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Repealed by LN. 2013/198 as from 1.1.2014 - page 56 / 94

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1989-47

Financial Services (Investment and Fiduciary Services)

Repealed Subsidiary 2007/002

FINANCIAL SERVICES (CAPITAL ADEQUACY OF INVESTMENT

FIRMS) REGULATIONS 2007 general) of 32 %. Without prejudice to the provisions of the fourth sub- paragraph of paragraph 2.1 of Schedule 3 or the sixth sub-paragraph of paragraph 12 of Schedule 5 (commodity risk) taken together with the fourth sub-paragraph of paragraph 2.1 of Schedule 3, where the modified gold treatment set out in those paragraphs is used, positions in CIUs shall be subject to a capital requirement for position risk (specific and general) and foreign-exchange risk of no more than 40 %.

49. Investment firms may determine the capital requirement for positions in CIUs which meet the criteria set out in paragraph 51, by the methods set out in paragraphs 53 to 56.

50.

Unless noted otherwise, no netting shall be permitted between the

underlying firm.

investments

of a

CIU

and

other

positions

held

by the investment

GENERAL CRITERIA

51. The general eligibility criteria for using the methods in paragraphs 53 to 56, for CIUs issued by companies supervised or incorporated within the EEA are that

  • (a)

    the CIU’s prospectus or equivalent document shall include:

    • (i)

      the categories of assets the CIU is authorised to invest in;

    • (ii)

      if investment limits apply, the relative limits and the

methodologies to calculate them;

  • (iii)

    if leverage is allowed, the maximum level of leverage; and

  • (iv)

    if investment in OTC financial derivatives or repo-style transactions are allowed, a policy to limit counter party risk arising from these transactions;

  • (b)

    the business of the CIU shall be reported in half-yearly and annual reports to enable an assessment to be made of the assets and liabilities, income and operations over the reporting period;

  • (c)

    the units/shares of the CIU are redeemable in cash, out of the undertaking’s assets, on a daily basis at the request of the unit holder;

(d)

investments in the CIU shall be segregated from the assets of the CIU manager; and

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

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