Draft Open-Ended Investment Companies Regulations 2001

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Miss Johnson: I echo the hon. Member for Arundel and South Downs (Mr. Flight) in welcoming you, albeit belatedly, to the Chair, Mr. Sayeed. I enjoyed his remarks as much as I enjoyed his recent comments on missing plurals and typographical errors in other regulations. It is a joy to know how closely he has read the regulations that we have sent out.

The different dates on which the regulations will come into force allow applications for the authorisation of OEICs for a period in advance of N2. As I said recently in Committee, N2 will be no later than the end of November of this year. Although the FSA will not be able to authorise OEICs before N2, the provisions will enable applications to be dealt with as efficiently as possible. We anticipate that they will enable both the FSA and providers to be ready for N2 when it occurs. That should reassure the hon. Gentleman.

Mr. Flight: That is absolutely right, but, once the regulations have been approved, is there any possibility of the date being announced of when businesses can get going with the FSA?

Miss Johnson: As the hon. Gentleman will know, that is a matter for the FSA. We all know that N2 will be no later than the end of November, so it is not too long to wait, and I trust that discussions will continue between the industry and the FSA to ensure that both the FSA and providers will be ready for N2.

The hon. Gentleman mentioned the extension of the temporary exemption from stamp duty and stamp duty reserve tax. The Government announced in 1998 that the temporary exemption would continue for 12 months after the introduction of the new regulations. They will come into force fully on N2 and, as such, the exemption will continue to be available for 12 months from that date. I understand that there might be uncertainty on that point and I hope that that clarifies it. Temporary exemptions apply only to the merger of unified unit trusts into an OEIC. Ultimately, there is no need for the exemption to persist.

Feeder funds are presently permitted only for personal pensions and are inappropriate for OEICs. Having said that, we intend to review the use of feeder funds and the industry will be involved in any discussions. I am grateful to the hon. Gentleman for raising that point.

Finally, the hon. Gentleman was interested in use of the term ICVC for an investment company with variable capital. The term OEICs is used in the Act, so it is appropriate to use it in the regulations. Ultimately, it is a matter for the FSA to decide what terminology should be used in its source book and I cannot really comment beyond that.

I hope that I have answered the hon. Gentleman's questions and that the Committee will support the regulations.

Question put and agreed to.


    That the Committee has considered the draft Open-Ended Investment Companies Regulations 2001.

        Committee rose at fifteen minutes to Five o'clock.

The following Members attended the Committee:
Sayeed, Mr. Jonathan (Chairman)
Allen, Mr.
Flight, Mr.
Healey, Mr.
Hesford, Mr.
Jack, Mr.
Johnson, Miss Melanie
Luff, Mr.
Ross, Mr. Ernie
Southworth, Ms
Williams, Mrs. Betty
Worthington, Mr.

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