts Chapter 3 Directors Report (Chapter 9) 87. Directors' report to be attached to balance sheet and contents of such report. 88. Information to be included in directors' report. Chapter 4 Obligation to have accounts audited (Chapter 10) and Statutory Auditor s Report (Chapter 11) 7

8 89. Auditor Reports on Accounts 90. Consideration by auditors of consistency of directors' report with ICAV s accounts. 91. Duty of Auditors re suspected commission of an indictable offence 92. Auditors Chapter 5 Miscellaneous 93. Particulars of directors salaries and payments to be given in accounts. 94. Sub-fund accounts 95. Reports: voluntary revision Part 8 Charges and Debentures 96. Charges and Debentures Part 9 Reorganisation, Acquisition, Merger and Division 97. Schemes of Arrangement, Mergers, Divisions and other Reorganisations Part 10 Conversion and Migration 98. Conversions 8

9 99. Migration and De-Registration Part 11 Receivership 100. Receivership Part 12 Winding-up 101. Winding up Part 13 Strike-off and Restoration 102. Placeholder Part 14 Enforcement 103. Prosecution of Offences 104. Powers and Duties of the ODCE Part 15 Miscellaneous 105. Amendments to UCITS Regulations 106. Amendments to Central Bank Act 9

10 107. Tax Treatment Applicable to an ICAV 10

11 The provisions in these heads are based primarily on appropriate precedents from Irish company law and other legislation. Head 1 Citation This Act may be cited as [ ] Explanatory Note General citation provision. 11

12 Head 2 Commencement This Act comes into operation on [ ] Explanatory Note The commencement date will determine date legislation comes into effect. 12

13 Head 3 Interpretation Bank means the Central Bank of Ireland; Debenture includes debenture stock, bonds, debt securities, and any other form of transferable securitised debt securities of an ICAV whether constituting a charge on the assets of the ICAV or not, with the exception of securities which are equivalent to shares in companies or which, if converted or if the rights conferred by them are exercised, give rise to a right to acquire shares or securities equivalent to shares; dormant means in respect of any period during which no significant transaction occurs; ICAV means an Irish Collective Asset-management Vehicle; instrument of incorporation means [ ] management company means a company designated by an ICAV to undertake the management of the ICAV; Minister means the Minister for Finance; Principal Companies Act means the Companies Act 1963, as amended property means real or personal property of whatever kind (including securities); sub-fund means a separate portfolio of assets maintained by an ICAV in accordance with its instrument of incorporation; UCITS Regulations means the European Communities (Undertakings for Investment in Transferable Securities) Regulations 2011 (SI 352 of 2011) as amended; umbrella fund means an ICAV which has one or more sub-funds and which is authorised 13

14 by the Central Bank pursuant to section 10 of this Act. Explanatory Note This head sets out the defined terms used in the draft legislation. 14

15 Head 4 Limitation of liability (1) Any two or more persons, associated for any lawful purpose may, by subscribing their names to an instrument of incorporation and otherwise complying with the requirements of this Act relating to registration, form an incorporated ICAV, with limited liability. (2) Such an ICAV shall have the liability of its members limited by the instrument of incorporation to the amount, if any, unpaid on the shares respectively held by them (in this Act termed an ICAV limited by shares. Explanatory Note This heads reflects provisions in the Companies Acts. 15

16 Head 5 UCITS incorporated as ICAVs For the avoidance of doubt, UCITS may be constituted as ICAVs. Explanatory Note This head clarifies that UCITS may be established through the ICAV vehicle. 16

17 Head 6 Registration of ICAVs (1) An ICAV shall not carry on business in the State unless it has been registered as an ICAV in the Central Bank. (2) An application by an ICAV for the registration referred to in subsection (1) shall be made in writing to the Central Bank and contain such information as the Minister may prescribe in regulations made under this Act. (3) An ICAV shall not carry on business in the State unless it has been authorised to do so by the Central Bank on the basis of criteria approved by the Minister. (4) The Central Bank shall not authorise an ICAV to carry on business in the State unless the ICAV has paid up share capital which, in the opinion of the Central Bank will be sufficient to enable it to conduct its business effectively and meet its liabilities. (5) An application by an ICAV for the authorisation referred to in subsection (3) shall be made in writing to the Central Bank and contain such information as the Central Bank may specify for the purpose of determining the application (including such additional information as the Central Bank may specify in the course of determining the application). (6) The name of an ICAV is the name mentioned in the authorisation order made in respect of the ICAV or, if it changes its name in accordance with this Act and Bank rules, its new name. 1. (7) A person shall not carry on business on behalf of an ICAV, insofar as relates to the purchase or sale of the shares of the ICAV, unless the ICAV has been authorised in the manner referred to in this section this section. (8) An ICAV or other company incorporated outside the State which, if it were incorporated in the State, would be an ICAV to which this Act applies, shall not advertise or market its shares in any way in the State without the approval of the Central Bank, which approval may be subject to such conditions as the Central Bank considers appropriate and prudent for the purposes of the orderly and proper regulation of so much of the business of ICAVs or companies of that type as is conducted in the State Explanatory Note 17

18 Subsection (1) provides that an ICAV cannot carry on business in Ireland unless properly registered and authorised under the Act. Subsection (2) provides for a dual registration / authorisation regime under which the ICAV is registered and authorised by the Central Bank. Subsections (3) and (4) prohibit unauthorised investment companies. Subsection (6) will prevent the carrying out of delegated acts on behalf of an ICAV unless the ICAV is properly authorised. Subsection (7) will prevent the marketing into Ireland of investment funds organised as corporate entities unless such marketing is done in accordance with Central Bank requirements. 18

19 Head 7 Registration by the Central Bank (1) Upon making an authorisation order by the Central Bank under section 10, the Central Bank must forthwith register: (a) the instrument of incorporation of the ICAV; (b) a statement of the address of the ICAV s head office; (c) a statement, with respect to each person named in the application for authorisation as director of the ICAV, of the particulars set out in section 9; and (d) a statement of the corporate name and registered or principal office of the person named in the application for authorisation as the depositary of the ICAV. (2) In this section any reference to the instrument of incorporation of an ICAV is a reference to the instrument of incorporation supplied for the purposes of section 10(1)(c). Explanatory Note This head sets out the documents to be registered by the Central Bank when the Central Bank makes an authorisation order. 19

20 Head 8 Applications for authorisation (1) Any application for an authorisation order in respect of a proposed ICAV (a) must be made in such manner as the Minister may prescribe in regulations made under this Act or in such manner as the Central Bank may direct; (b) must state with respect to each person proposed in the application as a director of the ICAV the particulars set out in section 9; (c) must state the corporate name and registered or principal office of the person proposed in the application as depositary of the ICAV; and (d) must contain or be accompanied by such other information as the Central Bank may reasonably require for the purpose of determining the application. (2) At any time after receiving an application and before determining it the Central Bank may require the applicant to furnish additional information. (3) Different directions may be given and different requirements imposed in relation to different applications. (4) Any information to be furnished to the Central Bank under this section must be in such form or verified in such manner as it may specify. (5) A person commits an offence if: (a) for the purposes of or in connection with any application under this section; or (b) in purported compliance with any requirement imposed on him by or under this section; 20

21 (c) he furnishes information which he knows to be false or misleading in a material particular or recklessly furnishes information which is false or misleading in a material particular. (6) A person guilty of an offence under subsection (5) is liable (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both; (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both. Explanatory Note This head provides that the manner of the application for authorisation should be set out in regulations made by the Minister under the Act, or in notices issued by the Central Bank. The application must provide details of the proposed directors of the ICAV, the proposed depositary of the ICAV and such other information as the Central Bank may require in order to decide upon the application for authorisation. The Central Bank may request additional information at any time after receipt of the application and before it is determined. The head permits the Central Bank to impose different requirements in respect of different applications. The Central Bank may specify the form of the information to be provided to it, or the manner in which it should be verified. The head also provides that the provision of false or misleading information in an application for authorisation shall be an offence and sets out the penalties applicable to that offence. 21

22 Head 9 Particulars to be delivered with instrument of incorporation (1) Subject to sections 6 and 7, there shall be delivered to the Central Bank together with every instrument of incorporation of an ICAV delivered to it pursuant to section 7 of this Act a statement in the prescribed form containing the name and the particulars specified in subsection (2) of this section in relation to- (2) (a) the persons who are to be the first directors of the ICAV, (b) (c) the person who is, or the persons who are, to be the first secretary or joint secretaries of the ICAV, and the situation of the ICAV's registered office. (3) The particulars referred to in subsection (1) of this section are- (a) in relation to a person named as director of the ICAV concerned, all particulars which are, in relation to a director, required pursuant to section 51(2) to be contained in the register kept under that section, (b) (c) in relation to a person named as secretary, or as one of the joint secretaries, all particulars which are, in relation to the secretary or to each joint secretary, required pursuant to section 51(4) to be contained in the register kept under that section, and in relation to the registered office of the ICAV, the particulars which are required to be given to the Central Bank pursuant to [ ]. (3) The statement required to be delivered pursuant to this section shall be signed by or on behalf of the subscribers and shall be accompanied by a consent signed by each of the persons named in it as a director, secretary or joint secretary to act in that capacity. (4) Where the instrument of incorporation is delivered to the Central Bank pursuant to section 7 of this Act by a person as agent for the subscribers to the instrument of incorporation the statement required to be delivered to the Central Bank r pursuant to this section shall so specify and shall specify the name and address of the person by whom the instrument of incorporation is delivered. (5) The persons who are specified in the statement required to be delivered to the Central Bank pursuant to this section as the directors, secretary or joint secretaries of the ICAV to which the statement refers shall, on the incorporation of the ICAV, be deemed to have been appointed as the first directors, secretary or joint secretaries, as the case may be, of the ICAV, and any indication in any instrument of incorporation 22

23 delivered to the Central Bank with the instrument of incorporation specifying a person as a director or secretary of an ICAV shall be void unless such person is specified as a director or as secretary in the said statement. (6) If any of the persons named in the statement to be delivered pursuant to this section as directors of the ICAV concerned is a person who is disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking, that person shall ensure that that statement is accompanied by (but as a separate document from that statement) a statement in the prescribed form signed by him specifying- (a) (b) (c) the jurisdiction in which he is so disqualified, the date on which he became so disqualified, and the period for which he is so disqualified. (7) Sub-section (7) is without prejudice to sub-section (3) of this section or the requirements of any other enactment with regard to the registration of [companies]. Explanatory Note This head requires certain details to be sent to the Central Bank when the vehicle is being incorporated. It is only those directors and secretary for whom such information is provided that will be recognised as having been appointed to their respective positions. Should either the director or secretary be disqualified from acting in another state in such a position pursuant to the law of that other state, they must provide details regarding their disqualification at the same time as sending the above information. 23

24 Head 10 Authorisation (1) Where an application is duly made under section 8, the Central Bank may make an authorisation order in respect of an ICAV if: (a) (b) (c) it is satisfied that the ICAV will, on the coming into effect of the authorisation order, comply with the requirements in section 12; it is satisfied that the ICAV will, at that time, comply with the requirements of the Central Bank s notices and guidance notes; it has been provided with a copy of the proposed ICAV s instrument of incorporation and a certificate signed by a solicitor to the effect that the instrument of incorporation complies with Schedule [1] to this Act and with such of the requirements of the Central Bank s notices and guidance notes as relate to the contents of that instrument of incorporation; and (2) If the Central Bank makes an order under subsection (1), it must give written notice of the order to the applicant. (3) Subject to subsection (4), an application must be determined by the Central Bank before the end of the period of six months beginning with the date on which it receives a completed application. (4) Where the application relates to an ICAV which is a UCITS, it must be determined by the Central Bank before the end of two months beginning with the date on which it receives the application. (5) The Central Bank may determine an incomplete application if it considers it appropriate to do so and, if it does so, it must determine the application within the period of twelve months beginning with the date on which it first receives the application. (6) The applicant may withdraw his application, by giving the Central Bank written notice, at any time before the Central Bank determines it. (7) An authorisation order must specify the date on which it is to come into effect. (8) Schedule [1] to this Act makes provision with respect to the contents of the instrument of incorporation of an ICAV. Explanatory Note This head sets out the conditions under which the Central Bank will make an authorisation 24

25 order, and adds detail to the requirements referred to in section 8. The Central Bank will make the authorisation order where it is satisfied that the ICAV will comply with the requirements in section 12 and with the Central Bank s notices and guidance notes. The Central Bank must also be provided with a copy of the ICAV s instrument of incorporation and solicitor s certificate to the effect that the instrument of incorporation complies with the requirements of the Act and the Central Bank s notices and guidance notes. The Central Bank must give written notice to the applicant of the making of the authorisation order. The head provides that the application for authorisation must be decided upon by the Central Bank within six months of the date of receipt of the application. Where the application relates to an ICAV which is established as a UCITS, a shorter period of two months will apply. The Central Bank may also determine an incomplete application if it chooses to do so. Where it chooses to do so, it must determine the application with twelve months of the date of receipt of the application. An applicant may withdraw the application for authorisation at any time before the application is determined by the Central Bank by giving notice in writing to the Central Bank. The authorisation order will specify the date upon which it comes into effect. 25

26 Head 11 Effect of granting authorisation Immediately upon the coming into effect of an authorisation order, the body to which the authorisation order relates is incorporated as an ICAV (notwithstanding that, at the point of its incorporation by virtue of Section 10, the body will not have any shareholders or property). Such a body will be capable of exercising all of the functions of an ICAV with perpetual succession (common seal optional) but with such liability on the part of the members to the assets of the ICAV, in the event of its being wound up, as is mentioned in the Act. Explanatory Note This head provides that an authorised ICAV may carry out its functions notwithstanding the fact that it is newly incorporated. 26

27 Head 12 Requirements for authorisation (1) The requirements referred to in section 10(1)(a) are as follows. (2) The ICAV and its instrument of incorporation must comply with the requirements of this Act and the Central Bank s notices and guidance notes. (3) The head office of the ICAV must be situated in Ireland. (4) The ICAV must have at least two directors. (5) The directors of the ICAV must be fit and proper persons to act as such. (6) If the ICAV has more than two directors, the combination of their experience and expertise must be such as is appropriate for the purposes of carrying on the business of the ICAV. (7) The person appointed as the depositary of the ICAV. must be a body corporate incorporated in the Ireland or another EEA State; (a) must have a place of business in Ireland; (b) must have its affairs administered in the country in which it is incorporated; (c) must be an authorised person; (d) and must have permission under section 28(3) to act as the depositary of an ICAV; 27

28 (e) must be independent of the ICAV and of the persons appointed as directors of the ICAV. (8) The name of the ICAV must not be undesirable or misleading. (9) The aims of the ICAV must be reasonably capable of being achieved. (10) The ICAV must meet one or both of the following requirements: (a) (b) shareholders are entitled to have their shares redeemed or repurchased upon request at a price related to the net value of the scheme property and determined in accordance with the ICAV s instrument of incorporation and Bank notices and guidance notes; or shareholders are entitled to sell their shares on an investment exchange at a price not significantly different from that mentioned in sub-subsection (a). Explanatory Note This head sets out the requirements to be met before an authorisation order will be made by the Central Bank and adds detail to the requirements referred to in section 10. These include that the ICAV and its instrument of incorporation must comply with the Act and with the Central Bank s notices and guidance notes. the head office of the ICAV must be located in Ireland, and the ICAV must have at least 2 directors who are fit and proper person to act as a director. The head also sets out the requirements which apply to the depositary of the ICAV. The name of the ICAV must not be undesirable or misleading, and the aims of the ICAV must be reasonably capable of being achieved. The shareholders of the ICAV must be entitled to redeem their shares on request at a price related to the net value of the scheme property or be entitled their shares on an investment exchange, or both. 28

29 Head 12A Requirement for ICAV to have a registered office Placeholder Explanatory Note Standard text to be applied. 29

30 Head 13 Powers of the Central Bank (1) Notwithstanding any other powers which may be available to the Central Bank under any other enactment, order or regulation, the Central Bank may impose such conditions for the granting of an authorisation to an ICAV under section 10 as it considers appropriate and prudent for the purposes of the orderly and proper regulation of the business of the ICAV. (2) Conditions imposed under subsection (1) may be imposed generally, or by reference to particular classes of ICAV or business (including, but not limited to, whether or not an ICAV is a designated ICAV), or by reference to any other matter the Central Bank considers appropriate and prudent for the purposes of the orderly and proper regulation of the business of the ICAV. (3) The power to impose conditions referred to in subsection (1) shall include a power to impose such further conditions from time to time as the Central Bank considers appropriate and prudent for the purposes of the orderly and proper regulation of the business of ICAV. (4) Without prejudice to the generality of subsections (1), (2) and (3), conditions imposed by the Central Bank on an ICAV may make provision for any or all of the following matters: (a) the prudential requirements of the investment policies of the ICAV, (b) prospectuses and other information disseminated by the ICAV, (c) the vesting of the assets or specified assets of the ICAV in a person nominated by the Central Bank with such of the powers or duties of a trustee with regard to the ICAV as are specified by the Central Bank, 30

31 (d) such other supervisory and reporting requirements and conditions relating to its business as the Central Bank considers appropriate and prudent to impose on the ICAV from time to time for the purposes referred to in the aforesaid subsections, (e) supervisory and reporting requirements and conditions relating to the business of a management ICAV as the Central Bank considers appropriate or prudent to impose on the management ICAV from time to time. (5) A ICAV shall comply with any conditions relating to its authorisation or business imposed by the Central Bank. Explanatory Note Subsection (1) clarifies the powers of the Central Bank with regard to the authorisation of an ICAV, including the ability to impose conditions on any such authorisation. Subsection (2) provides further clarification of powers of the Central Bank to impose conditions which are of general application or specific to certain categories of ICAV. Subsection (3) provides further clarification of powers of the Central Bank to impose conditions which are appropriate and prudent to proper regulation of ICAVs. Subsection (4) deals with specific matters, in respect of which the Central Bank may impose conditions relating to ICAVs, such as investment policies, prospectuses and reporting requirements. 31

32 Head 14 Representations against refusal of authorisation (1) If the Central Bank proposes to refuse an application made under section 8, it must give the applicant a warning notice. (2) If the Central Bank decides to refuse the application: (a) it must give the applicant a decision notice; and (b) the applicant may appeal the decision in accordance with section 17(2). Explanatory Note This head provides that the Central Bank must give the applicant written notice if it proposes to refuse an application for authorisation. If the Central Bank refuses an application, it must give the applicant a decision notice and the applicant may appeal the decision. These provisions allow for an appeal to the Financial Services Appeals Tribunal rather than the High Court. 32

33 Head 15 Certificates (1) If an ICAV which complies with the conditions necessary to enable it to enjoy the rights conferred by [the UCITS directive] so requests, the Central Bank may issue a certificate to the effect that the ICAV complies with those conditions. (2) Such a certificate may be issued on the making of an authorisation order in respect of the ICAV or at any subsequent time. Explanatory Note This head provides that where an ICAV complies with the conditions necessary to enjoy the rights conferred by the UCITS directive, it may request the Central Bank to issue a certificate to the effect that it complies with those conditions. This certificate can be issued upon authorisation or requested by the ICAV at any later date. 33

34 Head 16 Ending of authorisation (1) The Central Bank may revoke an authorisation order if it appears to it that: (a) (b) any requirement for the making of the order is no longer satisfied; the ICAV, any of its directors or its depositary: (c) (i) (ii) has contravened any relevant provision; or has, in purported compliance with any such provision, knowingly or recklessly given the Central Bank information which is false or misleading in a material particular; (d) (e) no regulated activity has been carried on in relation to the ICAV for the previous twelve months; or it is desirable to revoke the authorisation order in order to protect the interests of shareholders or potential shareholders in the ICAV. (2) For the purposes of subsection (1)(d), the Central Bank may take into account any matter relating to (a) (b) (c) (d) (e) (f) (g) the ICAV or its depositary; any director or controller of the depositary; any person employed by or associated, for the purposes of the business of the ICAV, with the ICAV or its depositary; any director of the ICAV; any person exercising influence over any director of the ICAV or its depositary; any body corporate in the same group as any director of the ICAV or its depositary; any director of any such body corporate; 34

35 (h) (i) any person exercising influence over any such body corporate; any person who would be such a person as is mentioned in section 9(3) were it to apply to a director as it applies to a proposed director. (3) Before revoking any authorisation order that has come into effect, the Central Bank must ensure that such steps as are necessary and appropriate to secure the winding up of the ICAV (whether by the court or otherwise) have been taken. Explanatory Note This head sets out the conditions under which the Central Bank may revoke an authorisation order. These conditions include that where the ICAV no longer satisfies any of the requirements for making the order or where the ICAV, one of its directors or its depositary has contravened a relevant provision or provided false or misleading information. Authorisation may also be revoked where the ICAV has not carried out any regulated activity for the previous twelve months. The Central Bank may also revoke an authorisation where it is desirable in order in order to protect the interests of shareholders or potential shareholders in the ICAV. The head sets out the matters which the Central Bank may take into account in reaching this determination. The Central Bank must ensure that such steps as are necessary and appropriate to secure the winding up of the ICAV have been taken before revoking an authorisation order. 35

36 Head 17 Bank to give reasons for decisions, etc (1) The Central Bank shall give reasons in writing for any decision to refuse authorisation, or any negative decision taken in the implementation of the general measures adopted in application of this Act, and communicate them to applicants. (2) Any decision taken under the laws, regulations or administrative provisions adopted in accordance with this Act shall be properly reasoned. The following decisions of the Central Bank are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942: (a) decision refusing an application for authorisation under section 8; (b) a failure to decide an application within the period prescribed by section 10; (c) decision revoking or refusing an application to revoke an authorisation. Explanatory Note This head provides that the Central Bank shall give reasons in writing to the applicant for any decision to refuse authorisation or any negative decision made under the Act. The head sets out the decisions of the Central Bank which may be appealed to the Financial Services Appeals Tribunal established under Part VIIA of the Central Bank Act

