Choosing investmentsN.I.
36.—[F1(1) The trustees of a trust scheme must exercise their powers of investment in accordance with regulations and in accordance with paragraphs (3) and (4), and any fund manager to whom any discretion has been delegated under Article 34 must exercise the discretion in accordance with regulations.
(1A) Regulations under paragraph (1) may, in particular—
(a)specify criteria to be applied in choosing investments, and
(b)require diversification of investments.]
Para. (2) rep. by 2005 NI 1
(3) Before investing in any manner (other than in a manner mentioned in Part I of Schedule 1 to the Trustee Investments Act 1961F2) the trustees must obtain and consider proper advice on the question whether the investment is satisfactory having regard to[F1 the requirements of regulations under paragraph (1), so far as relating to the suitability of investments, and to] the principles contained in the statement under Article 35.
(4) Trustees relating any investment must—
(a)determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as is mentioned in paragraph (3), and
(b)obtain and consider such advice accordingly.
(5) The trustees, or the fund manager to whom any discretion has been delegated under Article 34, must exercise their powers of investment with a view to giving effect to the principles contained in the statement under Article 35, so far as reasonably practicable.
(6) For the purposes of this Article, “proper advice” means—
[F3(a)if the giving of the advice constitutes the carrying on, in the United Kingdom, of a regulated activity (within the meaning of the Financial Services and Markets Act 2000), advice given by a person who may give it without contravening the prohibition imposed by section 19 of that Act (prohibition on carrying on regulated activities unless authorised or exempt);]
(b)in any other case, the advice of a person who is reasonably believed by the trustees to be qualified by his ability in and practical experience of financial matters and to have the appropriate knowledge and experience of the management of the investments of trust schemes.
(7) Trustees shall not be treated as having complied with paragraph (3) or (4) unless the advice was given or has subsequently been confirmed in writing.
[F1(8) If the trustees of a trust scheme—
(a)fail to comply with regulations under paragraph (1), or
(b)do not obtain and consider advice in accordance with this Article,
Article 10 applies to any trustee who has failed to take all reasonable steps to secure compliance.]
[F1(9) Regulations may exclude the application of any of the preceding provisions of this Article to any scheme which is of a prescribed description.]