The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012
These Regulations amend provisions in Part 23 of the Companies Act 2006 (c. 46) (“the Act”) which deal with distributions by investment companies out of revenue profits. Those provisions take partial advantage of an option in Article 15(4) of Council Directive 77/91/EEC (OJ L26, 31.1.1977, p.1) (“the Directive”). Among other things, the Directive prohibits a public company from making a distribution to its shareholders if the company’s net assets are (or following the distribution would become) lower than the aggregate amount of its called-up share capital and undistributable reserves. But Article 15(4) allows Member States not to apply this rule to certain investment companies, so long as particular conditions are met. Sections 832 to 835 of the Act take partial advantage of this option to derogate. They impose conditions and requirements which must be met by investment companies wishing to take advantage of the modified distributions regime.