37 Head 18 Filings to be made in Bank The ICAV shall make such filings in the Central Bank [as the Minister may provide in regulations made under this Act or] as the Central Bank may provide in notices or guidance notes. Explanatory Note Self Explanatory 37

38 Head 19 Approval of names by Registrar of Companies (1) Where, in respect of a proposed ICAV, it appears to the Central Bank that the requirements of section 20(1)(a) to (c) are or will be met, the Central Bank must notify the Companies Registration Office of the name by which it is proposed that the ICAV should be incorporated. (2) Every ICAV must obtain the Central Bank s approval to any proposed change in the name by which the ICAV is incorporated and the Central Bank must notify the Companies Registration Office of the proposed name. (3) If it appears to the Companies Registration Office that the provisions of section 20(1) are not contravened in relation to the proposed name, it must notify the Central Bank to that effect. Explanatory Note This head provides that the Central Bank must approve any change of name and must notify the Companies Registration Office of any such change of name. 38

39 Head 20 Prohibition of registration of ICAVs by undesirable names No ICAV shall be registered by a name which, in the opinion of the Registrar of Companies, is undesirable but an appeal shall lie to the court against a refusal to register. Explanatory Note The head provides that an ICAV will not register a name which is deemed undesirable by the Companies Registration Office. The ICAV has the option to appeal a decision of the Companies Registration Office that any particular name is deemed undesirable. See comments on previous Head. 39

40 Head 21 Bank's notification to Registrar of Companies of ICAV names Upon making an authorisation order in respect of an ICAV or upon approving any change in the name of such an ICAV, the Central Bank must notify the Registrar of Companies of the name by which the ICAV is incorporated or, as the case may be, of the ICAV s new name. Explanatory Note This head requires the Central Bank to inform the Companies Registration Office of the name any newly authorised ICAV, or of any change in name of an existing authorised ICAV.. 40

41 Head 22 The Central Bank s approval for certain changes in respect of an ICAV (1) No alteration in the instrument of incorporation of an authorised ICAV or change in the name of such scheme shall be made without approval of the Central Bank and any person who makes an alteration or change as aforesaid without such approval shall be guilty of an offence. (2) Within 21 days after the making of an alteration in the instrument of incorporation of an authorised ICAV or a change in the name of such ICAV the ICAV shall deposit with the Central Bank a copy of the instrument of incorporation as so altered or containing the alterations or (as the case may be) particulars of the change in name. (3) Where an ICAV fails to comply with subsection (2), it shall be guilty of an offence. Explanatory Note The head provides that the ICAV must obtain approval for any change in its instrument of incorporation. 41

42 Head 23 Execution of documents (1) The following provisions have effect with respect to the execution of documents by an ICAV. (2) A document is executed by the ICAV by the affixing of its common seal. (3) An ICAV need not have a common seal, however, and the following provisions of this section apply whether it does or not. (4) A document has the same effect as if executed under the common seal of the ICAV if expressed to be executed by the ICAV and if it is signed on behalf of the ICAV (a) by two authorised signatories, or (b) by a director of the ICAV in the presence of a witness who attests the signature. (5) The following are authorised signatories for the purposes of subsection (4): (a) every director of the ICAV; and (b) the secretary (or any joint secretary) of the ICAV. (6) In favour of a purchaser, a document is deemed to have been duly executed by an ICAV if it purports to be signed in accordance with subsection (4). (7) In subsection (6), a purchaser means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property. 42

43 (8) Where a document is to be signed by a person on behalf of more than one ICAV, it is not duly signed by that person for the purposes of this section unless he signs it separately in each capacity. (9) References in this section to a document being (or purporting to be) signed by a director or secretary are to be read, in a case where that office is held by a firm, as references to its being (or purporting to be) signed by an individual authorised by the firm to sign on its behalf. (10) A document is validly executed by an ICAV as a deed for the purposes of section 64(4) of the Land and Conveyancing Law Reform Act 2009 if, and only if, (a) it is duly executed by the ICAV in accordance with subsection (4); and (b) it is delivered as a deed. (11) For the purposes of subsection (10)(b) a document is presumed to be delivered upon its being executed, unless a contrary intention is proved. Explanatory Note This head deals with the execution of documents by an ICAV. The head provides that a document shall be deemed to be validly executed if it is executed under the common seal of the ICAV. However, an ICAV will not be required to have a common seal and a document will be deemed to be validly executed if it is executed by two authorised signatories, or by a director of the ICAV in the presence of a witness who attests the signature. The authorised signatories are defined as the directors of the ICAV or the secretary of the ICAV. The head also provides that a deed shall be validly executed for the purposes of the Land and Conveyancing Law Reform Act 2009 if it is executed in accordance with the head and it is delivered as a deed. 43

44 Head 24 Common seal (1) AN ICAV may have a common seal, but need not have one. (2) AN ICAV which has a common seal shall have its name engraved in legible characters on the seal. (3) An officer of an ICAV, or a person acting on behalf of an ICAV, commits an offence if he uses, or authorises the use of, a seal purporting to be a seal of the ICAV on which its name is not engraved as required by subsection (2). (4) A person guilty of an offence under subsection (3) is liable on summary conviction to a fine not exceeding [ ]. Explanatory Note This head sets out the requirements in relation to the ICAV s common seal, while making it clear that it is not a requirement for an ICAV to have a common seal. 44

45 Head 25 Official seal for share certificates (1) An ICAV which has a common seal may have, for use for sealing shares issued by the ICAV and for sealing documents creating or evidencing shares so issued, an official seal which is a facsimile of its common seal with the addition on its face of the word securities. (2) The official seal when duly affixed to a document has the same effect as the ICAV s common seal Explanatory Note This head provides that an ICAV may have an official seal for the purpose of sealing shares issued by the ICAV or for sealing documents creating or evidencing shares so issued. 45

46 Head 26 Segregated liability of ICAV sub-funds Notwithstanding any statutory provision or rule of law to the contrary, but subject to subsection (2), any liability incurred on behalf of or attributable to any sub-fund of an umbrella fund shall be discharged solely out of the assets of that sub-fund, and no umbrella fund nor any director, receiver, examiner, liquidator, provisional liquidator or other person shall apply, nor be obliged to apply, the assets of any such sub-fund in satisfaction of any liability incurred on behalf of or attributable to any other sub-fund of the same umbrella fund, whether such liability was incurred before, on or after the date this section commences. Explanatory Note This head provides for segregated liability of ICAV sub-funds. Sub-funds are separate portfolios of assets maintained by funds (which are called umbrella funds ). While not regarded as separate legal entities from the umbrella fund, sub-funds will be afforded the benefit of limited liability. Where a sub-fund of the ICAV incurs a liability, that liability may only be discharged out of the assets of that sub-fund and the assets of that sub-fund shall not be applied to discharge a liability incurred by any other sub-fund of the umbrella fund. 46

47 Head 27 Requirements to be complied with by, and other matters respecting, an umbrella fund to which section 26 applies (1) Every umbrella fund to which section 26 applies shall be required to include the words An umbrella fund with segregated liability between sub-funds in all its letterheads and in any agreement entered into in writing with a third party, and shall be obliged to disclose that it is a segregated liability umbrella fund to any third party with which it enters into an oral contract. (2) There shall be implied in every contract, agreement, arrangement or transaction entered into by an umbrella fund to which section 26 applies the following terms, that- (a) the party or parties contracting with the umbrella fund shall not seek, whether in any proceedings or by any other means whatsoever or where-so-ever, to have recourse to any assets of any sub-fund of the umbrella fund in the discharge of all or any part of a liability which was not incurred on behalf of that sub-fund, (b) if any party contracting with the umbrella fund shall succeed by any means whatsoever or where-so-ever in having recourse to any assets of any sub-fund of the umbrella fund in the discharge of all or any part of a liability which was not incurred on behalf of that sub-fund, that party shall be liable to the umbrella fund to pay a sum equal to the value of the benefit thereby obtained by it, and (c) if any party contracting with the umbrella fund shall succeed in seizing or attaching by any means, or otherwise levying execution against, any assets of a sub-fund of an umbrella fund in respect of a liability which was not incurred on behalf of that sub-fund, that party shall hold those assets or the direct or indirect proceeds of the sale of such assets on trust for the umbrella fund and shall keep those assets or proceeds separate and identifiable as such trust property. (3) All sums recovered by an umbrella fund as a result of any such trust as is described in subsection (2)(c) shall be credited against any concurrent liability pursuant to the 47

48 implied term set out in subsection (2)(b). (4) Any asset or sum recovered by an umbrella fund pursuant to the implied term set out in subsection (2)(b) or (c) or by any other means whatsoever or where-so-ever in the events referred to in those subsections shall, after the deduction or payment of any costs of recovery, be applied so as to compensate the sub-fund affected. (5) In the event that assets attributable to a sub-fund to which section 26 applies are taken in execution of a liability not attributable to that sub-fund, and in so far as such assets or compensation in respect thereof cannot otherwise be restored to that sub-fund affected, the directors of the umbrella fund, with the consent of the custodian, shall certify or cause to be certified, the value of the assets lost to the sub-fund affected and transfer or pay from the assets of the sub-fund or sub-funds to which the liability was attributable, in priority to all other claims against such sub-fund or sub-funds, assets or sums sufficient to restore to the sub-fund affected, the value of the assets or sums lost to it. (6) Without prejudice to the other provisions of section 26 and this section, a sub-fund of an umbrella fund is not a legal person separate from that umbrella fund, but an umbrella fund may sue and be sued in respect of a particular sub-fund and may exercise the same rights of set-off, if any, as between its sub-funds as apply at law in respect of companies and the property of a sub-fund is subject to orders of the court as it would have been if the sub-fund were a separate legal person. (7) Nothing in section 26 and this section shall prevent the application of any enactment or rule of law which would require the application of the assets of any sub-fund in discharge of some or all of the liabilities of any other sub-fund on the grounds of fraud or misrepresentation and, in particular, by reason of the application of - (a) section [ ]; and (b) section [ ]. (8) A sub-fund may be wound up in accordance with the provisions of sections [ ] and [ ] as if the sub-fund were a separate ICAV, provided always that the appointment of the liquidator or any provisional liquidator and the powers, rights, duties and responsibilities of the liquidator or any provisional liquidator shall be confined to the sub-fund or sub-funds which is or are being wound up. (9) For the purposes of subsection (8), all references made in sections [ ] and [ ]and all relevant provisions of this Act relating to the winding up of an ICAV pursuant to sections [ ] and [ ] to one of the following words shall be construed as follows- 48

49 (a) ICAV shall be read as referring to the sub-fund or sub-funds which is or are being wound up; (b) a member or members shall be read as referring to the holders of the shares in that sub-fund or sub-funds; and (c) creditors shall be read as referring to the creditors of that sub-fund or subfunds. Explanatory Note This head provides that an ICAV must disclose on its letterhead and any agreement it enters into that it has segregated liability between sub-funds. This has been included to provide a certain level of investor protection. The head also sets out certain implied terms that will be part of any contract the ICAV enters into including an implied trust where a party contracting with the umbrella fund succeeds in seizing or attaching, or otherwise levying execution against, any assets of a sub-fund of an umbrella fund in respect of a liability which was not incurred on behalf of that sub-fund. The head provides that a sub-fund of an umbrella fund is not a legal person separate from the umbrella fund, but an umbrella fund may sue and be sued in respect of a particular sub-fund. 49

50 Head 28 Safekeeping of ICAV property (1) Subject to subsection (2), all the assets or specified assets of an ICAV must be entrusted for safekeeping to a person appointed for the purpose (a Depositary ). (2) Nothing in subsection (1) prevents a Depositary from: (a) entrusting to a third party all or some of the assets in its safekeeping; or (b) in a case falling within sub-subsection (a), authorising the third party to entrust all or some of those assets to other specified persons. (3) The Central Bank may impose such conditions as to eligibility, powers, duties and liabilities of the depositary of an ICAV as it may consider appropriate and prudent from time to time. Explanatory Note This provision sets out the requirement that the assets of the ICAV must be held by an appointed depositary (also known as a custodian or trustee). This relationship is heavily regulated by the relevant European Directives and Irish funds law. 50

51 Head 29 Shareholder rights of action not affected Nothing in this Act shall limit the rights of shareholders (if any) to take proceedings directly against the Depositary as specified in [the UCITS regulations and [AIFMD] as implemented into Irish law]. Explanatory Note This provision clarifies that the fact that an ICAV, which is the entity which has the legal relationship with the depositary, is a separate legal personality does not mean that shareholders will not have a right to take action against the depositary directly where those rights are provided for under other legislation. 51

52 Head 30 Share Capital of ICAV (1) The instrument of incorporation of an ICAV may in respect of the share capital of the ICAV state (2) (a) (b) (c) that the share capital of the ICAV shall be equal to the value for the time being of the issued share capital of the ICAV; the division of that share capital into a specified number of shares without assigning any nominal value thereto; and that the issued share capital of the ICAV for the time being shall not be less than a minimum amount nor more than a maximum amount specified in the instrument of incorporation. (2) In respect of the instrument of incorporation of the ICAV: (a) the sole object as stated in the instrument of incorporation shall be the collective investment of its funds in property and giving members of the ICAV the benefit of the results of the management of its funds; and (b) the instrument of incorporation shall provide: (i) that the actual value of the paid up share capital of the ICAV shall be at all times equal to the value of the assets of any kind of the ICAV after the deduction of its liabilities, and: (ii) that the shares of the ICAV shall, at the request of any of the holders thereof, be purchased by the ICAV directly or indirectly out of the ICAV s assets. (3) For the purposes of subsection (2)(b)(ii), action taken by an ICAV to ensure that the stock exchange value of its shares does not deviate from its net asset value by more than a percentage specified in its articles (which deviation shall not be so specified as greater than 5 per cent) shall be regarded as the equivalent of purchase of its shares by the ICAV. 52

53 (4) The instrument of incorporation of an ICAV shall be regarded as providing for the matters referred to in subsections 2(a) and 2(b) notwithstanding the inclusion in the instrument of incorporation with respect thereto of incidental or supplementary provisions. Explanatory Note This head sets out the key requirements in relation to the share capital of the ICAV, which are to be reflected in its instrument of incorporation. - Based on Section 253(1) of Part XIII of the 1990 Act. Subsection 1(a) equates the share capital with the issues share capital of an ICAV, and is necessary to facilitate the manner in which investment funds permit investments and withdrawals. Subsection 1(b) is required to enable the ICAV value its shares based on the value of the assets which it holds. Subsection 1(c) requires that the ICAV manage the number of shares which it issues within certain minimum and maximum limits. Subsection 2(a) sets out the rationale and objective of an ICAV shall be collective investment for the benefit of the ICAV s shareholders. Subsection 2(b)(i) provides that the value of the share capital will equate to the net value of the ICAV s assets. Subsection 2(b)(ii) enables the ICAV to repurchase its own shares in order to enable investors to withdraw invested funds. 53

54 Head 31 Power of the ICAV to purchase own shares (1) Subject to subsection (2), the purchase by an ICAV of its own shares shall be on such terms and in such manner as may be provided by its instrument of incorporation and in accordance with the prospectus of the ICAV and with conditions imposed by the Central Bank. (2) An ICAV shall not purchase its own shares, for the purpose referred to in section 30(2)(b)(ii), unless they are fully paid, but nothing in this subsection shall prevent a purchase being made in accordance with section 32(3). (3) For the avoidance of doubt, nothing in this Act shall require an ICAV to create any reserve account. Explanatory Note This provision reflects one of the key components of Part XIII companies. That is the ability to freely purchase their own shares. This is the fundamental mechanism behind investors subscribing in (i.e. investing) and redeeming out of (i.e. liquidating their investment) the ICAV. Subsection (3) - This subsection dispenses with any requirements for the ICAV to have an account with money held in reserve for potential future payments. This is in line with the fundamental nature of an investment company and the continual process of subscription, investment of assets and redemption of shares. 54

55 Head 32 Treatment of Purchased Shares (1) Shares of an ICAV which have been purchased by or transferred to the ICAV shall be cancelled and the amount of the ICAV s issued share capital shall be reduced by the amount of the consideration paid by the ICAV for the purchase of the shares. (2) (a) Where an ICAV has purchased or is about to purchase any of its own shares, it shall have the power to issue an equal number of shares in place of those purchased and for the purposes of section 68 of the Finance Act, 1973, the issue of those replacement shares shall constitute a chargeable transaction if, but only if, the actual value of the shares so issued exceeds the actual value of the shares purchased at the date of their purchase and, where the issue of shares does constitute a chargeable transaction for those purposes, the amount on which stamp duty on the relevant statement relating to that transaction is chargeable under section 69 of the Finance Act, 1973, shall be the difference between: (i) the amount on which the duty would be so chargeable if the shares had not been issued in place of shares purchased under this section, and (ii) the value of the shares purchased at the date of their purchase. (b) Where new shares are issued before the purchase of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of subsection (c) unless the old shares are purchased within one month after the issue of the new shares. (3) Notwithstanding subsection (1), an umbrella fund may, for the account of any of its sub-funds, and in accordance with conditions imposed by the Central Bank, acquire by subscription or transfer for consideration, shares of any class or classes, howsoever described, representing other sub-funds of the same umbrella fund provided that the acquisition is for a purpose otherwise than that provided for in section 30(2)(b)(ii). Explanatory Note 55

56 This provision is a corollary of the process of subscription, investment of assets, and redemption of shares, and the concept of a variable capital company. An ICAV s share capital must always be equal to the net value of the underlying assets in which it has invested. Subsection (3) allows an umbrella fund to acquire shares in sub-funds from the same umbrella fund provided that the acquisition complies with conditions laid down by the Central Bank. 56

57 Head 33 Power to Issue Shares (1) (a) An ICAV is authorised to issue shares and debentures according to its instrument of incorporation, prospectus and the rules of the Central Bank.30(2)(b)(ii). (b) An ICAV is authorised to issue shares as fully paid up, or subscribed and partly paid up, in such manner as may be provided by its instrument of incorporation and in accordance with the prospectus of the ICAV and with conditions imposed by the Central Bank. (c) An ICAV may issue more than one class of shares, and may create more than one sub-fund. The creation of different classes of shares and different sub-funds must be in accordance with the instrument of incorporation of the ICAV, prospectus and the rules of the Central Bank. (2) A shareholder may not have any interest in the scheme property of the ICAV. (3) The rights which attach to each share of any given class are: (a) the right, in accordance with the instrument of incorporation, to participate in or receive profits or income arising from the acquisition, holding, management or disposal of ICAV property; (b) the right, in accordance with the instrument of incorporation, to vote at any general meeting of the ICAV or at any relevant class meeting; and (c) such other rights as may be provided for in the instrument of incorporation of the ICAV in relation to shares of that class, subject to the rules of the Central Bank. 57

58 (4) In respect of any class of shares, the rights referred to in subsection (3) may, if the ICAV s instrument of incorporation so provides, be expressed in one or more denominations. Explanatory Note Subsection 1(a) permits non-subscriber shareholders. Subsection 1(b) permits private equity-type arrangements. Subsection 1(c) expressly recognises the power of an ICAV to create different share classes and sub-funds. Subsection (2) providesthat the ICAV is a separate legal entity and that the shareholders interest are in the ICAV shares and not directly in its underlying assets. Subsection (3)(a) sets out the rights of shareholders in an ICAV, including the right to vote at general meetings and the right to share in the profits of the ICAV. 58

59 Head 34 Share certificates (1) Subject to sections 35 and 36, and subject to the rules of the Central Bank, an ICAV must complete and have ready for delivery documentary evidence of title of all shares, debentures, and certificates of all debenture stock allotted or transferred, as appropriate, ( share certificates ) in accordance with its instrument of incorporation and the Central Bank s rules. (2) The expression transfer for the purpose of this subsection means a transfer duly stamped and otherwise valid, and does not include such a transfer as the ICAV is, for any reason, entitled to refuse to register and does not register. Explanatory Note This head requires the provision documentary evidence of title to shareholders. However, detailed provisions in relation to the requirements for the production of share certificates should be left to the instrument of incorporation. 59

60 Head 35 Evidence of Share Certificate (1) A certificate under the common seal of the ICAV or the seal kept by the ICAV pursuant to section 25 above, specifying any shares held by any member shall be prima facie evidence of the title of the member to the shares. (2) The production to an ICAV of any document which is by law sufficient evidence of probate of the will or letters of administration of the estate of a deceased person having been granted to some person shall be accepted by the ICAV, notwithstanding anything in its instrument of incorporation, as sufficient evidence of the grant. Explanatory Note This head deals with share certificates and reflects current provision on company law. 60

61 Head 36 Exceptions from Section 34 Nothing in section 34 requires an ICAV to prepare share certificates in the following circumstances: (a) Where the ICAV s instrument of incorporation states that share certificates will not be issued and contains provisions for the issue of written confirmations of entry in the register of members. (b) Where a shareholder has indicated to the ICAV in writing that they do not wish to receive a certificate. Explanatory Note This head outlines the exceptions to the requirement to produce a share certificate. For example, in the case where the ICAV s memorandum and articles of association states that share certificates will not be issued, or where a shareholder indicates that they do not wish to receive one. 61

62 Head 37 General The shares or other interest of any member in an ICAV shall be personal estate, transferable in a manner provided by the instrument of incorporation of the ICAV, subject to the terms of this Act or Central Bank rules, and shall not be of the nature of real estate. Explanatory Note This head states the transferable nature of shares, subject to any conditions laid down in the instrument of incorporation of the ICAV. 62

