Little Phoenix Investment Club

Little Phoenix Investment Fund                                                Take me back

Rules

1.) Affairs of the Fund

The affairs of the fund shall be conducted in accordance with the letter and spirit of the constitution laid down by the committee. The constitution may only be changed by written agreement of the committee.

2.) Officers

The affairs of the fund shall be managed by the committee –honorary chairperson, honorary secretary and honorary treasurer – who shall remain fixed. The vice chairperson, vice secretary, vice treasurer, auditors, compliance officers and other officers as required by the fund shall be elected by majority resolution (≥75%) of all members of the fund attending the annual general meeting of the fund. These officers shall resign at the following annual general meeting but shall be eligible for re-election. If an officer should leave the fund, die or otherwise be unable to continue to carry out their duties, a replacement may be elected (majority resolution of ≥75% of all the members of the fund) at a subsequent ordinary meeting of members. Other officers may be elected from time to time to assist the officers by a majority resolution of ≥75% of all the members of the fund.

3.) Meetings

a.) In each year there shall be a minimum of six meetings held and one annual general meeting, at which all members shall be entitled to be present and to vote on all investments and matters affecting their unit holdings. All members have equal voting power on all investment affairs of the fund.

b.) Dates and venues of meetings may be varied in accordance with a resolution supported by a majority resolution (≥75%) of those attending a properly constituted meeting of the fund. Such resolutions and all others must be carried at a meeting where there is a quorum comprising of more than half of the current membership.

c.) All members shall be given at least 2 days notice of dates and venues of meetings.

d.) A special general meeting may be convened by not less than the full committee for the purposes of resolving special items of fund business subject to a written request being submitted to the honorary secretary who will without undue delay then give at least 21 days notice to all members.

4.) Election of New Members

a.) The joining of a new member is conditional upon there being no objection from the committee at the meeting at which the application is considered.

b.) A prospective member must be proposed at a monthly meeting of the fund. Subject to acceptance by the committee the name, address, telephone number and email address of the prospective member will be included in the minutes which will be circulated to all members prior to the next meeting.

c.) The fund reserves the right to refuse admission to any person without giving a reason.

d.) On admission to the fund, a new member will sign an agreement (New Member Agreement) accepting all responsibilities associated with membership. The new member shall pay the registration fee of £75, initial lump-sum subscription based on membership type and the first month’s subscription £25 minimum. These sums will purchase for the new member a number of units calculated according to fund rules and the unit value prevailing at the time of joining as calculated by the honorary treasurer and agreed by the committee, under the Unit Value System (UVS).

5.) Withdrawal of Membership

a.) A member shall cease to be a member of the fund if there is a contravention of Clause 16.) of the constitution.

b) If a member should die or cease to be a member for any reason, the fund shall pay to the member or to persons entitled by law an amount equal to the former member’s share in the assets of the fund as defined in the rules of the fund clause 11.) C.) and 11.) D.).

6.) Initial Lump Sum Subscription

a.) All members will purchase £975 of units minimum which will rank on par with monthly subscriptions in that it will purchase for that member an appropriate number of units according to the unit value at the time of joining as calculated by the honorary treasurer and agreed by the committee under the Unit Value System (UVS).

b.) All members must pay a registration fee of £75 which is non refundable. This amount will not contribute to the member’s capital account and units. This amount is for contribution towards administration costs and expenses relating to the funds activities.   

c.) The above fees may be varied by alteration of the rules of the fund. The alteration of the rules of the fund must be in accordance with clause 4.) of the constitution of the fund.

7.) Subscriptions

a.) Each member shall arrange that their monthly subscription of £25 minimum (and initial lump sum subscription) shall be paid into the fund’s bank/building society account on or before the 1st day of each month by means of a standing order from a bank or building society.

b.) Each member’s subscription will purchase for that member an appropriate number of units according to the unit value declared at the monthly meeting preceding the date when the subscription was paid, subject to fund brokerage if such should be in force at that time. This is calculated by the honorary treasurer and agreed by the committee.

c.) The treasurer shall notify members at their monthly meeting if any member is in arrears.

d.) The monthly subscription and the level of the fund brokerage fee may be varied by alteration of the rules of the fund. The alteration of the rules of the fund must be in accordance with clause 3 of the constitution of the fund.

8.) The Unit Value System (UVS), Fees and Charges

a.) The UVS is defined as the net assets of the fund (all assets including cash less fees, charges, brokerage costs and administration expenses) divided by the total number of units issued to date to all members, as calculated by the honorary treasurer and agreed by the committee.

b.) All members units and investment returns per annum are subject to a fee of 1.5 % when return on investments per annum are ≥ 1.5 % ≤ 15 % OR all members units and investment returns per annum are subject to a fee of 5.5 % when return on investments per annum > 15%. No fees are applied where the return on investments per annum < 1.5 % or < 0 % i.e. an annual loss on total investments. These fees are charged by the holdings/trustee/nominee company.

c.) Members leaving the fund through clause 11.) b.) of the rules are charged the fees stated in clause 8.) b.) and 11.) C.) of the rules.

