IFM12545 - Offshore Funds: Reporting funds: computation of reportable income: equalisation: meaning of full equalisation arrangements

Regulation 50A of SI 2009/3001

An offshore reporting fund operates ‘full equalisation arrangements’ if it operates equalisation arrangements and if, in relation to units issued during the reporting period:

• the equalisation amount included in the consideration for the initial purchase of units is specified in writing by the fund in a statement to the participant making the acquisition or in the report to the participants (real-time basis), or
• the average equalisation amount per newly issued unit is included in the report to participants (average basis) (regulation 92(3)(ba).

If the equalisation amount per unit is calculated on a real-time basis then it is acceptable for the report to include access to a table or other source specifying the equalisation per unit by reference to the date of issue of the unit.

Similarly, if the average equalisation is calculated separately for each computation period within the reporting period then this is acceptable, again provided that clear information is provided with the report to enable the participant to identify the amount of equalisation per unit relevant to that participant’s units.