63 Head 38 Transfer of registered shares (1) Subject to subsection (2), and notwithstanding anything in the instrument of incorporation of an ICAV, it shall not be lawful for the ICAV to register a transfer of shares in or debentures of the ICAV unless a proper instrument of transfer has been delivered to the ICAV. (2) Nothing in subsection (1) shall prejudice any power of the ICAV to register as shareholder or debenture holder any person to whom the right to any shares in, or debentures of the ICAV, has been transmitted by operation of law. (3) In this Act, transfer documents, in relation to any transfer of registered shares, means such evidence as is required to prove the right of the transferor to transfer the shares in question as set out under the rules of the Central Bank, the instrument of incorporation of the ICAV, or the prospectus of the ICAV. Explanatory Note Subsection (1) provides that the ICAV must receive formal documentation of a transfer of shares before it can register such transfer.. 63

64 Head 39 Refusal to Register Transfer (1) A ICAV may, before the end of the period of 2 months commencing with the date of receipt of the transfer documents relating to any transfer of shares, refuse to register the transfer if: (a) there exists a minimum requirement as to the number or value of shares that must be held by any shareholder of the ICAV and the transfer would result in either the transferor or transferee holding less than the required minimum; or (b) the transfer would result in a contravention of any provision of the ICAV s instrument of incorporation or would produce a result inconsistent with any provision of the ICAV s prospectus. (2) A ICAV must give the transferee written notice of any refusal to register a transfer of shares. (3) Nothing in this Act requires an ICAV to register a transfer or give notice to any person of a refusal to register a transfer where registering the transfer or giving the notice would result in a contravention of any provision of law (including any law that is for the time being in force in a country or territory outside Ireland). Explanatory Note An ICAV can refuse to register a transfer under the circumstances listed in this section. The shareholder in question will be informed of any decision to refuse to register within 21 days. 64

65 Head 40 Certification of a Transfer of Shares (1) The certification by an ICAV of any instrument of transfer of shares in or debentures of the ICAV shall be taken as a representation by the ICAV to any person acting on the faith of the certification that there have been produced to the ICAV such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures. (2) For the purposes of subsection (1), an instrument shall be deemed to be certificated if: (a) the instrument bears the words certificate lodged (or words to the like effect); and (b) the instrument is signed by a person acting under authority (whether express or implied) given by the ICAV to issue and sign such certifications. (3) For the purposes of subsection (2), a certification shall be deemed to be signed by any person if: (a) it purports to be authenticated by his signature or initials (whether hand written or not), and (b) it is not shown that the signature or initials was or were placed there neither by himself nor by any person authorised to use the signature or initials for the purpose of certificating transfers on the ICAV s behalf. (4) Where any person acts on the faith of a false certification by an ICAV made negligently, the ICAV shall be under the same liability to him as if the certification had been made fraudulently. 65

66 Explanatory Note: This head provides that a person may rely on a certification of a transfer of shares by an ICAV only to the fact that proper documentation has been produced to the ICAV which on the face of it indicates that the transferor has legal title. However, they may not rely on this certification as proof that the transferor actually has legal title. A person may rely on a certification of a transfer of shares by an ICAV only to the fact that proper documentation has been produced to the ICAV which on the face of it indicates that the transferor has legal title. However, they may not rely on this certification as proof that the transferor actually has legal title. 66

67 Head 41 Miscellaneous (1) Nothing in the preceding provisions of this Part prejudices any power of the ICAV to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the ICAV has been transmitted by operation of law. (2) A transfer of registered shares or other interest of a deceased member of an ICAV made by his personal representative shall, although the personal representative is not himself a member of the ICAV, be as valid as if he had been such a member at the time of the execution of the instrument of transfer. (3) On the death of any one of the joint holders of any shares, the survivor is to be the only person recognised by the ICAV as having any title to or any interest in those shares. Explanatory Note: The provision clarifies the position of a personal representative of a deceased shareholder when transferring registered shares of the ICAV. The personal representative will not be deemed to be a member of the ICAV. 67

68 Head 42 Number of Directors Every ICAV shall have at least two directors. Explanatory Note: Self-explanatory. 68

69 Head 43 Secretary (1) Every ICAV shall have a secretary, who may be one of the directors. (2) Anything required or authorised to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to any officer of the ICAV authorised a generally or specially in that behalf by the directors. Explanatory Note: The ICAV s secretary s role will be to ensure that the ICAV s affairs are managed properly and, in particular, to ensure that the various returns and other documentation required by law will be attended to properly. If the office is vacant or if there is no secretary capable of acting, the head provides for a number of other officers of the ICAV to fulfil the function. 69

70 Head 44 Prohibition of body corporate being a director. An ICAV shall not have as director of the ICAV a body corporate. Explanatory Note: This head prohibits a body corporate from being a director of an ICAV. This is a longstanding principle of Irish company law the rationale for which is that the personal responsibility of a director could be evaded by appointing a corporation to act as a director. 70

71 Head 45 Avoidance of acts done by person in dual capacity as director and secretary. A provision requiring or authorising a thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary. Explanatory Note: This provision outlines that where a provision of legislation requires a thing to be done by both a director and secretary, that it will not be deemed to have been done if it is done by the same person acting both as a director and secretary. The main point in support of this provision is that the appointment of a person, both as secretary and director to the ICAV, should not override oversight and execution requirements that might arise under law, for example the signing of the vehicle s annual return. 71

72 Head 46 Validity of acts of directors. The acts of a director shall be valid notwithstanding any defect which may afterwards be discovered in his appointment or qualification. Explanatory Note: The head applies in the case of procedural error in the appointment of a director, rather than where the error concerns substantive provisions relating to the appointment. 72

73 Head 47 Appointment of directors to be voted on individually. (1) At a general meeting of an ICAV, a motion for the appointment of two or more persons as directors of the ICAV by a single resolution shall not be made, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it. (2) Subject to subsections (3) and (4), a resolution moved in contravention of this section shall be void, whether or not its being so moved was objected to at the time. (3) Subsection (2) shall not be taken as excluding the operation of section 46 immediately above (4) Where a resolution moved in contravention of this section is passed, no provision for the automatic re-appointment of retiring directors in default of another appointment shall apply. (5) For the purposes of this section, a motion for approving a person's appointment or for nominating a person for appointment shall be treated as a motion for his appointment. (6) Nothing in this section shall apply to a resolution altering an ICAV's instrument of incorporation. Explanatory Note: This provision ensures that the shareholders are enabled to choose between those proposed that they wish to elect and those that they wish to reject. Therefore This head provides that a resolution for the appointment of two or more persons as directors of an ICAV by a single resolution shall not be made unless all those present at the meeting expressly consent to this approach being taken. 73

74 Head 48 Removal of directors. (1) An ICAV may by ordinary resolution remove a director before the expiration of his period of office notwithstanding anything in its instrument of incorporation or in any agreement between it and him...[so, however, that this subsection shall not, in the case of a private company, authorise the removal of a director holding office for life] (2) Extended notice within the meaning of [ ] shall be required of any resolution to remove a director under this section or to appoint somebody instead of the director so removed at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this section, the ICAV shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the ICAV) shall be entitled to be heard on the resolution at the meeting. (3) Subject to subsection (4), where notice is given of an intended resolution to remove a director under this section and the director concerned makes in relation thereto representations in writing to the ICAV (not exceeding a reasonable length) and requests their notification to the members of the ICAV, the ICAV shall, unless the representations are received by it too late for it to do so, (a) (b) in any notice of the resolution given to members of the ICAV, state the fact of the representations having been made; and send a copy of the representations to every member of the ICAV to whom notice of the meeting is sent (whether before or after receipt of the representations by the ICAV);and if a copy of the representations is not sent as aforesaid because received too late or because of the ICAV's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting. (4) Copies of the representations need not be sent out as aforesaid, and the representations need not be read out at the meeting as aforesaid if, on the application either of the ICAV or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter, and the court may order the ICAV's costs on an application under this section to be paid in whole or in part by the director concerned, notwithstanding that he is not a party to the application. (5) A vacancy created by the removal of a director under this section may be filled at the meeting at which he is removed and, if not so filled, may be filled as a casual 74

75 vacancy. (6) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed director. (7) Nothing in this section shall be taken as depriving a person removed thereunder of compensation or damages payable to him in respect of the determination of his appointment as director or compensation or damages payable to him in respect of the determination of any appointment terminating with that as director or as derogating from any power to remove a director which may exist apart from this section. Explanatory Note: These provisions supersede the ICAV s articles of association and ensure that the members of an ICAV are, in accordance with the procedure in this section, empowered, by ordinary resolution, to remove a director from office. This head also contains a number of safeguards that are designed to ensure that a director who it is proposed to remove will have ample opportunity of putting his case to the shareholders. 75

76 Head 49 Prohibition of undischarged bankrupt acting as company officer etc of an ICAV. (1) Subject to subsection (2), if any person being an undischarged bankrupt acts as officer, auditor, liquidator or examiner of, or directly or indirectly takes part or is concerned in the promotion, formation or management of, any ICAV except with the leave of the court, he shall be guilty of an offence. (2) Where a person is convicted of an offence under subsection (1) he shall be deemed to be subject to a disqualification order from the date of such conviction if he was not, or was not deemed to be, subject to such an order on that date. (3) In this section 'ICAV' includes an ICAV incorporated outside the State which has an established place of business within the State. Explanatory Note: This head provides that an undischarged bankrupt (i.e. someone against whom a bankruptcy order has been made and who has not been discharged from bankruptcy) cannot act as a director and is guilty of an offence if he or she does so. 76

77 Head 50 Further provision regarding prohibition of undischarged bankrupt acting as company officer etc. of an ICAV. (1) Where the Director of Corporate Enforcement has reason to believe that a director of an ICAV is an undischarged bankrupt, the Director may require the director of the ICAV to produce by a specified date a sworn statement of all relevant facts pertaining to the ICAV director s financial position, both within the State and elsewhere, and, in particular, to any matter pertaining to bankruptcy as at a particular date. (2) The court may, on the application of the Director of Corporate Enforcement, require a director of an ICAV who has made a statement under subsection (1) to appear before it and answer on oath any question pertaining to the content of the statement. (3) The court may, on the application of the Director of Corporate Enforcement, make a disqualification order (as defined in [ ]) against a director of an ICAV on the grounds that he is an undischarged bankrupt. (4) A director of an ICAV who fails to comply with a requirement under subsection (1) [shall be guilty of an offence.] Explanatory Note: This head provides a mechanism whereby the Director of Corporate Enforcement/Central Bank (issue of enforcement agency to be further considered) may intervene where he or she suspects that an undischarged bankrupt is acting as a company director. The procedure may culminate in an application to the High Court that the person is disqualified from acting as a director of an ICAV. 77

78 Head 51 Register of directors and secretaries. (1) Every ICAV shall keep at its registered office a register of its directors and secretaries. (2) Subject to subsection (3), the said register shall contain the following particulars relating to each director- (a) (b) (c) (d) (e) (f) his present forename and surname and any former forename and surname; and his date of birth; and his usual residential address; and his nationality; and his business occupation, if any; and particulars of any other directorships of bodies corporate, whether incorporated in the State or elsewhere, held by him or which have been held by him. (3) It shall not be necessary for the said register to contain on any day particulars of any directorship- (a) which has not been held by a director at any time during the ten years preceding that day; (b) which is held or was held by a director in bodies corporate of which the ICAV is or was the wholly owned subsidiary or which are or were the wholly owned subsidiaries either of the ICAV or of another body corporate of which the ICAV is or was the wholly-owned subsidiary; (c) and for the purposes of this subsection a body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members except that other and that other's wholly-owned subsidiaries and its or their nominees. (4) Subject to subsection (5), the said register shall contain the following particulars relating to the secretary or, where there are joint secretaries, in relation to each of them- (a) in the case of an individual, his present forename and surname, any former forename and surname and his usual residential address; and 78

79 (b) in the case of a body corporate, the corporate name and registered office. (5) Where all the partners in a firm are joint secretaries of an ICAV, the name and principal office of the firm may be stated instead of the said particulars. (6) The ICAV shall, within the period of 14 days from the happening of- (a) (b) any change among its directors or in its secretary, or any change in any of the particulars contained in the register, send to the Central Bank a notification in the prescribed form of the change and of the date on which it occurred. (6A) In the case of a person who is a director of more than one ICAV (the relevant ICAVs ) the following provisions apply- (a) (b) the person may send a notification in the prescribed form to the Central Bank of a change in his or her usual residential address or of a change in his or her name and (in each case) of the date on which the change occurred, if such a notification is sent to the Central Bank and the relevant ICAVs are listed in the notification as being ICAVs of which the person is a director- (i) each of the relevant ICAVs shall be relieved, as respects, and only as respects, that particular change or, as the case may be, those particular changes, of the obligation under subsection (6) to send a notification of it or them to the Central Bank, and (ii) the Central Bank may proceed to record the relevant change or changes concerning the person in relation to each of the relevant ICAVs. (7) A notification sent to the Central Bank pursuant to subsection (6) of the appointment of a person as a director, secretary or joint secretary of an ICAV shall be accompanied by a consent signed by that person to act as director, secretary or joint secretary, as the case may be. (8) Without prejudice to subsection (7), if the notification to be sent to the Central Bank pursuant to subsection (6) is a notification of the appointment of a person as a director of an ICAV and that person is a person who is disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking, that person shall ensure that the notification is accompanied by (but as a separate document from the notification) a statement in the prescribed form signed by him specifying- 79

80 (a) (b) (c) the jurisdiction in which he is so disqualified, the date on which he became so disqualified, and the period for which he is so disqualified. (9) Subsection (6) shall not apply to any change in the particulars contained in an ICAV's register of directors and secretaries made solely by reason of the coming into force of [this section] but if after any such change has occurred and before the ICAV makes its next annual return, any other change in those particulars occurs, the ICAV shall send to the Central Bank a notification in the prescribed form of any such earlier changes and the date on which they occurred at the same time as it notifies the Central Bank of the later changes in accordance with this section. (10) The register to be kept under this section shall, during business hours (subject to such reasonable restrictions as the ICAV may by its instrument of incorporation or in general meeting impose, so that not less than 2 hours in each day be allowed for inspection) be open to the inspection of any member of the ICAV without charge, and of any other person, on payment of [one pound] or such less sum as the ICAV may prescribe, for each inspection. (10A) Any member of an ICAV or other person may require the ICAV to supply to him a copy of the register required to be kept under this section, or any part of the register, on payment of [ X], or such less sum as the ICAV may prescribe, for every hundred words or fractional part thereof required to be copied. The ICAV shall cause a copy so required by a person to be sent to the person within 10 days of the receipt by the ICAV of the request, and if it fails to do so it shall be guilty of an offence. (11) It shall be the duty of each director and secretary of an ICAV to give information in writing to the ICAV as soon as may be of such matters as may be necessary to enable the ICAV to comply with this section. (11A) If an ICAV fails to send, in accordance with subsection (6), a notification, in the prescribed form, to the Central Bank of the fact of a person's having ceased, for whatever reason, to be a director or secretary of the ICAV and of the date on which that event occurred that person may serve on the ICAV a notice- (a) (b) requesting it to send forthwith the notification of that matter, in the prescribed form, to the Central Bank, and stating that if the ICAV fails to comply with that request within 21 days of the service of the notice on it, he will forward to the Central Bank and to every person who, to his knowledge, is an officer of the ICAV a copy of any notice of resignation by him as a director or secretary of the ICAV or any other documentary proof of his having ceased to be such a director or secretary together with- (i) in the case of the Central Bank, such additional information as may be prescribed (which may include a statutory declaration made by the 80

81 person stating the names of the persons who, to his knowledge, are officers of the ICAV), and (ii) in the case of every other person as aforesaid, a written request of the person that he take such steps as will ensure that the failure of the ICAV to comply with the notice continues no further. (11B) (11C) (11D) (11E) If an ICAV fails to comply with a request made of it under a notice referred to in subsection (11A) the person who served the notice may forward to the Central Bank and to every person who, to his knowledge, is an officer of the ICAV a copy of the notice of resignation or other documentary proof referred to in subsection (11A) if, but only if, there is forwarded together with that notice or proof, in the case of the Central Bank, the additional information referred to in that subsection and, in the case of every other person as aforesaid, the written request referred to in that subsection. No notice of resignation or other documentary proof of a person's having ceased to be a director or secretary of an ICAV which is forwarded to the Central Bank by that person (other than such a notice or other proof which is forwarded by him under and in accordance with subsections (11A) and (11B), or [ ] shall be considered by the Central Bank. No additional information referred to in subsection (11A)(b)(i) that is included in a notice of resignation or other documentary proof referred to in this section which is forwarded, under and in accordance with the foregoing provisions, to the Central Bank shall, of itself, be regarded as constituting defamatory matter. Any person may give notice (accompanied by such proof of the matter concerned as may be prescribed) to the Central Bank of the fact that a person holding the office of director or secretary of a particular ICAV has died. (12) If any inspection required under this section is refused or if default is made in complying with subsection (1), (2), (4), (6) or (7), the ICAV and every officer of the ICAV who is in default [shall be guilty of an offence and liable to a fine] not exceeding [ 1,000] and, for continued contravention, to a daily default fine not exceeding [ 50]. (13) In the case of any such refusal, the court may by order compel an immediate inspection of the register. (14) A person who fails to comply with subsection (11) shall be guilty of an offence and liable to a fine. (15) For the purposes of this section- (a) (b) in the case of a person usually known by a title different from his surname, the expression 'surname' means that title; references to a 'former forename' or 'surname' do not include- 81

82 (i) (ii) (iii) in the case of a person usually known by a title different from his surname, the name by which he was known previous to the adoption of or succession to the title; or in the case of any person, a former forename or surname where that name or surname was changed or disused before the person bearing the name attained the age of 18 years or has been changed or disused for a period of not less than 20 years; or in the case of a married woman, the name or surname by which she was known previous to the marriage. Explanatory Note: The object of this head is to make it possible for interested parties to identify, and to ascertain the history of, a director s involvement with other companies. Thus, an ICAV register of directors and secretaries will be required to include details of directorships held in the previous ten years, regardless of where the company is registered. As well as making it an offence to refuse to allow a register of directors to be inspected, the court may by order compel an immediate inspection thereof. 82

83 Head 52 Particulars relating to directors to be shown on all business letters of the ICAV. (1) Subject to subsection (2), every ICAV to which this section applies shall, in all business letters on or in which the ICAV's name appears and which are sent by the ICAV to any person, state in legible characters in relation to every director the following particulars: (2) (a) his present forename, or the initials thereof, and present surname; and (b) (c) any former forenames and surnames; and his nationality, if not Irish. (2) If special circumstances exist which render it in the opinion of the Central Bank expedient that such an exemption should be granted, the Central Bank may, subject to such conditions as he may think fit, grant exemption from the obligations imposed by this section. (3) This head shall apply to every ICAV registered under this Act. (4) Subject to subsection (5), if an ICAV makes default in complying with this section, every officer of the ICAV who is in default [shall be liable on summary conviction for each offence to a fine] not exceeding [ 1500], and, for the purpose of this subsection, where a body corporate is an officer of the ICAV, any officer of the body corporate shall be deemed to be an officer of the ICAV. (5) For the purposes of this section- (a) (b) "director" includes any person in accordance with whose directions or instructions the directors of the ICAV are accustomed to Act and "officer" shall be construed accordingly; and "initials" includes a recognised abbreviation of a forename; and subsection (12) of section 51 shall apply as it applies for the purposes of that section. Explanatory Note: 83

84 A vehicle must ensure that the name, surname and nationality (if not Irish) of each director appears on any business letter of the vehicle in which the vehicle s name appears. Unless an exemption is granted by the Central Bank, or the vehicle falls within the exemptions set out in this provision, failure to comply with vehicle letterhead disclosure requirements shall give rise to a fine payable by the defaulting officer. 84

85 Head 53 Provisions as to assignment of office by directors. If in the case of any ICAV provision is made by the instrument of incorporation or by any agreement entered into between any person and the ICAV for empowering a director of the ICAV to assign his office as such to another person, any assignment of office made in pursuance of the said provision shall, notwithstanding anything to the contrary contained in the said provision, be of no effect unless and until it is approved by a special resolution of the ICAV. Explanatory Note: This head expresses a standard corporate governance principle that ensures that the affairs of the vehicle are ultimately controlled by the members and not by (for example) hereditary directors. 85

86 Head 54 Prohibition of tax free payments to directors (1) It shall not be lawful for an ICAV to pay a director remuneration (whether as director or otherwise) free of income tax or of income tax and sur-tax or of sur-tax, or otherwise calculated by reference to or varying with the amount of his income tax or his income tax and sur-tax or his sur-tax, or to or with the rate of income tax or surtax. (2) Any provision contained in an ICAV's instrument of incorporation or in any contract other than such a contract as aforesaid, or in any resolution of an ICAV or an ICAV's directors, for payment to a director of remuneration as aforesaid shall have effect as if it provided for payment, as a gross sum subject to income tax and sur-tax, of the net sum for which it actually provides. (3) This head shall not apply to remuneration due before the operative date or in respect of a period before the operative date. Explanatory Note: This head provides that a vehicle may not pay a director remuneration free of income tax where such tax would properly apply. 86

87 Head 55 ICAV may have directors with unlimited liability. (1) In an ICAV the liability of the directors, or of the managing director, may, if so provided by the instrument of incorporation, be unlimited. (2) In an ICAV in which the liability of a director is unlimited, the directors of the ICAV and the member who proposes a person for election or appointment to the office of director, shall add to that proposal a statement that the liability of the person holding that office will be unlimited, and before the person accepts the office or acts therein, notice in writing that his liability will be unlimited shall be given to him by the following or one of the following persons, namely, the promoters of the ICAV, the directors of the ICAV, and the secretary of the ICAV. (3) If any director or proposer makes default in adding such a statement, or if any promoter or director or secretary makes default in giving such a notice, he [shall be guilty of an offence and liable to a fine] not exceeding [ 500] and shall also be liable for any damage which the person so elected or appointed may sustain from the default, but the liability of the person elected or appointed shall not be affected by the default. Explanatory Note: An ICAV may provide in its memorandum (constitutional document) that the liability of a director or managing director for the debts of the vehicle is unlimited, despite the fact that the liability of the ICAV is limited (to the extent of the value of shares issued or otherwise) Further legal consideration and advice required on this issue. The directors or members of an ICAV that propose the individual for election as a director must notify the individual of the fact that his liability will be unlimited. If they fail to do so, they will be guilty of an offence and will be liable to a fine. Even though the individual will retain unlimited liability, the defaulting party will be liable for any damage that the individual suffers as a result. 87

