Currently, although the Prospectus Rules require investment funds seeking admission to the Official List to state in their prospectuses that they have sufficient working capital for their present requirements (or, if not, how they propose to raise such capital), the Listing Rules do not require them, as a condition for listing, to have sufficient working capital for at least 12 months – (in contrast to the position for trading companies).

The FSA proposes to impose such a condition. Sponsors of investment companies, as well as trading companies, will therefore be required to give a confirmation to the FSA that they are satisfied that, after due and careful enquiry, the directors have a reasonable basis for making the working capital statement required by the Prospectus Rules. The work required by a sponsor to enable it to make this confirmation (for example, whether accountants’ reports are required to be commissioned) will be up to the sponsor but it is expected that the current practice of preparing a short form Board memorandum will suffice for most newly incorporated investment funds. 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.