9.) Capital Account

a.) The fund’s assets shall be valued monthly by the treasurer and a report shall be presented at the next meeting. The value of investments shall be based on ‘middle’ closing prices recorded in The Financial Times or other reliable source of share price information.

b.) The treasurer’s quarterly report shall include as a minimum: the current value of each of the fund’s investments together with a total value of such investments; a statement of unpaid accounts and cash in hand on the aforesaid day; the total value of the fund’s assets and the current unit value which shall be determined by dividing the total net asset value by the total number of units issued to members.

10.) Members’ Accounts

An account shall be kept for each member of the fund showing: the total investment made by each member by means of subscription, initial lump-sum and/or additional purchases of units; the total of withdrawals made by each member who has sold back units to the fund; the total number of units currently held by the member and the current value of their holding.

11.) Member Leaving the Fund

a.) Resignations of membership must be submitted in writing and email to the committee not less than seven days before the monthly meeting at which the resignation is to take effect.

b.) Members leaving the fund, whether by resignation or as the result of termination of membership under clause 16.) of the constitution, shall sell back to the fund their entire holding of units at the prevailing value which shall be calculated by the treasurer and agreed by the committee.  

c.) The amount to be paid to a member leaving the fund shall be calculated by multiplying the total number of units held by the member by the unit value declared by the treasurer at the fund meeting at which the resignation became effective, subject to deduction of fund brokerage if such should be in force at that time, any legal fees incurred by the fund in connection with the withdrawal of the member and a £45 ‘leaving’ fee. Fees as stated in the rules clause 8.) b.) shall also be applied. Any surplus cash held to the member’s credit will be added. Such amounts are calculated by the treasurer and agreed by the committee.

d.) Payment to the member who has left the fund shall be made as soon as possible and in any case within 90 days of the resignation becoming effective.

 

12.) Additional Units

The fund may, at its discretion, allow individual members to purchase additional units by written agreement of the committee but it is implicitly understood that every member shall have equal voting powers on all investment matters and matters that impact upon unit values.

13.) Running Costs

No member of the fund shall be directly compensated for providing services to the fund. Expenses incurred in managing the fund shall be recorded in the fund’s cash account which shall be funded from the fund’s petty cash account with prior agreement with the committee. The treasurer shall maintain a full and accurate record of all expenditure to submit to the auditors annually.

14.) Banking

a.) The fund’s bank/building society shall be determined annually at the annual general meeting by the committee.

b.) All cheques drawn on the fund’s account(s) shall require two authorised signatures of the honorary chairman, honorary treasurer and honorary secretary. Where possible at least one of the signatories of cheques should be the honorary chairman, honorary treasurer or honorary secretary. In the event of one authorised of these signatory being unavailable for an extended period, the committee of the fund may authorise a further signatory for the period involved. All income shall be paid direct into the fund’s bank/building society account(s) except where members have approved an arrangement whereby their stockbroker retains funds from the sale of one or more investments pending the purchase of other investments.

c.) The fund’s bank/building society shall be instructed not to grant any overdraft facilities to the fund.

15.) Brokers

The fund’s brokers shall be instructed that:

a.) Only the committee or members authorised by the committee are authorised to buy or sell investments on behalf of the fund.

b.) No member is authorised to commit the fund beyond the cash held by the fund.

c.) All cheques due to the fund's account are to be made out to the fund's name on non-transferable cheques.

16.) Commitments

No member shall make any commitment on behalf of the fund or commit the fund’s funds without written authorisation of the committee to do so.

17.) Amendment of the Rules

The rules of the fund may be amended or rescinded at a properly constituted meeting of the fund subject to written agreement of the committee and with clause 4.) of the constitution.

18.) Minutes

Minutes of the fund meetings shall be kept and shall be available for inspection by any member of the fund at any reasonable time.

19.) Disputes

a.) Any disputes as to the interpretation of these rules shall be decided by the committee and ultimately the honorary chairman.

b.) Any disputes relating to the valuation of a member’s share in the assets of the fund or their entitlement to that share shall be decided by a chartered accountant of at least seven years' standing whose certificate of decision shall be final. Fees incurred in obtaining this decision shall be paid by the party to the dispute against whom the decision is made or, in the case of this not being clear, the fees shall be shared evenly between the fund and the member or ex-member concerned.

20.) Winding Up

The fund shall be wound up and all assets divided among members (after payment of the funds expenses) in accordance with the number of units held by each member if a written resolution to that effect is passed by the committee.

21.) Tax Liability

Membership of the fund implies acceptance of proportional personal tax liability on trading profits/losses and capital gains/losses made by the fund in any tax year. It is the responsibility of each member to notify the HMRC of any proportional profits/gains/losses from investments in the fund.

22.) Businesses

All members running businesses on behalf of the club must sign a trust document stating all terms and conditions of the operation.

23.) Structure

 All members must agree to and abide by the club structural document, which sets out the best practise for club operations.