88 Head 56 Power of ICAV to make liability of directors unlimited (1) An ICAV, if so authorised by its instrument of incorporation, may, by special resolution, alter its instrument of incorporation so as to render unlimited the liability of its directors or of any managing director. (2) Upon the passing of any such special resolution, the provisions thereof shall be as valid as if they had been originally contained in the instrument of incorporation. Explanatory Note: An ICAV may, by a majority vote of 75% of the members, amend its memorandum so to make the liability of its directors or managing director unlimited. 88

89 Head 57 Minutes of proceedings of meetings (1) Every ICAV shall as soon as may be cause minutes of all proceedings of general meetings and all proceedings at meetings of its directors or committees of directors to be entered in books kept for that purpose. (2) Any such minute if purporting to be signed by the chairman of the meeting at which the proceedings were had, or by the chairman of the next succeeding meeting, shall be evidence of the proceedings. (3) Where minutes have been made in accordance with this section of the proceedings at any general meeting of the ICAV or meeting of directors or committee of directors, then, until the contrary is proved, the meeting shall be deemed to have been duly held and convened, and all proceedings had thereat to have been duly had, and all appointments of directors or liquidators shall be deemed to be valid. (4) An ICAV shall, if required by the Director of Corporate Enforcement, produce to the Director for inspection the book or books kept in accordance with subsection (1) and shall give to the Director such facilities for inspecting and taking copies of the contents of the book or books as the Director may require. (5) If an ICAV fails to comply with subsection (1) or (4), the ICAV and every officer of the ICAV who is in default shall be guilty of an offence and liable to a fine not exceeding [ 1500]. Explanatory Note: This head creates an obligation on the part of the vehicle to record minutes of general meetings and of meetings of directors and to enter them in books kept for that purpose. Such minutes, if signed by the chairman, are evidence of the meeting in question. The DCE/Central Bank (issue to be further clarified) may require access to the records. 89

90 Head 58 Member Every person who agrees to become a member of an ICAV, and whose name is entered on its register of members, shall be a member of the ICAV Explanatory Note: This head provides that share-holders shall be considered members of the ICAV and will have their name entered on the register of members. 90

91 Head 59 Register of Members (1) Subject to subsection (8), an ICAV shall keep a register of its members and enter in it the following particulars: (a) the names and addresses of the members and a statement of the shares held by each member, distinguishing each share by its number so long as the share has a number, the sub-fund (if any) and share class (if any) of such sub-fund to which the share belongs and any amount outstanding to be paid on any such share held by each member; (b) the date at which each person was entered in the register as a member; and (c) the date at which any person ceased to be a member. (2) The entries required under paragraphs (a) and (b) of subsection (1) shall be made within 2 days after the conclusion of the agreement with the ICAV to become a member. (3) The entry required under paragraph (c) of subsection (1) shall be made within 2 days after the date when the person concerned ceased to be a member, or, if he ceased to be a member otherwise than as a result of action by the ICAV, within 2 days of production to the ICAV of evidence satisfactory to the ICAV of the occurrence of the event whereby he ceased to be a member. (4) Subject to subsection (5), the register of members shall be kept available for inspection: (a) (b) at the registered office of the ICAV, or at an alternative place notified to the Central Bank under sub-section (6) as the place where the register of members shall be kept. (5) The register of members shall not be kept at a place outside the State. (6) Subject to subsection (7), every ICAV shall send notice to the Central Bank of the place where its register of members is kept and of any change in that place. (7) An ICAV shall not be bound to send notice under subsection (6) where the register has, at all times since it came into existence, been kept at the registered office of the ICAV. 91

92 Explanatory Note: This head obliges an ICAV to keep a register of all its members/shareholders. This head details the nature of the information that must be maintained on this register. 92

93 Head 60 Index of members (1) Every ICAV shall keep an index of the names of the members of the ICAV and shall, within [14] days after the date on which any alteration is made in the register of members, make any necessary alteration in the index. (2) The index shall, in respect of each member, contain a sufficient indication to enable the account of that member in the register to be readily found. (3) The index shall be at all times kept at the same place as the register of members. Explanatory Note: This head provides that an ICAV must maintain an up-to-date index of the names of those members on the register. 93

94 Head 61 Consequences of failure to comply with requirements as to register owing to agent s default Where, by virtue of paragraph (b) of subsection (4) of section 59, the register of members is kept at the office of some person other than the ICAV, and by reason of any default of his the ICAV fails to comply with that section or with any requirements of this Act as to the production of the register, that other person shall be liable to the same penalties as if he were an officer of the ICAV who is in default. Explanatory Note: In the circumstances where the share register is kept at the office of a person other than the ICAV, this provision outlines the liability of any person who fails to comply with this section. 94

95 Head 62 Rectification of register (1) If: (a) the name of any person is, without sufficient cause, entered in the register of members or omitted therefrom in contravention of subsections (1) and (2) of section 59; (b) default is made as to the details contained in any entry on the register in contravention of subsection (1) and (2) of section 59; or (c) default is made in entering on the register within the period fixed by subsection (3) of section 59 the fact of any person having ceased to be a member; the person aggrieved, or any member of the ICAV, or the ICAV, may apply to the court for rectification of the register. (2) Where an application is made under this section, the court may either refuse the application or may order rectification of the register and payment by the ICAV of compensation for any loss sustained by any party aggrieved. (3) On an application under this section the court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the ICAV on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register. (4) An ICAV may, without application to the court, at any time rectify any error or omission in the register but such a rectification shall not adversely affect any person unless he agrees to the rectification made. The ICAV shall, within 21 days, give notice of the rectification to the [registrar of companies] if the error or omission also occurs in any document forwarded by the ICAV to him. Explanatory Note: 95

96 This provision sets out the circumstances under which the register may be amended or rectified. 96

97 Head 63 Trusts not to be entered on the register No notice of any trust, express, implied or constructive, shall be entered on the register or receivable by the registrar. Explanatory Note: This head clarifies that trusts must not be entered on the register. This enables the ICAV to know the identity of the registered shareholders owning shares in the ICAV, which is consistent with the provisions applicable to Part XIII companies and the Companies Acts generally. 97

98 Head 64 Register as evidence The register of members shall be prima facie evidence of any matters by this Act directed or authorised to be inserted therein. Explanatory Note: This head provides that the register of members will be evidence of the matters noted in the register. 98

99 Head 65 General meetings (1) Subject to subsection (2) and subsection (4), every open-ended investment ICAV must in each year hold a general meeting ( annual general meeting ) in addition to any other meetings, whether general or otherwise, it may hold in that year. (2) If an ICAV holds its first annual general meeting within 18 months of the date on which the authorisation order made by the Central Bank in respect of the ICAV comes into effect, subsection (1) does not require the ICAV to hold any other meeting as its annual general meeting in the year of its incorporation or in the following year. (3) Subject to subsection (2) and subsection (4), not more than 15 months may elapse between the date of one annual general meeting of an ICAV and the date of the next (4) The directors of an open-ended ICAV may elect to dispense with the holding of an annual general meeting by giving sixty days written notice to all of the ICAV s shareholders. An election has effect for the year in which it is made and subsequent years, but does not affect any liability already incurred by reason of default in holding an annual general meeting. Explanatory Note: This head sets out the frequency requirements of the annual general meetings of an ICAV. 99

100 Head 66 Shareholder rights. (1) Any member of an ICAV who complains that the affairs of the ICAV are being conducted or that the powers of the directors of the ICAV are being exercised in a manner oppressive to him or any of the members (including himself), or in disregard of his or their interests as members, may apply to the court for an order under this section. (2) If, on any application under subsection (1) the court is of opinion that the ICAV's affairs are being conducted or the directors' powers are being exercised as aforesaid, the court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit, whether directing or prohibiting any act or cancelling or varying any transaction or for regulating the conduct of the ICAV's affairs in future, or for the purchase of the shares of any members of the ICAV by other members of the ICAV or by the ICAV and in the case of a purchase by the ICAV, for the reduction accordingly of the ICAV's capital, or otherwise. (3) Where an order under this section makes any alteration in or addition to any ICAV's instrument of incorporation, then, notwithstanding anything in any other provision of this Act but subject to the provisions of the order, the ICAV concerned shall not have power without the leave of the court to make any further alteration in or addition to the instrument of incorporation inconsistent with the provisions of the order; but, subject to the foregoing provisions of this subsection, the alterations or additions made by the order shall be of the same effect as if duly made by resolution of the ICAV, and the provisions of this Act shall apply to the instrument of incorporation as so altered or added to accordingly. (4) An office copy of any order under this section altering or adding to or giving leave to alter or add to an ICAV's instrument of incorporation shall, within 21 days after the making thereof, be delivered by the ICAV to the Central Bank for registration; and if an ICAV fails to comply with this subsection, the ICAV and every officer of the ICAV company who is in default shall be liable to a fine not exceeding [ ]. (5) The personal representative of a person who, at the date of his death was a member of an ICAV, or any trustee of, or person beneficially interested in, the shares of an ICAV by virtue of the will or intestacy of any such person, may apply to the court under subsection (1) for an order under this section and, accordingly, any reference in that subsection to a member of an ICAV shall be construed as including a reference to any such personal representative, trustee or person beneficially interested as aforesaid or to 100

101 all of them. (6) If, in the opinion of the court, the hearing of proceedings under this section would involve the disclosure of information the publication of which would be seriously prejudicial to the legitimate interests of the ICAV, the court may order that the hearing of the proceedings or any part thereof shall be in camera. Explanatory Note: This head provides for shareholder relief where there is deemed to be oppressive conduct by the directors of the ICAV, or where the affairs of the ICAV are being conducted in an oppressive manner. The shareholder has the right to apply to court for an order to have any such conduct ceased and rectified. 101

102 Head 67 Placeholder Placeholder Explanatory Note: Placeholder 102

103 Head 68 Approval of ICAV necessary for payment by it to director for loss of office. It shall not be lawful for an ICAV to make to any director of the ICAV any payment by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, without particulars relating to the proposed payment (including the amount thereof) being disclosed to the members of the ICAV and the proposal being approved by the ICAV in general meeting. Explanatory Note: This provision prevents a decision being made by the board of directors that the ICAV should make a payment to one or more of their number by way of compensation for loss of office or as consideration for, or in connection with, their retirement. The proposed payment must be disclosed to, and approved by, the members in a general meeting. 103

104 Head 69 Approval of ICAV necessary for payment to director of compensation with transfer of property. (1) It is hereby declared that it is not lawful in connection with the transfer of the whole or any part of the undertaking or property of an ICAV for any payment to be made to any director of the ICAV by way of compensation for loss of office or as consideration for or in connection with his retirement from office, unless particulars relating to the proposed payment (including the amount thereof) have been disclosed to the members of the ICAV and the proposal approved by the ICAV in general meeting. (2) Where a payment which is hereby declared to be illegal is made to a director of the ICAV, the amount received shall be deemed to have been received by him in trust for the ICAV. Explanatory Note: This head requires that the approval of the ICAV must be obtained for a payment to a director for loss of office arising out of the transfer of the undertaking or property of an ICAV to other interests. The head applies whether the payment is to be made by the ICAV or by other persons. This requirement is based on the principle that, where a purchaser is prepared to pay a certain sum for the property or shares of an ICAV, the proportion (if any) of that sum which is to be paid to the directors, should be subject to the approval of those who will receive the balance. The purpose is to prevent an abuse by directors of their position in a take-over either of the ICAV s business or of shareholdings in the ICAV. 104

105 Head 70 Duty of director to disclose to ICAV payments to be made to him in connection with transfer of shares in an ICAV. (1) Where, in connection with the transfer to any persons of all or any of the shares in an ICAV being a transfer resulting from- (2) (a) an offer made to the general body of shareholders; or (b) (c) (d) an offer made by or on behalf of some other body corporate, with a view to the ICAV becoming its subsidiary or a subsidiary of its holding company; or an offer made by or on behalf of an individual with a view to his obtaining the right to exercise or control the exercise of not less than one-third of the voting power at any general meeting of the ICAV; or any other offer which is conditional on acceptance to a given extent; a payment is to be made to a director of the ICAV by way of compensation for loss of office, or as a consideration for or in connection with his retirement from office, it shall be the duty of that director to take all reasonable steps to secure that particulars of the proposed payment (including the amount thereof) shall be included in or sent with any notice of the offer made for their shares which is given to any shareholders. (2) If- (a) (b) any such director fails to take reasonable steps as aforesaid; or any person who has been properly required by any such director to include the said particulars in or send them with any such notice as aforesaid fails so to do, he [shall be guilty of an offence and liable to a fine] not exceeding [ 1500]. (3) Unless- 105

106 (a) (b) the requirements of subsection (1) are complied with in relation to any such payment as is therein mentioned; and the making of the proposed payment is, before the transfer of any shares in pursuance of the offer, approved by a meeting summoned for the purpose of the holders of the shares to which the offer relates and of other holders of shares of the same class as any of the said shares, any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made, and the expenses incurred by him in distributing that sum amongst those persons shall be borne by him and not retained out of that sum. (4) Where the shareholders referred to in paragraph (b) of subsection (3) are not all the members of the ICAV and no provision is made by the instrument of incorporation for summoning or regulating such a meeting as is mentioned in that paragraph, the provisions of this Act and of the ICAV's instrument of incorporation relating to general meetings of the ICAV shall, for that purpose, apply to the meeting either without modification or with such modifications as the Minister on the application of any person concerned may direct for the purpose of adapting them to the circumstances of the meeting. (5) If at a meeting summoned for the purpose of approving any payment as required by paragraph (b) of subsection (3), a quorum is not present and, after the meeting has been adjourned to a later date, a quorum is again not present, the payment shall be deemed, for the purposes of that subsection, to have been approved. Explanatory Note: This head imposes on a director the obligation to bring to the notice of the vehicle the amount of any payment which is to be made to him by way of compensation for loss of office arising out of a transfer to any person of the vehicle s shares. It also applies whether the payment is to be made by the vehicle or by the person acquiring the shares. A director must disclose to the shareholders the particulars of the proposed payment. The director is guilty of an offence and liable to a fine for failure to do so. In addition, the compensation received by the director will be held by the director in trust for the sellers of the shares. 106

107 Head 71 Provisions supplementary to Sections (1) Where in proceedings for the recovery of any payment as having, by virtue of subsections (1) and (2) of section 69 or subsections (1) and (3) of section 70, been received by any person in trust, it is shown that- (a) (b) the payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question, or within one year before or 2 years after that agreement or the offer leading thereto; and the ICAV or any person to whom the transfer was made was privy to that arrangement; the payment shall be deemed, except in so far as the contrary is shown, to be one to which the subsections apply. (2) If in connection with any such transfer as is mentioned in section 69 or section 70- (a) (b) the price to be paid to a director of the ICAV for any shares in the ICAV held by him is in excess of the price which could at the time have been obtained by other holders of the like shares; or any valuable consideration is given to any such director, the excess or the money value of the consideration, as the case may be, shall, for the purposes of that section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office. (3) It is hereby declared that references in sections 68, 69 and 70 to payments to any director of an ICAV by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, include payments to him by way of compensation for loss of office as director of the ICAV or for the loss, while director of the ICAV, or on or in connection with his ceasing to be a director of the ICAV, of any other office in connection with the management of the ICAV's affairs or of any office as director or otherwise in connection with the management of the affairs of any subsidiary company but do not include any bona fide payment by way of damages for breach of contract or by way of pension in respect of past services, and for the purposes of this subsection "pension" includes any superannuation allowance, superannuation gratuity or similar payment. 107

108 (4) Nothing in section 69 and 70 shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are therein mentioned or with respect to any other like payments made or to be made to the directors of an ICAV or to prejudice the operation of any rule of law in relation to the accountability (if any) of any director for any such payment received by him. (5) References in sections 68, 69, 70 and this section to a director include references to a past-director. Explanatory Note: To be read with heads 69 and

109 Head 72 Avoidance of provisions exempting officers and auditors of ICAV from liability. (1) Subject as hereinafter provided, any provision whether contained in the instrument of incorporation of an ICAV or in any contract with an ICAV or otherwise for exempting any officer of the ICAV or any person employed by the ICAV as auditor from, or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the ICAV shall be void, so, however, that- (a) (b) nothing in this section shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any such provision was in force; and notwithstanding anything in this section, an ICAV may, in pursuance of any such provision as aforesaid, indemnify any such officer or auditor against any liability incurred by him in defending proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted, or in connection with any application under [ ]or [ ]in which relief is granted to him by the court. (2) Notwithstanding subsection (1), an ICAV may purchase and maintain for any of its officers or auditors insurance in respect of any liability referred to in that subsection. (3) Notwithstanding any provision contained in an enactment, the instrument of incorporation of an ICAV or otherwise, a director may be counted in the quorum and may vote on any resolution to purchase or maintain any insurance under which the director might benefit. (4) Any directors and officers insurance purchased or maintained by an ICAV before the date on which this section came into operation is as valid and effective as it would have been if those amendments had been in operation when that insurance was purchased or maintained. (5) In this section a reference to an officer or auditor includes any former or current officer or auditor of the ICAV, as the case may be. 109

110 Explanatory Note: Unduly wide provisions in the constitutional documents of a vehicle or in a contract entered into by the vehicle, shall be void. An exception is, however, made in favour of an indemnity against liabilities incurred by an officer or auditor in defending any proceedings in which judgment is given in his favour or in which he is acquitted. 110

111 Head 73 Register of directors shareholdings. (1) Every ICAV shall keep a register showing, in relation to each director and secretary of the ICAV, the number, description and amount of any shares in or debentures of the ICAV or any other body corporate, being the ICAV's subsidiary or holding company, or a subsidiary of the ICAV's holding company, which are held by, or in trust for, him or his spouse or any child of his or of which he or they have any right to become the holder (whether on payment or not), so however, that the register need not include shares in any body corporate which is the wholly-owned subsidiary of another body corporate, and for this purpose a body corporate shall be deemed to be the wholly-owned subsidiary of another if it has no members but that other and that other's wholly-owned subsidiaries and its or their nominees. (2) Subject to subsection (3), where any shares or debentures have to be, or cease to be, recorded in the said register in relation to any director or secretary by reason of a transaction entered into after the operative date and while he is a director or secretary the register shall also show the date of, and price or other consideration for, the transaction. (3) Where there is an interval between the agreement for any such transaction as aforesaid and the completion thereof, the date shall be that of the agreement. (4) The nature and extent of the interest or right in or over any shares or debentures recorded in relation to a director or secretary in the said register shall, if he so requires, be indicated in the register. (5) The ICAV shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon inquiry as to, the rights of any person in relation to any shares or debentures. (6) Subject to subsection (7), the said register shall be kept at the same office as the register of members is kept, and shall be open to inspection during business hours (subject to such reasonable restrictions as the ICAV may by its instrument of incorporation or in general meeting impose, so that not less than 2 hours in each day be allowed for inspection) by any member or holder of debentures of the ICAV. (7) The said register shall also be produced at the commencement of the ICAV's annual general meeting and shall remain open and accessible during the continuance of the meeting to any person attending the meeting. (8) Any member or holder of debentures of the ICAV may require a copy of the register, 111

112 or of any part thereof, on payment of [one shilling], or such less sum as the ICAV may prescribe, for every 100 words or fractional part thereof required to be copied. The ICAV shall cause any copy so required by any person to be sent to that person within a period of 10 days commencing on the day next after the day on which the requirement is received by the ICAV. (9) If default is made in complying with subsection (7), the ICAV and every officer of the ICAV who is in default [shall be guilty of an offence and liable to a fine] not exceeding [ 1500]; and if default is made in complying with subsection (1) or subsection (2), or if any inspection required under this section is refused or if any copy required under this section is not sent within the proper period, the ICAV and every officer of the ICAV who is in default [shall be guilty of an offence and liable to a fine] not exceeding [ 1500]. (10) To ensure compliance with the provisions of this section the court may by order compel an inspection of the register or direct that the copies required shall be sent to the persons requiring them. (11) For the purposes of this section- (a) (b) (c) any person in accordance with whose directions or instructions the directors of an ICAV are accustomed to act shall be deemed to be a director of the ICAV; and a person shall be deemed to hold, or to have an interest in or right over, any shares or debentures in which he has an interest jointly or in common with any other person or a limited, reversionary or contingent interest or an interest as the object of a discretionary trust; and a person shall be deemed to hold, or to have an interest or right in or over any shares or debentures if a body corporate other than the ICAV holds them or has that interest or right in or over them, and either- (i) (ii) that body corporate or its directors are accustomed to act in accordance with his directions or instructions; or he is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of that body corporate. (12) This head shall not apply to a private company if and so long as all the members of such private company are directors thereof. Explanatory Note: 112

113 This head provides for the keeping of a register of such shares and debentures held by the directors and by the secretary or by their spouses or children. This register will be open for inspection by the members of the vehicle. Failure to comply amounts to an offence on the part of the person in default and the vehicle both of whom are liable to a fine. 113

