Investment Trust Contract Template for England and Wales

An Investment Trust Contract is the cornerstone legal document for establishing and operating collective investment schemes in England and Wales. This comprehensive agreement governs how multiple investors pool their funds together, creating a structured investment vehicle that operates under strict regulatory oversight while pursuing defined investment objectives.

When do you need this document?

You need an Investment Trust Contract when launching any collective investment scheme that pools investor capital for professional management. This includes establishing unit trusts, investment trusts, or other authorised investment funds that will be marketed to UK investors. The document is essential when setting up pension schemes, insurance funds, or specialised investment vehicles like real estate investment trusts. You also require this contract when restructuring existing investment arrangements or seeking FCA authorisation for a new collective investment scheme. Additionally, this document becomes necessary when establishing cross-border investment structures that will operate within the UK regulatory framework.

Key legal considerations

The contract must clearly define the roles and responsibilities of all parties, particularly the trustee's fiduciary duties and the investment manager's discretionary powers. Investment restrictions and permitted asset classes require precise definition to ensure regulatory compliance and protect investor interests. Fee structures, including management charges, performance fees, and operational expenses, must be transparently disclosed and legally binding. The document should establish robust governance frameworks, including oversight mechanisms, reporting requirements, and investor protection measures. Risk management provisions must address market risks, operational risks, and regulatory compliance risks. Termination clauses should specify the circumstances under which the trust may be wound up and how assets will be distributed to unit holders.

Legal requirements in England and Wales

Under the Financial Services and Markets Act 2000, investment trusts must obtain proper authorisation from the Financial Conduct Authority before commencing operations. The contract must comply with the FCA Handbook, particularly the COLL sourcebook for collective investment schemes and the FUND sourcebook for investment funds. Trustee appointments must satisfy the requirements of the Trustee Act 2000, ensuring appropriate investment powers and duties are properly defined. The document must incorporate Money Laundering Regulations requirements through Trust Registration Service compliance measures. For listed investment trusts, additional compliance with UK Listing Authority requirements and London Stock Exchange regulations is mandatory. The contract must also address Companies Act 2006 provisions where the investment trust operates through a corporate structure, ensuring proper governance and shareholder protection mechanisms are in place.