Currently, an investment entity is only permitted to list without having a three-year track record if it can satisfy the FSA that its directors and investment managers have sufficient and satisfactory experience in the management of investments of the type in which the company proposes to invest.

The FSA proposes that the requirement for sufficient and satisfactory experience should apply to Closed-ended Investment Funds, whether or not the fund has a three-year track record. However, to the extent the management of the fund’s assets will be undertaken by an independent manager authorised to manage investments by the FSA or another competent authority (for overseas entities), this requirement will be met. This welcome change will mean that most Closed-ended Investment Funds will automatically meet this requirement easily.

Where the management of the fund is not undertaken by an independent, authorised investment manager, the persons responsible for management of the fund’s assets will need to have at least three years’ experience of managing a portfolio of assets which is comparable (interpreted as having a value of at least 50 per cent of the value of the fund’s assets) to the fund’s portfolio. This publication is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to a particular matter.