114 Head 74 General duty to make disclosure for the purposes of sections 73 and 93. (1) It shall be the duty of every director of an ICAV to give notice in writing to the ICAV of such matters relating to himself as may be necessary for the purposes of sections 73 and 93 except in so far as the latter section relates to loans made by the ICAV or by any other person under a guarantee from or on a security provided by the ICAV to a director thereof. (2) If any such notice is not given at a meeting of directors, the director or secretary, as the case may be, giving it shall take reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given. (3) Any person who fails to comply with this section [shall be guilty of an offence and liable to a fine] not exceeding [ 1500]. Explanatory Note: This head requires the directors and secretary to give notice to the vehicle as regards matters arising in relation to heads 73 and 93 above. 114

115 Head 75 Duty of director to disclose his interest in contracts made by the ICAV. (1) It shall be the duty of a director of an ICAV who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the ICAV to declare the nature of his interest at a meeting of the directors of the ICAV. (2) In the case of a proposed contract the declaration required by this section to be made by a director shall be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he became so interested, and in a case where the director becomes interested in a contract after it is made, the said declaration shall be made at the first meeting of the directors held after the director becomes so interested. (3) Subject to subsection (4), for the purposes of this section, a general notice given to the directors of an ICAV by a director to the effect that- (a) (b) he is a member of a specified ICAV or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that ICAV or firm; or he is to be regarded as interested in any contract which may after the date of the notice be made with a specified person who is connected with him (within the meaning of section 77 below), shall be deemed to be a sufficient declaration of interest in relation to any such contract. (4) No such notice as aforesaid shall be of effect unless either it is given at a meeting of the directors or the director takes reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given. (5) (a) A copy of every declaration made and notice given in pursuance of this section shall, within 3 days after the making or giving thereof, be entered in a book kept for this purpose. Such book shall be open for inspection without charge by any director, secretary, auditor or member of the ICAV at the registered office of the ICAV and shall be produced at every general meeting of the ICAV, and at any meeting of the directors if any director so requests in 115

116 sufficient time to enable the book to be available at the meeting. (b) If an ICAV fails to comply with this subsection or subsection (5A) the ICAV and every officer of the ICAV who is in default [shall be guilty of an offence and liable to a fine] not exceeding [ 1500] and if any inspection or production required thereunder is refused, the court may by order compel an immediate inspection or production. (5A) An ICAV shall, if required by the Director of Corporate Enforcement, produce to the Director for inspection the book kept by it in accordance with subsection (5)(a) and shall give the Director such facilities for inspecting and taking copies of the contents of the book as the Director may require. (6) Any director who fails to comply with this section [shall be guilty of an offence and liable to a fine] not exceeding [ 1500]. (7) Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of an ICAV from having any interest in contracts with the ICAV. Explanatory Note: It is desirable that an obligation should be imposed on every director who is in any way interested in a contract with his vehicle to disclose the nature of his interest at a meeting of the directors, and this section is designed to achieve this end. In order to avoid undue inconvenience for directors, provision is made for general declarations by directors to the effect that they are interested in all dealings with stated companies and firms. 116

117 Head 76 Transactions Involving Directors: Interpretation. (1) In sections 76 to 81A, unless the context otherwise requires- "credit transactions" has the meaning assigned to it by subsection (3); "guarantee" includes indemnity; "quasi-loan" has the meaning assigned to it by subsection (2); "licensed bank" means the holder of a licence under section 9 of the [Central Bank Act 1971]. (2) For the purposes of sections 76 to 81A of this Act - (a) a quasi-loan is a transaction under which one party ("the creditor") agrees to pay, or pays otherwise than in pursuance of an agreement, a sum for another ("the borrower") or agrees to reimburse, or reimburses otherwise than in pursuance of an agreement, expenditure incurred by another party for another ("the borrower")- (i) (ii) on terms that the borrower (or a person on his behalf) will reimburse the creditor; or in circumstances giving rise to a liability on the borrower to reimburse the creditor; (b) (c) any reference to the person to whom a quasi-loan is made is a reference to the borrower; and the liabilities of a borrower under a quasi-loan include the liabilities of any person who has agreed to reimburse the creditor on behalf of the borrower. (3) For the purposes of this Part a credit transaction is a transaction under which one party ("the creditor")- (a) (b) supplies any goods or sells any land under a hire-purchase agreement or conditional sale agreement; leases or licenses the use of land or hires goods in return for periodical payments; 117

118 (c) otherwise disposes of land or supplies goods or services on the understanding that payment (whether in a lump-sum or instalments or by way of periodical payments or otherwise) is to be deferred. (3A) For the purposes of sections 76 to 81A of this Act, a lease of land which reserves a nominal annual rent of not more than [ 10] is not a credit transaction where an ICAV grants the lease in return for a premium or capital payment which represents the open market value of the land thereby disposed of by the ICAV. (4) For the purposes of sections 76 to 81A of this Act, the value of a transaction or arrangement is- (a) (b) (c) (d) (e) in the case of a loan, the principal of the loan; in the case of a quasi-loan, the amount, or maximum amount, which the person to whom the quasi-loan is made is liable to reimburse the creditor; in the case of a transaction or arrangement, other than a loan or quasi-loan or a transaction or arrangement within paragraph (d) or (e), the price which it is reasonable to expect could be obtained for the goods, land or services to which the transaction or arrangement relates if they had been supplied at the time the transaction or arrangement is entered into in the ordinary course of business and on the same terms (apart from price) as they have been supplied or are to be supplied under the transaction or arrangement in question; in the case of a guarantee or security, the amount guaranteed or secured; in the case of an arrangement to which section [ ] applies the value of the transaction to which the arrangement relates less any amount by which the liabilities under the arrangement or transaction of the person for whom the transaction was made have been reduced. (5) For the purposes of subsection (4), the value of a transaction or arrangement which is not capable of being expressed as a specific sum of money (because the amount of any liability arising under the transaction is unascertainable, or for any other reason) shall, whether or not any liability under the transaction has been reduced, be deemed to exceed [ 50,000]. (6) For the purposes of sections 76 to 81A of this Act, a transaction or arrangement is made for a person if- (a) (b) (c) in the case of a loan or quasi-loan, it is made to him; in the case of a credit transaction, he is the person to whom goods or services are supplied, or land is sold or otherwise disposed of, under the transaction; in the case of a guarantee or security, it is entered into or provided in connection with a loan or quasi-loan made to him or a credit transaction made for him; 118

119 (d) (e) in the case of an arrangement to which section [ ] applies, the transaction to which the arrangement relates was made for him; and in the case of any other transaction or arrangement for the supply or transfer of goods, land or services (or any interest therein), he is the person to whom the goods, land or services (or the interest) are supplied or transferred. (7) Sections 76 to 81A of this Act do not apply to arrangements or transactions entered into before the commencement of this section but, for the purposes of determining whether an arrangement is one to which section [ ] applies the transaction to which the arrangement relates shall, if it was entered into before the said commencement, be deemed to have been entered into thereafter. (8) Sections 76 to 81A of this Act shall have effect in relation to an arrangement or transaction whether governed by the law of the State or of another country Explanatory Note: This head sets out a number of definitions that are relevant for the purposes of the restrictions and controls on the ability of an ICAV to transact with any of its directors. The head also outlines how the provisions of this Part are to be construed. 119

120 Head 77 Connected persons (1) For the purposes of this Part, a person is connected with a director of an ICAV if, but only if, the person (not being himself a director of the ICAV) is (a) that director s spouse [civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010], parent, brother, sister or child; (b) a person acting in his capacity as the trustee of any trust, the principal beneficiaries of which are the director, his spouse [civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] or any of his children or anybody corporate which he controls; or (c) in partnership, within the meaning of [section 1(1) of the Partnership Act 1890], with that director. (2) A body corporate shall also be deemed to be connected with a director of an ICAV if it is controlled by that director. (3) For the purposes of this section, a director of an ICAV shall be deemed to control a body corporate if, but only if, he is, alone or together with any other director or directors of the ICAV, or any person connected with the director or such other director or directors, interested in one-half or more of the equity share capital of that body or entitled to exercise or control the exercise of one-half or more of the voting power at any general meeting of that body. (4) In subsection (3)- (a) "equity share capital" has the same meaning as in [section 155 of the Companies Act 1963]; and (b) references to voting power exercised by a director shall include references to voting power exercised by another body corporate which that director controls. (5) The provisions of [section 54 of the Companies Act 1990] shall have effect for the purposes of subsection (3) with the substitution of the words "more than half" for the words "one-third or more" in subsections (5) and (6) of that section. (6) It shall be presumed for the purposes of sections 76 to 81A of this Act, until the contrary is shown, that the sole member of a single-member private limited company within the meaning of the [European Communities (Single-Member Private Limited Companies) Regulations, 1994 (S.I. No. 275 of 1994)] is a person connected with a director of that ICAV. 120

121 Explanatory Note This head defines connected persons and specifies when a director of a vehicle is to be regarded as being associated with or in control of a body corporate. 121

122 Head 78 Shadow Directors. (1) Subject to subsection (2), a person in accordance with whose directions or instructions the directors of an ICAV are accustomed to act (in these Regulations referred to as "a shadow director") shall be treated for the purposes of sections 77 to 81 of this Act as a director of the ICAV unless the directors are accustomed so to act by reason only that they do so on advice given by him in a professional capacity. (2) A shadow director shall not be guilty of an offence under [section 44 (8) of the Companies Act 1990] by virtue only of subsection (1). (3) Section 75 shall apply in relation to a shadow director of an ICAV as it applies in relation to a director of an ICAV, except that the shadow director shall declare his interest, not at a meeting of the directors, but by a notice in writing to the directors which is either- (a) (b) a specific notice given before the date of the meeting at which, if he had been a director, the declaration would be required by subsection (2) of that section to be made; or a notice which under subsection (3) of that section falls to be treated as a sufficient declaration of that interest or would fall to be so treated apart from the proviso; and section 57 shall have effect as if the declaration had been made at the meeting in question and had accordingly formed part of the proceedings at that meeting. Explanatory Note: This head extends prohibitions and duties to persons ( shadow directors ) who, even though not directors themselves, effectively direct the vehicle through the nominal directors. 122

123 Head 79 Prohibition of loans, etc. to directors and connected persons. (1) An ICAV shall not (a) make a loan or a quasi-loan to a director of the ICAV or to a person connected with such a director; (b) enter into a credit transaction as creditor for such a director or a person so connected; (c) enter into a guarantee or provide any security in connection with a loan, quasi-loan or credit transaction made by any other person for such a director or a person so connected. (2) An ICAV shall not arrange for the assignment to it or the assumption by it of any rights, obligations or liabilities under a transaction which, if it had been entered into by the ICAV, would have contravened subsection (1); but for the purposes of this Part the transaction shall be treated as having been entered into on the date of the arrangement. (3) An ICAV shall not take part in any arrangement whereby (a) another person enters into a transaction which, if it had been entered into by the ICAV, would have contravened subsection (1) or (2); and (b) that other person, in pursuance of the arrangement, has obtained or is to obtain any benefit from the ICAV Explanatory Note: 123

124 This heads prevents the ICAV from making loans, quasi-loans (or similar arrangement) to the directors or connected persons. 124

125 Head 80 Civil Remedies for breaches of Section 79. (1) Where an ICAV enters into a transaction or arrangement in contravention of section 79 the transaction or arrangement shall be voidable at the instance of the ICAV unless (a) restitution of any money or any other asset which is the subject matter of the arrangement or transaction is no longer possible, or the ICAV has been indemnified in pursuance of subsection (2) (b) for the loss or damage suffered by it; or (b) any rights acquired bona fide for value and without actual notice of the contravention by any person other than the person for whom the transaction or arrangement was made would be affected by its avoidance. (2) Without prejudice to any liability imposed otherwise than by this subsection but subject to subsection (3), where an arrangement or transaction is made by an ICAV for a director of the ICAV or person connected with such a director in contravention of section 79, that director and the person so connected and any other director of the ICAV who authorised the transaction or arrangement shall (whether or not it has been avoided in pursuance of subsection (1)) be liable (a) to account to the ICAV for any gain which he has made directly or indirectly by the arrangement or transaction; and (b) (jointly and severally with any other person liable under this subsection) to indemnify the ICAV for any loss or damage resulting from the arrangement or transaction. (3) Where an arrangement or transaction is entered into by an ICAV and a person connected with a director of the ICAV in contravention of section 79 that director shall not be liable under subsection (2) if he shows that he took all reasonable steps to secure the ICAV's compliance with that section and, in any case, a person so connected and any such other director as is mentioned in the said subsection (2) shall not be so liable if he shows that, at the time the arrangement or transaction was entered into, he did not know the relevant circumstances constituting the 125

126 contravention. Explanatory Note: This head outlines the civil remedies available for contraventions of section

127 Head 81 Contracts of employment of directors. (1) Subject to subsection (6), an ICAV shall not incorporate employment of directors in any agreement a term to which this section applies unless the term is first approved by a resolution of the ICAV in general meeting and, in the case of a director of a holding company, by a resolution of that ICAV in general meeting. (2) This head applies to any term by which a director's employment with the ICAV of which he is the director or, where he is the director of a holding company, his employment within the group is to continue, or may be continued, otherwise than at the instance of the ICAV (whether under the original agreement or under a new agreement entered into in pursuance of the original agreement), for a period exceeding five years during which the employment (a) (b) cannot be terminated by the ICAV by notice; or can be so terminated only in specified circumstances. (3) In any case where- (a) (b) a person is or is to be employed with an ICAV under an agreement which cannot be terminated by the ICAV by notice or can be so terminated only in specified circumstances; and more than six months before the expiration of the period for which he is or is to be so employed, the ICAV enters into a further agreement (otherwise than in pursuance of a right conferred by or by virtue of the original agreement on the other party thereto) under which he is to be employed with the ICAV or, where he is a director of a holding company, within the group, subsection (2) shall apply as if to the period for which he is to be employed under that further agreement there were added a further period equal to the unexpired period of the original agreement. (4) A resolution of an ICAV approving a term to which this section applies shall not be passed at a general meeting of the ICAV unless a written instrument of incorporation setting out the proposed agreement incorporating the term is available for inspection by members of the ICAV both- (a) at the registered office of the ICAV for not less than the period of 15 days ending with the date of the meeting; and 127

128 (b) at the meeting itself. (5) A term incorporated in an agreement in contravention of this section shall to the extent that it contravenes this section be void; and that agreement and, in a case where subsection (3) applies, the original agreement shall be deemed to contain a term entitling the ICAV to terminate it at any time by the giving of reasonable notice. (6) No approval is required to be given under this section by any body corporate unless it is an ICAV within the meaning of this Act. (7) In this section- (a) (b) "employment" includes employment under a contract for services; and "group", in relation to a director of a holding company, means the group which consists of that ICAV and its subsidiaries Explanatory Note: This head requires that approval must be obtained, in a general meeting, of a director s longterm service contract with the vehicle. 128

129 Head 81A Directors to have regard to interests of employees. (1) The matters to which the directors of an ICAV are to have regard in the performance of their functions shall include the interests of the ICAV's employees in general, as well as the interests of its members. (2) Accordingly, the duty imposed by this section on the directors shall be owed by them to the ICAV (and the ICAV alone) and shall be enforceable in the same way as any other fiduciary duty owed to an ICAV by its directors. Explanatory Note: This head introduces a statutory duty for directors, in the performance of their functions, to have regard to the interests of the vehicle s employees in general as well as the interests of its members. The common law position, that directors duties are only owed to their vehicle, is preserved by subsection 2 which makes it clear that the duty to have regard to the interests of employees is owed by directors and is enforceable in the same way as any other fiduciary duty by directors. 129

130 Head 82 Keeping of Books of Account. (1) Every ICAV shall cause to be kept proper books of account, whether in the form of documents or otherwise, that (a) correctly record and explain the transactions of the ICAV, (b) will at any time enable the financial position of the ICAV to be determined with reasonable accuracy, (c) will enable the directors to ensure that any balance sheet, profit and loss account or income and expenditure account of the ICAV complies with the requirements of this Act, and (d) will enable the accounts of the ICAV to be readily and properly audited. (2) The books of account of an ICAV shall be kept on a continuous and consistent basis, that is to say, the entries therein shall be made in a timely manner and be consistent from one year to the next. (3) Without prejudice to the generality of subsections (1) and (2), books of account kept pursuant to those subsections shall contain (a) entries from day to day of all sums of money received and expended by the ICAV and the matters in respect of which the receipt and expenditure takes place, 130

131 (b) a record of the assets and liabilities of the ICAV, (c) if the ICAV's business involves dealing in goods (i) a record of all goods purchased, and of all goods sold (except those sold for cash by way of ordinary retail trade), showing the goods and the sellers and buyers in sufficient detail to enable the goods and the sellers and buyers to be identified and a record of all the invoices relating to such purchases and sales, (ii) statements of stock held by the ICAV at the end of each financial year and all records of stocktakings from which any such statement of stock has been, or is to be, prepared, and (d) if the ICAV's business involves the provision of services, a record of the services provided and of all the invoices relating thereto. (4) For the purposes of subsections (1), (2) and (3), proper books of account shall be deemed to be kept if they comply with those subsections and give a true and fair view of the state of affairs of the ICAV and explain its transactions. (5) Subject to subsection (6), the books of account shall be kept at the registered office of the ICAV or at such other place as the directors think fit. (6) If books of account are kept at a place outside the State, there shall be sent to and kept at a place in the State and be at all reasonable times open to inspection by the directors such accounts and returns relating to the business dealt with in the books of account so kept as will disclose with reasonable accuracy the financial position of that business at intervals not exceeding 6 months and will enable to be prepared in accordance with this Act the ICAV's balance sheet, its profit and loss account or income and expenditure account and any document annexed to any of those documents giving information which is required by the said Acts and is thereby allowed to be so given. 131

132 (7) Books of account required by this section to be kept, and accounts and returns referred to in subsection (6), shall be kept either in written form in an official language of the State or so as to enable the books of account and the accounts and returns to be readily accessible and readily convertible into written form in an official language of the State. (8) An ICAV shall make its books of account, and any accounts and returns referred to in subsection (6), available in written form in an official language of the State at all reasonable times for inspection without charge by the officers of the ICAV and by other persons entitled pursuant to this Act to inspect the books of account of the ICAV. (9) A record, being a book of account required by this section to be kept or an account or return referred to in subsection (6), shall be preserved by the ICAV concerned for a period of at least 6 years after the latest date to which it relates. (10) An ICAV that contravenes this section and a person who, being a director of an ICAV, fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company thereunder, shall be guilty of an offence: Provided, however, that (a) in any proceedings against a person in respect of an offence under this section consisting of a failure to take reasonable steps to secure compliance by an ICAV with the requirements of this section, it shall be a defence to prove that he had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of ensuring that those requirements were complied with and was in a position to discharge that duty, and (b) a person shall not be sentenced to imprisonment for such an offence unless, in the opinion of the court, the offence was committed wilfully. Explanatory Note: 132

133 This head sets out the requirement on an ICAV to keep books of account. 133

134 Head 83 Liability of officers of an ICAV to penalty where proper books of account not kept. (1) If (a) an ICAV that is being wound up and that is unable to pay all of its debts, has contravened section 82, and (b) the court considers that such contravention has contributed to the ICAV's inability to pay all of its debts or has resulted in substantial uncertainty as to the assets and liabilities of the company or has substantially impeded the orderly winding up thereof, every officer of the ICAV who is in default shall be guilty of an offence and liable (i) on summary conviction, to a fine not exceeding X or to imprisonment for a term not exceeding X months or to both, or (ii) on conviction on indictment, to a fine not exceeding X or to imprisonment for a term not exceeding X years or to both. (2) In a prosecution for an offence under this section it shall be a defence for the person charged with the offence to show that (a) he took all reasonable steps to secure compliance by the ICAV with section 82, or (b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the ICAV who has been formally allocated such responsibility, was charged with the duty of ensuring that that section was complied with and was in a position to discharge that duty 134

135 Explanatory Note: This head outlines the penalties that may be applied to officers of an ICAV for failure to keep proper books of account. 135

136 Head 84 Personal liability of officers of an ICAV where proper books of account not kept. (1) Subject to subsection (2), if (a) an ICAV that is being wound up and that is unable to pay all of its debts has contravened section 82, and (b) the court considers that such contravention has contributed to the ICAV's inability to pay all of its debts or has resulted in substantial uncertainty as to the assets and liabilities of the ICAV or has substantially impeded the orderly winding up thereof, the court, on the application of the liquidator or any creditor or contributory of the ICAV, may, if it thinks it proper to do so, declare that any one or more of the officers and former officers of the ICAV who is or are in default shall be personally liable, without any limitation of liability, for all, or such part as may be specified by the court, of the debts and other liabilities of the ICAV. (2) On the hearing of an application under this subsection, the person bringing the application may himself give evidence or call witnesses. (3) (a) Where the court makes a declaration under subsection (1), it may give such directions as it thinks proper for the purpose of giving effect to the declaration and in particular may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the ICAV to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the ICAV held by or vested in him or any company or other person on his behalf, or any person claiming as assignee from or through the person liable under the declaration or any company or person acting on his behalf, and may from time to time make such furtherorder as may be necessary for the purpose of enforcing any charge imposed under this subsection. (b) In paragraph (a) assignee includes any person to whom or in whose favour, 136

137 by the directions of the person liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made. (4) The court shall not make a declaration under subsection (1) in respect of a person if it considers that (a) he took all reasonable steps to secure compliance by the ICAV with section 82, or (b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the ICAV who has been formally allocated such responsibility, was charged with the duty of ensuring that that section was complied with and was in a position to discharge that duty. (5) This head shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made. Explanatory Note: This head outlines the manner in which officers of the ICAV may be held personally liable for failure to keep proper books of account. 137

