New Clause 285

Company Law Reform Bill [Lords] – in a Public Bill Committee at 1:45 pm on 20th July 2006.

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Meaning of “investment company”

‘(1) In this Part an “investment company” means a public company that—

(a) has given notice (which has not been revoked) to the registrar of its intention to carry on business as an investment company, and

(b) since the date of that notice has complied with the following requirements.

(2) Those requirements are—

(a) that the business of the company consists of investing its funds mainly in securities, with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds;

(b) that the condition in section (Investment company: condition as to holdings in other companies) is met as regards holdings in other companies;

(c) that distribution of the company’s capital profits is prohibited by its articles of association;

(d) that the company has not retained, otherwise than in compliance with this Part, in respect of any accounting reference period more than 15% of the income it derives from securities.

(3) Subsection (2)(c) does not require an investment company to be prohibited by its articles from redeeming or purchasing its own shares in accordance with Chapter (Redeemable shares) or (Purchase of own shares) of Part (Acquisition by limited company of its own shares) out of its capital profits.)

(4) Notice to the registrar under this section may be revoked at any time by the company on giving notice to the registrar that it no longer wishes to be an investment company within the meaning of this section.

(5) On giving such a notice, the company ceases to be such a company.’.—[Margaret Hodge.]

Brought up, and added to the Bill.