IFM17345 - Condition C: Limit on capacity to receive further investments

Regulation 9A(7) SI2006/964, Regulation 76(2) SI2009/3001 and paragraph 15(7) FA03/Sch7A

It is recognised that there will be times where a fund reaches a limit on its capacity to receive further investments. This could be the case where, for example, the time limit for the fund to raise capital has expired or a financial cap has been reached.

In this case the fund will be treated as meeting Condition C even though the scheme may not be marketed or made available unless and until there is further capacity to do so.

There is an exception to this where:

• the capacity of the fund to accept investments is fixed; and
• the fund limits investment to a number of pre-determined specific investors or specific group of connected investors who buy all or substantially all of the interests or units in the fund.

In this case, Condition C will not be met or treated as met.

This exception is not intended to prevent pre-launch marketing of a fund, but a fund should retain evidence that a range of investors in the target market have had the opportunity to invest in case access to the fund becomes temporarily limited.

This provision applies for all purposes where a GDO condition is used, including the QAHC, REIT and NRCG rules.