138 Head 85 Duty of auditors if proper books of account not being kept. (1) If, at any time, the auditors of an ICAV form the opinion that the ICAV is contravening, or has contravened, section 82by failing to cause to be kept proper books of account (within the meaning of that section) in relation to the matters specified in subsections (1) and (2) of that section, the auditors shall (a) serve a notice on the ICAV as soon as may be stating their opinion, and (b) not later than 7 days after the service of such notice on the ICAV, notify the Central Bank/ODCE in the prescribed form of the notice. (2) Where the auditors form the opinion that the company has contravened section 82 but that, following such contravention, the directors of the ICAV have taken the necessary steps to ensure that proper books of account are kept as required by that section, subsection (1) (b) shall not apply. (3) This head shall not require the auditors to make the notifications referred to in subsection (1) if they are of opinion that the contraventions concerned are minor or otherwise immaterial in nature. (4) A person who contravenes subsection (1) shall be guilty of an offence. 138

139 Head 86 Preparation of Annual Accounts. (1) The directors of each ICAV, shall, on a date not later than 18 months after the incorporation of the ICAV, and subsequently, at least once in each calendar year, prepare accounts for the ICAV for each financial year. (2) The accounts shall include a balance sheet or statement of assets and liabilities, a detailed income and expenditure account for the financial year, a report of the activities of the financial year and the other information provided for in Schedule [8] as well as any significant information which will enable investors to make an informed judgement on the developments of the ICAV and its results. (3) The accounts may be prepared in accordance with the following accounting standards: (a) Irish (b) UK (c) Unites States of America (d) International Financial Reporting (e) Japan (f) Canada (g) Any other state or territory prescribed for the purposes of the head hereafter mentioned in this paragraph. (4) The annual report of an ICAV shall in the case of a UCITS include that information required by the UCITS Regulations and the Central Bank s notices and in the case of a non-ucits shall include the information required by [[AIFMD] as implemented into 139

140 Irish law] and the Central Bank s notices. Explanatory Note: This provision sets out the obligation on the ICAV to prepare annual reports. 140

141 Head 87 Directors' report to be attached to balance sheet and contents of such report. (1) There shall be attached to every balance sheet laid before the annual general meeting of an ICAV a report by the directors on the state of the ICAV's affairs and, if the ICAV is a holding company, on the state of affairs of the ICAV and its subsidiaries as a group, the amount, if any, which they recommend should be paid by way of dividend [and the amount, if any, which they propose to carry to reserves within the meaning of the [ ]. (2) The said report shall be signed on behalf of the directors by two of the directors of the ICAV. (3) The said report shall deal, so far as is material for the appreciation of the state of the ICAV's affairs, with any change during the financial year in the nature of the business of the ICAV or of the ICAV's subsidiaries, or in the classes of business in which the ICAV has an interest whether as a member of another ICAV or a company or otherwise. (4) The said report shall contain a list of bodies corporate in relation to which either of the following conditions is fulfilled at the end of the ICAV's financial year- (a) (b) the body corporate is a subsidiary of the ICAV; although the body corporate is not a subsidiary of the ICAV, the ICAV is beneficially entitled to more than 20 per cent in nominal value of its shares carrying voting rights (other than voting rights which arise only in specified circumstances). (5) The list referred to in subsection (4) shall distinguish between bodies corporate falling within paragraph (a) and paragraph (b) thereof and shall state in relation to each such body corporate (a) (b) (c) its name; where it is incorporated; and the nature of the business carried on by it. (6) Subsections (4) and (5) shall not apply to an ICAV which is principally engaged in the acquisition and underwriting of shares or other securities of [companies] carrying on a trade or industry in the State and which holds a certificate of exemption issued by the Minister from the requirements of those subsections. 141

142 (7) The report referred to in subsection (1) shall contain a statement of the measures taken Explanatory Note: This head requires a report from the directors of an ICAV as to the state of the vehicle s affairs to be attached to every balance sheet presented to the annual general meeting, with respect to the state of the vehicle s affairs, the amount that they recommend should be paid in dividends, and the amount that they propose to carry reserve; the report must also indicate any changes that have taken place in the nature of the business in which the vehicle is interested. The directors will also be required to set out in this report a list of all bodies corporate that are subsidiaries of the vehicle and also bodies corporate which, though not subsidiaries, nonetheless have 20% in nominal value of their shares carrying voting rights held by the holding company. Any director who fails to take reasonable steps to comply with this obligation will be guilty of an offence and liable to a fine and / or a term of imprisonment. 142

143 Head 88 Information to be included in directors' report. (1) The report of the directors of an ICAV under section 87 shall, in addition to the information specified in that section, contain the following information: (a) a fair review of the development and performance of the ICAV s business and of its position and, in relation to its subsidiary undertakings, if any, of the development and performance of their business and of their position, during the financial year ending with the relevant balance sheet date together with a description of the principal risks and uncertainties that they face, which review - (i) (ii) shall be a balanced and comprehensive analysis of the development and performance of the ICAV s business and of its position and, in relation to its subsidiary undertakings, if any, of the development and performance of their business and of their position, consistent with the size and complexity of the business, and to the extent necessary for an understanding of the ICAV s development, performance or position, and that of its subsidiary undertakings, if any, shall include an analysis of financial, and, where appropriate, non-financial key performance indicators relevant to the particular business, including information relevant to environmental and employee matters, and, where appropriate, the report shall include additional explanations of amounts included in the annual accounts; (b) [(c) (d) (e) (f) particulars of any important events affecting the ICAV or any of its subsidiaries, if any, which have occurred since the end of that year; an indication of likely future developments in the business of the ICAV and of its subsidiaries, if any; an indication of the activities, if any, of the ICAV and its subsidiaries, if any, in the field of research and development; an indication of the existence of branches (within the meaning of [Council Directive 89/666/EEC) [Note OJ No. L395, , p 36]] of the ICAV outside the State and the country in which each such branch is located, and in relation to the use by the ICAV and its subsidiaries, if any, of financial instruments and where material for the assessment of the assets, liabilities, 143

144 financial position and profit or loss of the ICAV and, as the case may be, the group - (i) (ii) the financial risk management objectives and policies of the ICAV and the group, including the policy for hedging each major type of forecasted transaction for which hedge accounting is used, and the exposure of the ICAV and the group to price risk, credit risk, liquidity risk and cash flow risk. (2) Where an ICAV is to be treated as a small or medium sized [company] pursuant to [ ] the directors shall be exempt from the requirement to include in the report of the [directors] the information required by subsection (1)(a)(ii) and (f) of this section by the directors to secure compliance with the requirements of [ ], with regard to the keeping of proper books of account and the exact location of those books.. Explanatory Note: This provision supplements the requirements of section 87 by requiring that the report of the directors of a vehicle required under section 158 of the 1963 Act contain additional information concerning the vehicle s and its subsidiaries affairs, in particular a review of past and future developments, important events since the balance sheet date, and activities in research and development. 144

145 Head 89 Auditor Reports on Accounts. (1) The ICAV's auditors must audit and make a report to the ICAV's shareholders in respect of the accounts of the ICAV, drawn up in accordance with section 86. (2) A copy of the auditor's report must form part of the ICAV's annual report. Explanatory Note: The annual report must contain the accountts of the ICAV and an auditor must be appointed and be charged with preparing a report on these accounts. There are detailed provisions in respect of the appointment of auditors at [Schedule 7]. 145

146 Head 90 Consideration by auditors of consistency of directors' report with ICAV s accounts. It shall be the duty of the auditors of an ICAV, in preparing the report in relation to the ICAV required by section [ ], to consider whether the information given in the report of the directors of the ICAV relating to the financial year concerned is consistent with the accounts prepared by the ICAV for that year and they shall state in the report whether, in their opinion, such information is consistent with those accounts. Explanatory Note: This provision adds to the contents of the auditors report on the accounts by requiring that the auditors comment in their report on the consistency between the directors report and the annual accounts, and state whether they are of the opinion that the directors report accurately reflects the financial situation as per their accounts. 146

147 Head 91 Duty of Auditors re suspected commission of an indictable offence. (1) Where, in the course of, and by virtue of, their carrying out an audit of the accounts of the ICAV, information comes into the possession of the auditors of an ICAV that leads them to form the opinion that there are reasonable grounds for believing that the ICAV or an officer or agent of it has committed an indictable offence under this Act, the auditors shall, forthwith after having formed it, notify that opinion to the Director and provide the Director with details of the grounds on which they have formed that opinion. (2) Where the auditors of an ICAV notify the Director of any matter pursuant to subsection (1), they shall, in addition to performing their obligations under that subsection, if requested by the Director- (a) furnish the Director with such further information in their possession or control relating to the matter as the Director may require, including further information relating to the details of the grounds on which they formed the opinion referred to in that subsection, (b) give the Director such access to books and documents in their possession or control relating to the matter as the Director may require, and (c) give the Director such access to facilities for the taking of copies of or extracts from those books and documents as the Director may require. (3) Nothing in this section compels the disclosure by any person of any information that the person would be entitled to refuse to produce on the grounds of legal professional privilege or authorises the inspection or copying of any document containing such information that is in the person s possession.] (4) No professional or legal duty to which an auditor is subject by virtue of his appointment as an auditor of an ICAV shall be 147

148 regarded as contravened by, and no liability to the ICAV, its shareholders, creditors or other interested parties shall attach to, an auditor, by reason of 148

149 Head 92 Auditors. Schedule [7] to these Regulations makes provision with respect to the appointment of auditors of ICAVs. Explanatory Note:. See comments in relation to schedule 7 149

150 Head 93 Particulars of directors salaries and payments to be given in accounts. (1) In any accounts of an ICAV laid before the annual general meeting or in a statement annexed thereto, there shall, subject to and in accordance with the provisions of this section, be shown so far as the information is contained in the ICAV's books and papers or the ICAV has the right to obtain it from the persons concerned- (a) (b) (c) the aggregate amount of the directors emoluments; the aggregate amount of directors' or past-directors' pensions; and the aggregate amount of any compensation to directors or past-directors in respect of loss of office. (2) The amount to be shown under paragraph (a) of subsection (1)- (a) (b) shall include any emoluments paid to or receivable by any person in respect of his services as director of the ICAV or in respect of his services, while director of the ICAV, as director of any subsidiary thereof or otherwise in connection with the management of the affairs of the ICAV or any subsidiary thereof; and shall distinguish between emoluments in respect of services as director, whether of the ICAV or of its subsidiary, and other emoluments; and, for the purposes of this section, "emoluments" in relation to a director, includes fees and percentages, any sums paid by way of expenses allowance in so far as those sums are charged to income tax, any contribution paid in respect of him under any pension scheme, and the estimated money value of any other benefits received by him otherwise than in cash in so far as the same are charged to income tax. (3) The amount to be shown under paragraph (b) of subsection (1)- (a) (b) shall not include any pension paid or receivable under a pension scheme if the scheme is such that the contributions thereunder are substantially adequate for the maintenance of the scheme, but save as aforesaid, shall include any pension paid or receivable in respect of any such services of a director or pastdirector of the ICAV as are mentioned in subsection (2), whether to or by him or, on his nomination or by virtue of dependence on or other connection with him, to or by any other person; and shall distinguish between pensions in respect of services as director, whether 150

151 of the ICAV or its subsidiary, and other pensions; and, for the purposes of this section, "pension" includes any superannuation allowance, superannuation gratuity or similar payment, and "pension scheme" means a scheme for the provision of pensions in respect of services as director or otherwise which is maintained in whole or in part by means of contributions, and "contribution" in relation to a pension scheme means any payment (including an insurance premium) paid for the purposes of the scheme by or in respect of persons rendering services in respect of which pensions will or may become payable under the scheme, except that it does not include any payment in respect of two or more persons if the amount paid in respect of each of them is not ascertainable. (4) The amount to be shown under paragraph (c) of subsection (1)- (a) (b) shall include any sums paid to or receivable by a director or past-director by way of compensation for loss of office as director of the ICAV or for the loss, while director of the ICAV, or on or in connection with his ceasing to be a director of the ICAV, of any other office in connection with the management of the ICAV's affairs or of any office as director or otherwise in connection with the management of the affairs of any subsidiary thereof; and shall distinguish between compensation in respect of the office of director, whether of the ICAV or of its subsidiary, and compensation in respect of other offices; and, for the purposes of this section, references to compensation for loss of office shall include sums paid as consideration for or in connection with a person's retirement from office. (5) The amounts to be shown under each paragraph of subsection (1)- (a) shall include all relevant sums paid by or receivable from- (i) (ii) (iii) the ICAV; and the ICAV's subsidiaries; and any other person; except sums to be accounted for to the ICAV or any of its subsidiaries or, by virtue of section 70 to past or present members of the ICAV or any of its subsidiaries or any class of those members; and (b) shall distinguish, in the case of the amount to be shown under paragraph (c) of subsection (1), between the sums respectively paid by or receivable from the ICAV, the ICAV's subsidiaries and persons other than the ICAV and its subsidiaries. (6) The amounts to be shown under this section for any financial year shall be the sums receivable in respect of that year, whenever paid, or, in the case of sums not 151

152 receivable in respect of a period, the sums paid during that year, so, however, that where- (a) (b) any sums are not shown in the accounts for the relevant financial year on the ground that the person receiving them is liable to account therefor as mentioned in paragraph (a) of subsection (5), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or any sums paid by way of expenses allowance are charged to income tax after the end of the relevant financial year; those sums shall, to the extent to which the liability is released or not enforced or they are charged as aforesaid, as the case may be, be shown in the first accounts in which it is practicable to show them, or in a statement annexed thereto, and shall be distinguished from the amounts to be shown therein apart from this provision. (7) Where it is necessary so to do for the purpose of making any distinction required by this section in any amount to be shown thereunder, the directors may apportion any payments between the matters in respect of which they have been paid or are receivable in such manner as they think appropriate. (8) If in the case of any accounts the requirements of this section are not complied with, it shall be the duty of the auditors of the ICAV by whom the accounts are examined to include in the report thereon, so far as they are reasonably able to do so, a statement giving the required particulars. (9) In this section, any reference to an ICAV's subsidiary- (a) (b) in relation to a person who is or was, while a director of the ICAV, a director also, by virtue of the ICAV's nomination, direct or indirect, of any other body corporate, shall, subject to the following paragraph, include that body corporate, whether or not it is or was in fact the ICAV's subsidiary; and shall, for the purposes of subsections (2) and (3), be taken as referring to a subsidiary at the time the services were rendered, and, for the purposes of subsection (4), be taken as referring to a subsidiary immediately before the loss of office as director of the ICAV. Explanatory Note: 152

153 This head provides that the accounts of the ICAV presented at the annual general meeting must set out this information under appropriate headings. 153

154 Head 94 Sub-fund accounts. (1) For the purposes of sections 82 and 86 and all relevant provisions of this Act relating to the accounts of an ICAV, separate accounts may be prepared and presented in respect of a sub-fund or sub-funds. (2) For the purposes of subsection (1), all references to ICAV in sections 82 and 86 and all relevant provisions of this Act relating to the accounts of an ICAV shall be read as referring to the sub-fund or sub-funds in respect of which the separate accounts are to be prepared. Explanatory Note: (1) For the purposes of sections 82 and 86 and all relevant provisions of this Act relating to the accounts of an ICAV, separate accounts may be prepared and presented in respect of a sub-fund or sub-funds. (2) For the purposes of subsection (1), all references to ICAV in sections 82 and 86 and all relevant provisions of this Act relating to the accounts of an ICAV shall be read as referring to the sub-fund or sub-funds in respect of which the separate accounts are to be prepared. 154

155 Head 95 Reports: voluntary revision. (1) If it appears to the directors of an ICAV that any annual report of the ICAV did not comply with the requirements of this Act or Bank rules, they may prepare a revised annual report. (2) Where copies of the previous report have been laid before the ICAV in general meeting or delivered to the Central Bank, the revisions must be confined to: (a) the correction of anything in the previous report which did not comply with the requirements of this Act or Bank rules; and (b) the making of any necessary consequential alterations. Explanatory Note: This head allows the ICAV to prepare and submit a revised annual report where there is noncompliance with the Act or were any errors are found. 155

156 Head 96 Charges and Debentures. TEXT TO BE PROVIDED FOLLOWING INDUSTRY DISCUSSION WITH CB Explanatory Note: Placeholder 156

157 Head 97 Schemes of Arrangement, Mergers, Divisions and other Reorganisations. An arrangement, reconstruction, amalgamation, merger, division or other form of reorganisation involving an ICAV, or sub-fund thereof (other than a merger within the meaning of Regulation 3 of the UCITS Regulations), may be carried out in accordance the provisions of Schedule [2] hereto. Explanatory Note: This provision deals with schemes of amalgamation, mergers, divisions and other general reorganisations of ICAVs and is based on the format set out in regulation 70 and Schedule 6 of the OEIC Regulations. 157

158 Head 98 Conversions. Schedule [3] makes provision for a Company which is incorporated under the [Companies Consolidation Bill][Irish Companies Acts ] and authorised by the Central Bank as a collective investment undertaking to convert to an ICAV registered with the Central Bank and subject to the terms of this Act by way of continuation. Explanatory Note: This head deals with the conversion of a Part XIII investment ICAV to an ICAV. The head also provides for the migration of funds domiciled outside of Ireland into Ireland as ICAVs by continuation and the migration of ICAVs out of Ireland into a relevant jurisdiction by continuation and de-registration. 158

159 Head 99 Migration and De-Registration. Schedule [4] makes provision for the migration of an ICAV which is established and registered under the laws of a [relevant jurisdiction] and which is a collective investment undertaking to apply to the Central Bank to be registered as an ICAV subject to the terms of this Act by way of continuation. Schedule [5] makes provision for an ICAV which is established and registered in the State under this Act and which proposes to be registered in a [relevant jurisdiction] by way of continuation as a body corporate to apply to the Central Bank to be de-registered in the State. 159

160 Head 100 Receivership. (1) Subject to this section, the provisions of the Companies Acts relating to Receivers shall, subject to any necessary modifications, apply to an ICAV to which a Receiver has been appointed as if the ICAV were a company limited by shares. (2) In the application of the Companies Acts to the Receivership of an ICAV, a reference to the Registrar of Companies shall be construed as a reference to the Central Bank. Explanatory Note: Cross application of Receivership provisions to Companies Act. 160

161 Head 101 Winding up. (1) Subject to this section, an ICAV may be wound up in accordance with the Companies Acts and accordingly those Acts shall, subject to any necessary modifications, apply as if the ICAV were a company limited by shares. ((2) In the application of the Companies Acts to the winding up of an ICAV- (a) a reference to "the registrar of companies" in the Act of 1963 shall be construed as a reference to the Central Bank, (b) a reference to "the articles of association" in the Act of 1963 shall be construed as a reference to the instrument of incorporation of an ICAV, (c) a reference to "a special resolution" in the Act of 1963 shall be construed as a reference to a special resolution of an ICAV within the meaning of this Act, and (d) "secretary" in section 224 of the Act of 1963 shall be construed as the secretary of an ICAV. ((3) An ICAV may be wound up by the Court if- (a) the ICAV has by special resolution resolved that the ICAV be wound up by the court; (b) the ICAV does not commence its business within a year from its incorporation or suspends its business for a whole year; (c) the number of members is reduced below two; 161

162 (d) the ICAV is unable to pay its debts; (e) the court is of opinion that it is just and equitable that ICAV should be wound up and the following conditions are complied with- (i) the petition for such winding-up has been presented by the trustee of the ICAV under section [Part 2] of this Act; (ii) the said trustee has notified the ICAV of its intention to resign as such trustee and six or more months have elapsed since the giving of that notification without a trustee having been appointed to replace it; (iii) the court, in considering the said petition, has regard to (A) any conditions imposed under section [Part 2] of this Act in relation to the resignation from office of such a trustee and the replacement of it by another trustee; and (B) whether a winding-up would best serve the interests of shareholders in the ICAV ; and (iv) the petition for such winding-up has been served on the company (if any) discharging, in relation to the ICAV, functions of an ICAV referred to in conditions imposed under section [Part2] of this Act, as a management company ; and (v) in the case of an investment company within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, such conditions as the Minister may prescribe by regulations;] (f) the court is satisfied that the ICAV's affairs are being conducted, or the powers of the directors are being exercised, in a manner oppressive to any member or in disregard of his interests as a member and that, despite the existence of an alternative remedy, winding up would be justified in the general circumstances of the case so, however, that the court may dismiss a 162

163 petition to wind up under this paragraph if it is of opinion that proceedings under Section 66 of this Act would, in all the circumstances, be more appropriate. (4) (a) A petition for the winding up of an ICAV may, not withstanding anything in section 215 of the Act of 1963, be presented by the Central Bank. (b) Sections 213 and 215 (d), (f) and (g) of the Act of 1963 shall not apply to the winding up of an ICAV. ((5) Notwithstanding anything in sections 217, 234, 256, 280 and 298 of the Act of 1963, an application to the Court under any of those sections may be made by the Central Bank. ((6) The winding up of an ICAV shall not bar the right of the Central Bank to have it wound up by the Court. ((7) Notice of any resolution or application for the winding up of an ICAV shall be given to the Central Bank. ((8) Part X of the Act of 1963 shall not apply to an ICAV and, notwithstanding anything in that or any other Act, an ICAV may not be wound up except in accordance with this section. ((10) The liquidator in the exercise of his powers under section 231 (2) (a) of the Act of 1963 shall not dispose of any of the ICAV's assets secured by mortgage of freehold or leasehold estate or interest on terms as respects the loans other than terms which the Court is satisfied are just and equitable and which the borrowers would have been reasonably entitled to expect if the society had not been wound up. ((11) The Central Bank may appoint one or more officers of the Central Bank or other representatives who shall be entitled to- (a) attend any meeting of creditors of an ICAV, and (b) be a member of any committee of inspection appointed under section 233 or 268 of the Act of

