Investment Trust Contract for the United Kingdom

Investment Trust Contract Template for England and Wales

An Investment Trust Contract under English and Welsh law establishes the legal framework for a collective investment scheme structured as a trust. It defines the relationships between trustees, investment managers, and beneficiaries, while setting out investment objectives, powers, and restrictions. The document ensures compliance with UK financial services regulations, including FCA requirements and the Financial Services and Markets Act 2000.

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What is a Investment Trust Contract?

The Investment Trust Contract is a fundamental document used when establishing a collective investment scheme in England and Wales. It serves as the governing document that outlines the trust's structure, investment objectives, and operational framework. This contract type is essential for investment vehicles seeking to pool investor funds while maintaining regulatory compliance with UK financial services laws. It includes detailed provisions on investment powers, risk management, fee structures, and reporting requirements, while ensuring alignment with FCA regulations and the Trustee Act 2000.

What sections should be included in a Investment Trust Contract?

1. Parties: Identification of trustee, investment manager, and other key parties

2. Background: Purpose of the trust and investment objectives

3. Definitions: Key terms used throughout the agreement

4. Trust Structure: Legal structure and governance framework

5. Investment Powers and Restrictions: Scope of permitted investments and limitations

6. Management Responsibilities: Duties and obligations of the investment manager

7. Fees and Expenses: Management fees, operational costs, and expense allocation

8. Reporting Requirements: Financial reporting and disclosure obligations

What sections are optional to include in a Investment Trust Contract?

1. Share Classes: Details of different share classes when multiple share classes are offered

2. Distribution Policy: Rules for income distribution, applicable for income-generating trusts

3. ESG Considerations: Environmental, social, and governance criteria for ESG-focused investments

What schedules should be included in a Investment Trust Contract?

1. Investment Guidelines: Detailed investment parameters and restrictions

2. Fee Schedule: Detailed breakdown of all fees and charges

3. Valuation Rules: Methodology for asset valuation

4. Service Providers: List of key service providers and their roles

5. Risk Factors: Detailed description of investment risks

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Financial Services and Markets Act 2000: Primary legislation that establishes the regulatory framework and sets out requirements for authorized investment funds

Companies Act 2006: Core legislation governing corporate structure and governance, relevant for trust company formation and operation

Trustee Act 2000: Defines trustees' general powers and duties, including investment powers and responsibilities

Trust Registration Service Requirements: Requirements under Money Laundering Regulations for trust registration and compliance

FCA Handbook: Regulatory framework including COLL (Collective Investment Schemes sourcebook), FUND (Investment Funds sourcebook), and PRIN (Principles for Businesses)

Listing Rules: UK Listing Authority requirements and London Stock Exchange regulations for listed investment trusts

Income Tax Act 2007: Tax legislation governing income tax treatment of investment trusts

Corporation Tax Act 2010: Tax legislation governing corporate tax aspects of investment trusts

Taxation of Chargeable Gains Act 1992: Legislation governing capital gains tax treatment in investment trusts

Alternative Investment Fund Managers Directive: EU-derived regulation governing alternative investment fund managers and their operations

Market Abuse Regulation: Regulations preventing market abuse and maintaining market integrity

UK Corporate Governance Code: Set of principles of good corporate governance for listed companies and investment trusts

Investment Association Guidelines: Industry standards and best practices for investment trust operations and governance

Teams

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