ADVOKS GLOBAL · KENYA
The Capital Markets (Collective Investments Schemes) Regulations, 2023
94. Charges on redemption
Edition: 2023-12-15 · In force
94. Charges on redemption
(1)Where the incorporation documents so permits, the amount payable as proceeds of redemption may be arrived at after deduction of a charge for the benefit of the fund manager.(2)Where the fund manager is permitted to make a deduction, the amount shall not exceed the amount that would be derived by applying the rate or method prescribed in the information memorandum at the date on which the relevant participatory interests were issued.(3)Where the incorporation documents of a scheme, whenever executed, are modified so as to include the provision enabled by paragraph 13 of Second Schedule of the Regulations, to deduct a charge on redemption, the modification must be expressed so as to apply only to participatory interests issued after the date on which the modification takes effect.(4)A modification of the rate or method which is adverse to redeeming participatory interest, holders must be limited so as to apply only to participatory interests which have been issued, whether at the request of the current participatory interest holder or otherwise, after the date on which the modification takes effect.(5)Subject to regulation 95, the fund manager may not rely on any increase in the rate or method of the charge, unless—(a)it has given notice in writing of that increase and of the date of its commencement to the trustee and to all the persons who ought reasonably to be known to him or her to have made an arrangement for the purchase of participatory interests at regular intervals;(b)he or she has revised the information memorandum to reflect the new rate or method and the date of its commencement; and(c)approved by the holders of the participatory interest.(6)In deciding whether and to what extent a charge is deductible for the purposes of this regulation, participatory interests held by a participant are to be taken to be redeemed in the order in which they were issued (whether at the request of the current holder or otherwise), unless—(a)the fund manager has the participant’s instructions to the contrary;(b)the fund manager selects as the participatory interests first to be redeemed, participatory interests which are not subject to the deduction; or(c)the fund manager and the trustee have agreed on another way of deciding the order in which participatory interests are redeemed, which appears to them unlikely materially to prejudice the holder concerned.(7)For purposes of subregulations (3) and (6), where a scheme has absorbed the whole or part of the property of an earlier scheme, the term "issued", for the purposes of calculating the applicable charge refers to the date on which participatory interests in the earlier scheme were issued in so far as it is practicable for the fund manager to ascertain the timing of that issue in relation to the issue of other participatory interests held by that participant.(8)Nothing in this regulation shall enable the fund manager to reduce the amount payable to the client on redemption to an extent which might reasonably be regarded as fettering the right of redemption.