164 ((12) An officer or representative of the Central Bank appointed to be a member of a committee of inspection shall not be removed from office without the consent of the Central Bank and shall not be counted in computing any minimum or maximum number of members of such committee specified in any enactment. (13) Where the winding up of an ICAV commences within one year after the ICAV has changed its name, the former name as well as the existing name shall appear on all notices and advertisements relating to the winding up Explanatory Note: Cross application of Winding Up provisions to Companies Act. 164

165 Head 102 Strike-off and Restoration. Placeholder Explanatory Note: Placeholder 165

166 Head 103 Prosecution of Offences. Placeholder Explanatory Note: Placeholder 166

167 Head 104 Powers and Duties of the ODCE (1) The ODCE shall have all of the powers and duties in respects of ICAVs as it has in respect of Part XIII Companies. (2) Without prejudice to subsection (1) its powers shall include, but are not limited to: (a) The power to conduct investigations; (b) The power to apply to the Courts to appoint inspectors; (c) The power to take disqualification proceedings, or (d) The power to require, or not, a liquidator to undertake restriction proceedings. 167

168 Head 105 Amendments to UCITS Regulations. Placeholder Explanatory Note: Placeholder 168

169 Head 106 Amendments to Central Bank Acts. Placeholder Explanatory Note: Placeholder 169

170 Head 107 Tax Treatment Applicable to an ICAV. An ICAV will be an investment undertaking for the purposes of Section 739B of the Taxes Consolidation Act Explanatory Note: Placeholder 170

171 Schedule 1 Instrument of incorporation Placeholder 171

172 Schedule 2 Schemes of arrangement, mergers, divisions and other reorganisations 1. This Schedule applies to any scheme or arrangement, reconstruction, amalgamation, merger, division or other form of re-organisation involving an ICAV or sub-fund thereof, as may be permitted, from time to time, under the Central Bank Notices, other than a merger to which Part 7 of the UCITS Regulations apply. 2. Subject as provided below, any arrangement described in subsection 1, involving one or more ICAVs, may only be carried out in accordance with the requirements of the Central Bank Notices and the provisions of this Schedule. 3. Subject to its instrument of incorporation, an ICAV may enter into any arrangement provided in subsection 1 above with any collective investment undertaking which is authorised by the Central Bank or by the relevant Competent Authority of a member state of the EU, a member state of the EEA or Guernsey, Jersey or the Isle of Man or with such other regulated entities as may be permitted by the Central Bank, from time to time. 4. Any arrangement provided for in subsection 1 involving one or more ICAVs and a public limited company (other than an ICAV authorised under Part XIII of the 1990 Act [Part 24 of the Companies Consolidation Bill]) must also comply with the relevant provisions of the Companies Acts and the 1987 Regulations [Part 17 of the Companies Consolidation Bill] in relation to any such arrangement. 5. Any arrangement involving a cross border merger in accordance with the provisions of 2008 Regulations with one of more ICAVs and a closed ended investment company authorised under Part XIII of the 1990 [Part 24 of the Companies Consolidation Bill] must also comply with the relevant provisions of the Companies Acts and 2008 Regulations [Part 17 of the Companies Consolidation Bill] in relation to any such arrangement. 172

173 6. The Central Bank Notices may provide for various measures regarding any of the arrangements provided for in subsection 1, to include provisions regarding the types of arrangement which may be permitted, the nature and content of the documentation which must be presented to the Central Bank and to shareholders in the ICAV or ICAVs which are a party to the arrangement, the required consents of shareholders to the proposed arrangement, experts reports on the share exchange ratio, the novation of existing contracts, the preservation of the rights of existing holders of security interests, the protection of creditors, the publication of the arrangement, delivery of notices and such other matters as the Central Bank may consider necessary or appropriate, from time to time, including penalties for misleading, inaccurate or untrue statements contained in any documentation issued in relation to any such arrangement. 7. The Central Bank may provide for the automatic dissolution of one or more ICAVs on the coming into effect on any arrangement or reorganisation referred to in subsection An application to the court by virtue of the arrangements described in subsection 4 or 5 above, shall be treated as one to which the 1987 Regulations [Chapters 14 and 15 of Part 17 of the draft Companies Consolidation Bill] or the 2008 Regulations [Chapter [3 ]of Part [9] and Chapter 14 of Part 17 of the draft Companies Consolidation Bill] apply and the provisions of those regulations shall have effect, subject to subsections 9 and The statutory provisions referred to in subsection 8 above shall have effect with such modifications as are necessary or appropriate for the purposes of this Schedule. In particular, any reference in those provisions to a [scheme, a merger by acquisition, a merger by formation, a merger by absorption, a division by acquisition or a division by formation] is to be taken to be a reference to a scheme falling within subsections 4 or 5 above. 10. Without prejudice to the generality of the forgoing, the following references in the statutory provisions referred to in subsections 4 and 5 shall have effect as follows, unless the context otherwise requires: any reference to a [scheme, merger or division] is to be taken to be a reference to a [scheme, merger or division] falling within subsections 4 or 5 above; any reference to an ICAV, public limited ICAV or a PLC is to be taken to be a reference to an ICAV; any reference to members is to be taken to be a reference to shareholders of an ICAV; 173

174 10.4. any reference to the registered office of an ICAV is to be taken to be a reference to the [head office] of an ICAV; any reference to the instrument of incorporation of an ICAV is to be taken to be a reference to the instrument of incorporation of an ICAV; any reference to a report under section 30 of the Companies (Amendment) Act 1983 [section 1004 of Chapter 3 of Part 17 of the Companies Consolidation Bill] (public ICAV: valuation of non-cash consideration for shares) is to be taken to be a reference to any report with respect to the valuation of any noncash consideration given for shares in an ICAV which may be required by Central Bank Notices; any reference to annual accounts is to be taken to be a reference to the accounts contained in the annual report of an ICAV; any reference to the requirements of the Companies Acts as to balance sheets forming part of an ICAV s annual accounts is to be taken to be a reference to any requirements arising by virtue of Central Bank rules as to balance sheets drawn up for the purposes of the accounts contained in the annual report of an ICAV; any reference to paid up capital is to be taken to be a reference to the share capital of an ICAV. 174

175 Schedule 3 Conversions 1. This Schedule applies to the conversion of a body corporate which is incorporated under the laws of Ireland pursuant to [Part XIII of the Companies Act 1990][Part 24 of the Companies Consolidation Bill] and which is authorised as a collective investment undertaking by the Central Bank, for the purposes of this Schedule a converting ICAV. 2. A converting ICAV may apply to the Central Bank to be registered as an ICAV to which this Act applies, by way of continuation. 3. In this Schedule application documents means 3.1 a copy of the certificate of incorporation issued by the Companies Registration Office; 3.2 a copy, certified in the prescribed manner of the instrument of incorporation and articles of association of the converting ICAV; 3.3 a list setting out particulars in relation to the registered office, directors and ICAV secretary of the converting ICAV; 3.4 a statutory declaration of a director of the converting ICAV made not more than [28 days] before the date on which the application is made to the Central Bank to the effect that: no petition or other similar proceeding to wind up or liquidate the converting ICAV has been notified to it and remains outstanding in any place and no order has been notified to the converting ICAV or resolution adopted to wind up or liquidate the converting ICAV in any place; the appointment of a receiver, liquidator, examiner or other similar person has not been notified to the converting ICAV and, at the date of the declaration, no such person is acting in that capacity in any place with respect to the converting ICAV or its property or any part thereof; 175

176 3.4.3 the converting ICAV is not, at the date of the declaration, operating or carrying on business under any scheme, order, compromise or other similar arrangement entered into or made by the converting ICAV with creditors in any place; the conversion is permitted by and has been approved in accordance with the instrument of incorporation and articles of association of the converting ICAV; any consented approval to the proposed conversion required by any contract entered into or undertaking given by the converting ICAV has been obtained or varied as the case may be; [a declaration of solvency prepared in accordance with Schedule [6] a schedule of charges or security interests created or granted by the converting ICAV; notification of the proposed name of the converting ICAV if different from its existing name (other than where the only change is to delete the words public limited ICAV or plc from the existing name). 4. Where an application is made under clause 2, the Central Bank shall not register the converting ICAV as an ICAV unless it is satisfied that all of the requirements of this Act in respect of the registration and of matters precedent and incidental thereto have been complied with and, in particular, but without prejudice to the generality of the foregoing, it is satisfied that: the converting ICAV has delivered to the Central Bank an application for the purpose, in the prescribed form and signed by a director of the converting ICAV, together with the application documents listed in clause 3; if relevant, the proposed new name of the converting ICAV has not been determined to be undesirable pursuant to section [ ] of this Act; the converting ICAV is authorised by the Central Bank as a collective investment undertaking pursuant to the relevant requirements. 5. An application under this Schedule shall be accompanied by a statutory declaration in the prescribed form made by a solicitor engaged for this purpose by the converting ICAV, or by a director of the converting ICAV, and stating that the requirements 176

177 mentioned in clause 4 have been complied with. The Central Bank may accept such a declaration as sufficient evidence of compliance. 6 The Central Bank shall, as soon as is practicable after receipt of the application for conversion, publish notice of it in the Companies Registration Office Gazette. 7. Where the Central Bank receives a notification under clause 4, the Central Bank 7.1 shall issue a [certificate of registration] of the converting ICAV as an ICAV under the laws of the State; and 7.2 if it issues such a certificate, shall enter in a register maintained for the purpose of [section of this Act] the details of charges and securities interests of the converting ICAV. 8. The converting ICAV shall, as soon as may be after being registered under clause 7, apply to be de-registered in the Companies Registration Office with effect from the date of its registration as an ICAV. 9. From the date of registration, the converting ICAV shall be deemed to be an ICAV formed and registered under this Act and shall continue for all purposes under this Act, and the provisions of this Act shall apply to the converting ICAV, but this section does not operate: 9.1 to create a new legal entity; 9.2 to prejudice or affect the identity or continuity of the converting ICAV as previously established and registered under the laws of Ireland for the period that the converting ICAV was established and registered in Ireland; 9.3 to affect any contract made, resolution passed or any other act or thing done in relation to the converting ICAV during the period that the converting ICAV was so established and registered; 9.4 to affect the rights, authorities, functions and liabilities or obligations of the converting ICAV or any other person; or 9.5 to render defective any legal proceedings by or against the converting ICAV. 10. Without prejudice to the generality of clause 9: 177

178 10.1 the failure of a converting ICAV to send to the Central Bank the particulars of a charge or security interest created before the date of registration shall not prejudice any rights which any person in whose favour the charge was made or security interest created may have thereunder; and any legal proceedings that could have been continued or commenced by or against the converting ICAV before its registration under this section may, notwithstanding the registration, be continued or commenced by or against the converting ICAV after registration. 11. On registration of the converting ICAV under clause 7, the Central Bank shall forthwith authorise the converting ICAV to carry on business under this Act. 12. If there is any material change in any of the information contained in the statutory declaration mentioned in sub-clause 3.4 after the date of the declaration and before the date of the registration, the director who made that statutory declaration, and any other director who becomes aware of that material change shall forthwith deliver a new statutory declaration to the Central Bank relating to the change. 13. [If the converting ICAV fails to comply with any provision of this Schedule or this Act, the Central Bank may send to the converting ICAV by post a registered letter stating that, unless the converting ICAV rectifies the failure within 1 month after the date of the letter and confirms that it has rectified the failure, a notice may be published in the Companies Registration Office Gazette with a view to striking the converting ICAV off the register.] 14. If the failure mentioned in clause 13 is not rectified within 1 month after date of the sending of the letter referred to in that section, the Central Bank may publish in the Companies Registration Office Gazette a notice stating that, at the expiration of 1 month after the date of that notice, the converting ICAV mentioned therein will, unless the matter is resolved, be struck off the register, and the converting ICAV will be dissolved. 15. At the expiration of the time mentioned in the notice, the Central Bank may, unless cause to the contrary is previously shown by the converting ICAV, strike the ICAV off the register, and shall publish notice thereof in the Companies Registration Office Gazette, and on that publication, the converting ICAV shall be dissolved. 178

179 Schedule 4 Migrations The Minister may make regulations prescribing places, outside the State, for the purposes of the definition of relevant jurisdiction in sections (1) and (2), where he or she is satisfied that the law of the place concerned makes provision for migrating ICAVs to continue under the laws of the State or for ICAVs to continue under the laws of that place in a substantially similar manner to continuations under section This Schedule applies to a body corporate which is established and registered in a relevant jurisdiction and which is a collective investment undertaking which applies to be registered in Ireland as an ICAV by continuation, for the purposes of this Schedule a migrating ICAV. A migrating ICAV may apply to the Central Bank to be registered as an ICAV in the State by way of continuation. 3. In this Schedule registration documents means 3.1 a copy, certified and authenticated in the prescribed manner, of the certificate of registration or equivalent certificate or document issued with respect to the migrating ICAV under the laws of the relevant jurisdiction; 3.2 a copy, certified and authenticated in the prescribed manner, of the instrument of incorporation and articles of the migrating ICAV or equivalent constitutive document of the migrating ICAV; 3.3 a list setting out the particulars in relation to the directors and secretary of the migrating ICAV in accordance with the provisions of [section [ ] of this Act]; 3.4 a statutory declaration of a director of the migrating ICAV made not more than 28 days before the date on which the application is made to the Central Bank to the effect that: the migrating ICAV is, as of the date of the declaration, established and registered in the relevant jurisdiction, no petition or other similar proceeding to wind up or liquidate the migrating ICAV has been notified to it and remains outstanding in any place, and no order has been notified to the migrating ICAV or resolution adopted to wind up or liquidate the migrating ICAV in any place; the appointment of a receiver, liquidator, examiner or other similar person has not been notified to the migrating ICAV and, at the date of the declaration, no 179

180 such person is acting in that capacity in any place with respect to the migrating ICAV or its property or any part thereof; the migrating ICAV is not, at the date of the declaration, operating or carrying on business under any scheme, order, compromise or other similar arrangement entered into or made by the migrating ICAV with creditors in any place; at the date of the declaration the migrating ICAV has served notice of the proposed registration on the creditors of the migrating ICAV; any consent or approval to the proposed registration in the State required by any contract entered into or undertaking given by the migrating ICAV has been obtained or waived, as the case may be; and the registration is permitted by and has been approved in accordance with the instrument of incorporation and articles of association or equivalent constitutive document of the migrating ICAV; 3.5 a declaration of solvency prepared in accordance with Schedule [6]; 3.6 a schedule of the charges or security interests created or granted by the migrating ICAV that would, if such charges or security interests had been created or granted by an ICAV incorporated under this Act, have been registerable under section [ ] of this Act and the particulars of such charges and interests as are specified in section [ ] of this Act; 3.7 notification of the proposed name of the migrating ICAV if different from its existing name; and 3.8 a copy of the instrument of incorporation and articles of the migrating ICAV which the migrating ICAV has resolved to adopt, which shall be in the Irish language or the English language, which shall take effect on registration under clause 8 and which the migrating ICAV undertakes not to amend before registration without the prior authorisation of the Central Bank. 4. If the original of any of the documents referred to in clause 3 is not written in the Irish language or the English language, then registration documents in this Schedule, in so far as that expression relates to such a document, means a translation of the document into the Irish language or the English language certified as being a correct translation of it by a person who is competent to so certify. 180

181 5. Where an application is made under section 2, the Central Bank shall not register the migrating ICAV as an ICAV in the State unless it is satisfied that all of the requirements of this Act in respect of the registration and of matters precedent and incidental thereto have been complied with and, in particular, but without prejudice to the generality of the foregoing, he or she is satisfied that: 5.1the migrating ICAV has delivered to the Central Bank an application for the purpose, in the prescribed form and signed by a director of the migrating ICAV, together with the registration documents; 5.2 the name or, if relevant, the proposed new name of the migrating ICAV has not been determined to be undesirable pursuant to section [ ] of this Act; 5.3 the migrating ICAV has delivered to the Central Bank notice of the address of its proposed registered office in the State; 6. An application under this Schedule shall be accompanied by a statutory declaration in the prescribed form made by a solicitor engaged for this purpose by the migrating ICAV, or by a director of the migrating ICAV, and stating that the requirements mentioned in clause 5 have been complied with. The Central Bank shall accept such a declaration as sufficient evidence of compliance. 7. The Central Bank shall, as soon as is practicable after receipt of the application for registration, publish notice of it in the Companies Registration Office Gazette. 8. Where the Central Bank receives a notification under sub- clause 5.1, the Central Bank: 8.1 shall issue a certificate of registration of the migrating ICAV as an ICAV under the laws of the State; and 8.2 if it issues such a certificate, shall enter in a register maintained for the purpose of [section [ ] of this Act] the details of charges and securities interests of the migrating ICAV. 9. The migrating ICAV shall, as soon as may be after being registered under clause (8), apply to be de-registered in the relevant jurisdiction. 10. The Central Bank shall enter in its register of ICAVs the date of registration of the migrating ICAV and shall forthwith publish notice in the Companies Registration Office Gazette of the following matters: 181

182 10.1 the date of the registration of the migrating ICAV under this Schedule; 10.2 the relevant jurisdiction; and 10.3 the previous name of the migrating ICAV if different from the name under which it is being registered. 11. From the date of registration, the migrating ICAV shall be deemed to be an ICAV formed and registered under this Act and shall continue for all purposes under this Act, and the provisions of this Act shall apply to the migrating ICAV, but this section does not operate: 11.1 to create a new legal entity; 11.2 to prejudice or affect the identity or continuity of the migrating ICAV as previously established and registered under the laws of the relevant jurisdiction for the period that the migrating ICAV was established and registered in the relevant jurisdiction; 11.3 to affect any contract made, resolution passed or any other act or thing done in relation to the migrating ICAV during the period that the migrating ICAV was so established and registered; 11.4 to affect the rights, authorities, functions and liabilities or obligations of the migrating ICAV or any other person; or 11.5 to render defective any legal proceedings by or against the migrating ICAV. 12. Without prejudice to the generality of clause 11: 12.1 the failure of a migrating ICAV to send to the Central Bank the particulars of a charge or security interest created before the date of registration shall not prejudice any rights which any person in whose favour the charge was made or security interest created may have thereunder; and 12.2 any legal proceedings that could have been continued or commenced by or against the migrating ICAV before its registration under this section may, notwithstanding the registration, be continued or commenced by or against the migrating ICAV after registration. 182

183 13. The migrating ICAV shall notify the Central Bank, within 3 days after the date of its deregistration in the relevant jurisdiction, of that de-registration. 14. On registration of the migrating ICAV under clause 8, the Central Bank shall forthwith authorise the migrating ICAV to carry on business under this Act. 15. If there is any material change in any of the information contained in the statutory declaration mentioned in sub-clause 3.4 of the definition of registration documents in clause 3 after the date of the declaration and before the date of the registration under this Schedule the director who made that statutory declaration, and any other director who becomes aware of that material change shall forthwith deliver a new statutory declaration to the Central Bank relating to the change. 16. If the migrating ICAV fails to comply with any provision of this Schedule, the Central Bank may send to the migrating ICAV by post a registered letter stating that, unless the migrating ICAV rectifies the failure within 1 month after the date of the letter and confirms that it has rectified the failure, a notice may be published in the Companies Registration Office Gazette with a view to striking the migrating ICAV off the register. 17. If the failure mentioned in clause 16 is not rectified within 1 month after date of the sending of the letter referred to in that subsection, the Central Bank may publish in the Companies Registration Office Gazette a notice stating that, at the expiration of 1 month after the date of that notice, the migrating ICAV mentioned therein will, unless the matter is resolved, be struck off the register, and the migrating ICAV will be dissolved. 18. At the expiration of the time mentioned in the notice, the Central Bank may, unless cause to the contrary is previously shown by the migrating ICAV, strike the ICAV off the register, and shall publish notice thereof in the Companies Registration Office Gazette, and on that publication, the migrating ICAV shall be dissolved. 183

184 Schedule 5 De-registration 1. This Schedule applies to an ICAV established and registered pursuant to this Act which applies to be de-registered in Ireland as an ICAV, for the purposes of this Schedule the applicant. 2. An applicant who proposes to be registered in a relevant jurisdiction by way of continuation as a body corporate may apply to the Central Bank to be de-registered in the State. 3. In this Schedule transfer documents means: 3.1 a statutory declaration of a director of the applicant made not more than 28 days before the date on which the application is made to the Central Bank to the effect that: the applicant will, upon registration, continue as a body corporate under the laws of the relevant jurisdiction; no petition or other similar proceeding to wind up or liquidate the applicant has been notified to the applicant and remains outstanding in any place, and no order has been notified to the applicant or resolution adopted to wind up or liquidate the applicant in any place; the appointment of a receiver, liquidator, examiner or other similar person has not been notified to the applicant and, at the date of the declaration, no such person is acting in that capacity in any place with respect to the applicant or its property or any part thereof; the applicant is not, at the date of the declaration, operating or carrying on business under any scheme, order, compromise or other similar arrangement entered into or made by the applicant with creditors in any place; the application for de-registration is not intended to defraud persons who are, at the date of the declaration, creditors of the applicant; 184

185 3.1.6 any consent or approval to the proposed de-registration required by any contract entered into or undertaking given by the applicant has been obtained or waived, as the case may be; and the de-registration is permitted by the instrument of incorporation and articles of the applicant; 3.2 a declaration of solvency prepared in accordance with the provisions of Schedule [6]; and 3.3 a copy of a special resolution of the applicant that approves the proposed deregistration and the transfer of the applicant to the relevant jurisdiction. 4. Where an application is made under clause 2, the Central Bank shall not de-register the applicant as an ICAV in the State unless it is satisfied that all of the requirements of this Act in respect of the de-registration and of matters precedent and incidental thereto have been complied with and, in particular, but without prejudice to the generality of the foregoing, he or she is satisfied that: 4.1 the applicant has delivered to the Central Bank an application for the purpose, in the prescribed form and signed by a director of the applicant, together with the transfer documents; 4.2 the applicant has paid the Central Bank Annual Levy imposed pursuant to section [ ] of this Act; and 4.3 the applicant has delivered to the Central Bank notice of any proposed change in its name and of its proposed registered office or agent for service of process in the relevant jurisdiction. 5. An application under this section shall be accompanied by a statutory declaration in the prescribed form made by a solicitor engaged for this purpose by the applicant, or by a director of the applicant, and stating that the requirements mentioned in clause 4 have been complied with. The Central Bank may accept such a declaration as sufficient evidence of compliance. 185

186 6. The Central Bank shall, as soon as is practicable after receipt of the application for deregistration, publish notice of it in the Companies Registration Office Gazette. 7. Where an application is made under clause 2, a person mentioned in clause 7 may apply to the court, on notice to the applicant, the Central Bank and all creditors of the applicant, not later than 60 days after the date of the publication of the notice under clause 6, for an order preventing the proposal or passage of a resolution specified in sub-clause 3.3 from taking effect in relation to the application, and the court may, subject to clause 8 make such an order accordingly. 7.1 The following persons may apply for an order under this clause: the holders of not less than 5 per cent of the issued share capital of the applicant and who have not voted in favour of the resolution, or any creditor of the applicant. 7.2 Notice of an application for an order under this clause may be given to the creditors concerned by publication in at least one national newspaper in the State. 7.3 The Central Bank and the applicant concerned shall each be entitled to appear and be heard on an application made pursuant to this clause. 8. The court may make an order under this clause 8 only if it is satisfied that: 8.1 the proposed de-registration of the applicant would contravene the terms of an agreement or arrangement between the applicant and any shareholder or creditor of the applicant; or 8.2 the proposed de-registration would be materially prejudicial to any shareholder or creditor of the applicant and the interests of shareholders and creditors or both taken as a whole would be materially prejudiced. 186

187 9. An order made under clause 8 shall specify the period in respect of which it shall remain in force. 10. An order of the court under clause 8 is final and conclusive. 11. Unless the court orders otherwise, when one or more than one application is made under clause 7, a resolution specified in sub-clause 3.3 shall not take effect until: 11.1 where the application or all the applications to the court are withdrawn: the day on which the resolution is passed; the day next following the day on which the last outstanding application is withdrawn; or the 31st day following the publication of the notice on the creditors under clause 7.2 whichever is the latest, and 11.2 where all applications to the court are not withdrawn: the day on which the resolution is passed; the day specified in the order or, if no date is specified in the order, the day next following the day on which the period for which the order is specified to remain in force expires or otherwise ceases to be in force; or the day next following the decision of the court, whichever is the latest. 12. When the applicant is registered as an ICAV under the laws of the relevant jurisdiction, it shall give notice to the Central Bank of that fact within 3 days after the date of its becoming so registered, including its new name, if any, and, as soon as practicable after receiving that notice, the Central Bank shall issue a certificate of de-registration of the applicant. 187

188 13. The Central Bank shall enter in the register of ICAVs the date of the de-registration of the applicant and shall, within 7 days after the date of issue of the certificate under clause 12 publish in the Companies Registration Office Gazette notice of the following matters: 13.1 the date of the de-registration of the applicant under this section; 13.2 the relevant jurisdiction; and 13.3 the new name of the applicant, if different from the name under which it was registered. 14. From the date of registration of the applicant in the relevant jurisdiction, it shall cease to be an ICAV for all purposes of this Act and shall continue for all purposes as a body corporate under the laws of the relevant jurisdiction, but this section does not operate: 14.1 to create a new legal entity; 14.2 to prejudice or affect the identity or continuity of the applicant as previously constituted under the laws of the State for the period that the applicant was so constituted; 14.3 to affect any contract made, resolution passed or any other act or thing done in relation to the applicant during the period that the applicant was constituted under the laws of the State; 14.4 to affect the rights, authorities, functions and liabilities or obligations of the applicant or any other person, or 14.5 to render defective any legal proceedings by or against the applicant. 15. Without prejudice to the generality of clause 14, any legal proceedings that could have been continued or commenced by or against the applicant before its de-registration under this section may, notwithstanding the de-registration, be continued or commenced by or against the applicant after registration. 188

189 Schedule 6 Declaration of Solvency 1. Where an application is made under Schedules [2, 3 or 4] a director of the converting ICAV, migrating ICAV or applicant, as the case may be, making the application shall make a statutory declaration stating that he or she has made a full inquiry into its affairs and has formed the opinion that the converting ICAV, migrating ICAV or applicant, as the case may be, is able to pay its debts as they fall due. 2. A declaration under clause 1 shall have no effect for the purposes of this section unless: 2.1 it is made not more than 28 days before the date on which the application is made to the Central Bank; 2.2 it contains a statement of the converting ICAV s, migrating ICAV s or applicant s assets and liabilities as at the latest practicable date before the making of the declaration, and, in any case, as at a date that is not more than 3 months before the date of the making of the declaration, and 2.3 a report made by an independent person under clause 3 is attached to the declaration, along with a statement by the independent person that he or she has given and has not withdrawn consent to the making of the declaration with the report attached to it. 3. The report mentioned in sub-clause 2.3 shall state whether, in the independent person s opinion, based on the information and explanations given to him or her, the opinion of the director mentioned in clause 1 and the statement of the migrating ICAV s or applicant s assets and liabilities referred to in sub-clause 2.2, are reasonable. 4. For the purposes of clause 3, the independent person shall be a person who, at the time the report is made, is; 4.1 in the case of an application under Schedule 2, qualified to be the auditor of the migrating ICAV under the laws of the relevant jurisdiction; and 4.2 in the case of an application under Schedule 1 and Schedule 3 qualified to be the statutory auditor of the applicant. 5. A director who makes a declaration under this section without having reasonable grounds for the opinion that the migrating ICAV or applicant is able to pay its debts as they fall due shall be guilty of a category 2 offence. 6. Where the converting ICAV, the migrating ICAV or applicant, as the case may be, is wound up within 1 year after the date on which the application is made to the Registrar and its debts are not paid or provided for in full within that year, it shall be presumed, unless the contrary is shown, that the director did not have reasonable grounds for his or her opinion 189

190 Schedule 7 Auditors 1. No person is eligible for appointment as auditor of an ICAV unless he is [eligible for appointment as a statutory auditor under Part 4 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 / Part X of the Companies Act, 1990] (1) A person is ineligible for appointment as auditor of an open-ended investment ICAV if he is: (a) (b) an officer or employee of the ICAV; or a partner or employee of such a person, or a partnership of which such a person is a partner. (2) For the purposes of sub-paragraph (1), an auditor of an ICAV is not to be regarded as an officer or employee of the ICAV. (3) A person is also ineligible for appointment if there exists between that person and the ICAV a connection of any such description as specified in Part 7 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations (1) No person is to act as auditor of an ICAV if he is ineligible for appointment to the office. (2) If during his term of office an auditor of an ICAV becomes ineligible for appointment to the office, he must thereupon vacate office and give notice in writing to the ICAV concerned that he has vacated it by reason of ineligibility. (3) A person who acts as auditor of an ICAV in contravention of sub-paragraph (1) or fails to give no-tice of vacating his office as required by sub-paragraph (2) is guilty of an offence and liable: (a) (b) on conviction on indictment, to a fine; on summary conviction, to a fine not exceeding the statutory maximum. (1) Every ICAV must appoint an auditor or auditors in accordance with this paragraph. (2) Subject to sub-paragraphs (7) and (8), an ICAV must, at each general meeting at which the ICAV's annual report is laid, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next general meeting at which an annual report is laid. (3) Subject to sub-paragraph (7), the first auditors of an ICAV may be appointed by the directors of the ICAV at any time before the first general meeting of the ICAV at which an annual report is laid; and auditors so appointed are to hold office until the conclusion of that meeting. 190

191 (4) Where no appointment is made under sub-paragraph (3), the first auditors of any ICAV may be appointed by the ICAV in general meeting. (5) On the date on which the holding of an annual general meeting is dispensed with in accordance with Section [22], any auditor or auditors appointed in accordance with sub-paragraph (2) or (3) ceases to hold office and the directors must forthwith re-appoint the auditor or auditors or appoint a new auditor or auditors. (6) The directors of any ICAV which does not hold annual general meetings must appoint the auditor or auditors. 5. If, in any case, no auditors are appointed as required in paragraph 4, the Central Bank may appoint a person to fill the vacancy (1) The directors of an ICAV, or the ICAV in general meeting, may fill a casual vacancy in the office of auditor. (2) While such a vacancy continues, any surviving or continuing auditor or auditors may continue to act. (1) Sub-paragraphs (2) to (5) apply to the appointment, as auditor of an ICAV, of a partnership constituted under the laws of Ireland, or under the law of any country or territory in which a partnership is not a legal person; and sub-paragraphs (3) to (5) apply to the appointment as such an auditor of a partnership constituted under the laws of Ireland, or under the law of any country or territory in which an partnership is a legal person. (2) The appointment is, unless the contrary intention appears, an appointment of the partnership as such and not of the partners. (3) Where the partnership ceases, the appointment is to be treated as extending to: (a) (b) any partnership which succeeds to the practice of that partnership and is eligible for the appoint-ment; and any person who succeeds to that practice having previously carried it on in partnership and is eligible for the appointment. (4) For this purpose a partnership is to be regarded as succeeding to the practice of another partnership only if the members of the successor partnership are substantially the same as those of the former partnership; and a partnership or other person is to be regarded as succeeding to the practice of a partnership only if it or he succeeds to the whole or substantially the whole of the business of the former partnership. (5) Where the partnership ceases and no person succeeds to the appointment under sub-paragraph (3), the appointment may with the consent of the ICAV be treated as extending to a partnership or other person eligible for the appointment who succeeds to the business of the former partnership or to such part of it as is agreed by the ICAV to be treated as comprising the appointment. (1) The auditors of an ICAV have a right of access at all times to the ICAV's books, accounts and vouchers and are entitled to require from the ICAV's officers such 191

192 information and explanations as they think necessary for the performance of their duties as auditors. (2) An officer of an ICAV commits an offence if he knowingly or recklessly makes to the ICAV's auditors a statement (whether written or oral) which: (a) (b) conveys or purports to convey any information or explanations which the auditors require, or are entitled to require, as auditors of the ICAV; and is misleading, false or deceptive in a material particular. (3) A person guilty of an offence under sub-paragraph (2) is liable: (a) (b) on conviction on indictment, to imprisonment not exceeding a term of two years or to a fine or to both; on summary conviction, to imprisonment not exceeding a term of three months or to a fine not exceeding the statutory maximum or to both. (1) The auditors of an ICAV are entitled: (a) (b) (c) to receive all such notices of, and other communications relating to, any general meeting of the ICAV as a shareholder of the ICAV is entitled to receive; to attend any general meeting of the ICAV; and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditors. (2) The right to attend and be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting. (1) The remuneration of auditors of an ICAV who are appointed by the ICAV in general meeting must be fixed by the ICAV in general meeting or in such manner as the ICAV in general meeting may decide. (2) The remuneration of auditors who are appointed by the directors or the Central Bank must, as the case may be, be fixed by the directors or the Central Bank (and be payable by the ICAV even where it is fixed by the Central Bank). (1) Subject to sub-paragraph (2), the power of the Competent Authority to ensure that its standards include provisions in respect of statutory audit fees [section 75 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010] (Restrictions with regard to fees) is to be exercisable in relation to auditors of ICAVs: (a) for like purposes; and (b) subject to the same conditions. (2) For the purposes of Section 161D of the Companies Act 1963 as amended by Regulation 62 of the European Communities (Statutory Audits) (Directive 192

193 /43/EC) Regulations 2010] a note to an ICAV's accounts is to be taken to be a reference to the annual report of an open-ended investment ICAV. (1) An ICAV may by resolution remove an auditor from office notwithstanding anything in any agreement between it and him. (2) Where a resolution removing an auditor is passed at a general meeting of an ICAV, the ICAV must, not later than 14 days after the holding of the meeting, notify the Central Bank of the passing of the resolution. (3) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor. (1) A resolution at a general meeting of an ICAV: (a) (b) removing an auditor before the expiration of his period of office; or appointing as auditor a person other than the retiring auditor; is not effective unless notice of the intention to move it has been given to the open-ended investment ICAV at least 28 days before the meeting at which it is moved. (2) On receipt of notice of such an intended resolution, the ICAV must forthwith send a copy to the person proposed to be removed or, as the case may be, to the person proposed to be appointed and to the retiring auditor. (3) The auditor proposed to be removed or, as the case may be, the retiring auditor may make with respect to the intended resolution representations in writing to the ICAV (not exceeding a reasonable length) and request their notification to the shareholders of the ICAV. (4) The ICAV must (unless the representations are received by the ICAV too late for it to do so)-- (a) (b) in any notice of the resolution given to the shareholders of the ICAV, state the fact of the representations having been made; send a copy of the representations to each of the shareholders whose name appears on the register of shareholders and to whom notice of the meeting is or has been sent; (5) If a copy of any such representations is not sent out as required because they were received too late or because of the ICAV's default or if, for either of those reasons, any steps required by sub-paragraph (4)(c) or (d) are not taken, the auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting. (6) Copies of the representations need not be sent out, the steps required by subparagraph (4)(c) or (d) need not be taken and the representations need not be read out at the meeting if, on the application of the ICAV or any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court 193

194 may order the costs of the ICAV on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application. (1) An auditor who has been removed from office has, notwithstanding his removal, the rights conferred by paragraph 9 in relation to any general meeting of the ICAV at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his removal. (2) The reference in paragraph 9 to business concerning the auditors as auditors is to be construed in relation to an auditor who has been removed from office as a reference to business concerning him as former auditor. (1) An auditor of an ICAV may resign his office by depositing a notice in writing to that effect at the ICAV's head office. (2) Such a notice is not effective unless it is accompanied by the statement required by paragraph 18. (3) An effective notice of resignation operates to bring the auditor's term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it. (4) The ICAV must, not later than 14 days after the deposit of a notice of resignation, send a copy of the notice to the Central Bank. (1) This paragraph applies where a notice of resignation of an auditor is accompanied by a statement of circumstances which he considers ought to be brought to the attention of the shareholders or creditors of the ICAV. (2) An auditor may deposit with the notice a signed requisition that a general meeting of the ICAV be convened forthwith for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting. (3) The ICAV must, not later than 21 days after the date of the deposit of a requisition under this paragraph, proceed to convene a meeting for a day not later than 28 days after the date on which the notice convening the meeting is given. (4) The auditor may request the ICAV to circulate a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation to each of the shareholders of the ICAV whose name appears on the register of shareholders (other than the designated person): (a) (b) before the meeting convened on his requisition; or before any general meeting at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his resignation. (5) The ICAV must (unless the statement is received by it too late for it to do so): (a) in any notice or advertisement of the meeting given or made to shareholders of the ICAV, state the fact of the statement having been made; and 194

195 (b) send a copy of the statement to every shareholder of the ICAV to whom notice of the meeting is or has been sent (6) If a copy of the statement is not sent out or provided as required because it was received too late or because of the ICAV's default the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting. (7) Copies of a statement need not be sent out or provided and the statement need not be read out at the meeting if, on the application of the ICAV or any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the ICAV on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application. (1) An auditor who has resigned has, notwithstanding his removal, the rights conferred by paragraph 9 in relation to any such general meeting of the ICAV as is mentioned in paragraph 16(4)(a) or (b). (2) The reference in paragraph 9 to business concerning the auditors as auditors is to be construed in relation to an auditor who has resigned as a reference to business concerning him as former auditor. (1) Where an auditor ceases for any reason to hold office, he must deposit at the head office of the ICAV a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the attention of the shareholders or creditors of the ICAV or, if he considers that there are no such circumstances, a statement that there are none. (2) The statement must be deposited: (a) (b) (c) in the case of resignation, along with the notice of resignation; in the case of failure to seek re-appointment, not less than 14 days before the end of the time allowed for next appointing auditors; and in any other case, not later than the end of the period of 14 days beginning with the date on which he ceases to hold office. (3) If the statement is of circumstances which the auditor considers should be brought to the attention of the shareholders or creditors of the ICAV, the ICAV must, not later than 14 days after the deposit of the statement, either: (a) (b) send a copy of the statement to each of the shareholders whose name appears on the register of shareholders (other than the designated person) ; or apply to the court; and, where an application is made under sub-paragraph (b), the ICAV must notify the auditor. (4) Unless the auditor receives notice of an application to the court before the end of the period of 21 days beginning with the day on which he deposited the statement, 195

196 he must, not later than seven days after the end of that period, send a copy of the statement to the Central Bank. (5) If the court is satisfied that the auditor is using the statement to secure needless publicity for defamatory matter: (a) (b) it must direct that copies of the statement need not be sent out and that the steps required by Bank rules need not be taken; and it may further order the ICAV's costs on the application to be paid in whole or in part by the auditor notwithstanding that he is not a party to the application; and the ICAV must, not later than 14 days after the court's decision, take such steps in relation to a statement setting out the effect of the order as are required by sub-paragraph (3)(a) in relation to the statement deposited under subparagraph (1). (6) If the court is not so satisfied, the ICAV must, not later than 14 days after the court's decision, send to each of the shareholders a copy of the auditor's statement and notify the auditor of the court's decision. (7) The auditor must, not later than 7 days after receiving such a notice, send a copy of the statement to the Central Bank. (8) Where notice of appeal is filed not later than 14 days after the court's decision, any reference to that decision in sub-paragraphs (5) and (6) is to be construed as a reference to the final determination or withdrawal of that appeal, as the case may be. (1) If a person ceasing to hold office as auditor fails to comply with paragraph 18 he is guilty of an offence and liable: (a) (b) on conviction on indictment, to a fine; on summary conviction, to a fine not exceeding the statutory maximum. (2) In proceedings for an offence under sub-paragraph (1), it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence. Chapter 3 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 (Withdrawal of approval) applies in relation to auditors of ICAVs. Explanatory Note: Eligibility. 1. This head sets out the requirements to be met by a proposed auditor in order to be considered eligible for appointment to an ICAV. These requirements are based on those set out in European regulations. 196

197 Eligibility. 2. This head sets out the limitations on the relationship between auditor and ICAV in order to be considered eligible to be appointed as auditor to the ICAV (e.g. the auditor must not be an officer or employee of the ICAV). Eligibility. 3. This head clarifies that an auditor is required to vacate it term of office if hit is deemed ineligible subsequent to appointment. Failure to vacate in these circumstances is an offence. Equivalent to Schedule 5(3) of the OEIC Regulations. Regarding summary conviction and the fine not exceeding the statutory minimum, per Article 65 of Stat Audits Regs 2010, if not registered but continues to act - (3) A person who contravenes paragraph (1) is guilty of an offence and is liable: (a) on summary conviction, to a fine not exceeding 5,000, or (b) on conviction on indictment, to a fine not exceeding 50,000. Appointment. 4. Every ICAV must appoint an auditor which complies with the requirements of this section. It is highlighted that an auditor must be appointed at each general meeting of the ICAV at which the annual report is presented. Appointment. 5. The Central Bank has the power to appoint an auditor where none has been appointed by the ICAV. Appointment. 6. Appointment. 7. This head clarifies the position where the entity performing the role of auditor is formed as a partnership, and the differing treatment of partnerships in certain jurisdictions, i.e. whether or not the partnership is considered to be a legal person. It clarifies that the appointment of an auditor constituted as a partnership, equates to the appointment of the partnership as a whole and not the partners individually. Rights. 8. This head lays out the usual rights of access of the auditor to required information in order to perform its duties. For example, access must be granted to the ICAV s books and accounts, and further the officers of the ICAV are required to provide information and explanation to the auditor when required. This head creates an offence where an officer of the ICAV presents false, misleading or deceptive information. Rights. 9. The auditors to the ICAV may request to receive all the communications and notices that a shareholder receives in respect of upcoming general meetings. Further the auditor is entitled to 197

198 attend any general meeting and may speak at that meeting in relation to business that concerns the auditor. Remuneration. 10. The level of remuneration of auditors must be decided in a general meeting. This level may be fixed by the ICAV or the Central Bank. Remuneration. 11. Removal. 12. An ICAV may pass a resolution to remove an auditor from office. The Central Bank should be notified in this respect. Rights on removal or nonreappointment. 13. If the ICAV wishes to remove an auditor before the end of its term of office, or to appoint a new auditor the Central Bank require notice of at least 28 days before the date of the meeting at which this is resolved. This head also sets out certain stipulations in respect of the provision of this notice, and also allows the auditor being removed to make certain representations to ICAV in relation to its removal. 198

199 Schedule 8 Contents of Annual Report Statement of Net Assets 1 Statement of Net Assets Assets Fair Value Investments in securities (cost ) X Financial derivatives X Cash X Deposits with brokers X Receivables X Total Assets X ========= Liabilities Securities sold (proceeds ) X Financial derivatives X Due to broker X Payables X Total liabilities X ========= Net Assets Equivalent to per share based on Y shares outstanding ========= X The accompanying notes are an integral part of these financial statements. Statement of Operations 2 Statement of Operations Investment Income Dividends (net of foreign withholding taxes) X Interest X X ========= 199

200 Expenses Investment management fees Performance fees Professional fees Custodian and transfer agent fees Directors fees Audit fees Other Less: fees waived Net expenses X X X X X X X X X ========= Realised and unrealised gains/losses from investments and foreign currency Realised and unrealised gains/losses From financial derivatives X X The accompanying notes are an integral part of these financial statements. Statement of Changes in Net Assets 3 Statement of changes in net assets Increase in net assets from operations Distributable to shareholders X X Notes to the Financial Statements Net assets Beginning of year End of year 4 1) Significant accounting policies; 2) Securities valuations; 3) Derivative transactions; 4) Income taxes; 5) Leverage; 6) Share capital transactions; and 7) Fees. X X 200

201 201