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Status:Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the mainFCA transitional directions.Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the mainFCA transitional directions.

You are viewing the version of the document as on2022-07-29.

FPCOB 3 Annex 1Form of a beneficial trust

FPCOB 3 Annex 1 G

1This annex belongs toFPCOB 3.1.9R.

1.

This annex outlines provisions that afuneral plan providermight include in the trust deed of a beneficial trust set up in compliance withFPCOB 3.1.9R.

2.

This annex does not represent legal drafting for inclusion in the trust deed.Funeral plan providerswill need to engage legal advisers to prepare the trust deed.

3.

Where a provision is required byFPCOB, the annex references theFPCOBrulebut does not set it out in full. Other provisions, not explicitly required byFPCOB, are also listed below which are consistent withFPCOBgenerally and which will make the trust operable.

Definitions

4.

“Related funeral plan” means a funeral plan in respect of which a proportion of the sums paid by thecustomerhas been paid into the trust pursuant toFPCOB 3.1.6R(2).

5.

“Undischarged related funeral plan” means a related funeral plan in respect of which the Trustees remain under a liability, or a potential liability, to make a payment under paragraph 7(4) below.

6.

Terms in italics have the meaning in theGlossary.

Beneficial provisions

7.

受托人应当持有的信托基金的信任as follows:

(1)

to make the payments in (3) to (7) and, when there are no more payments due or potentially due under those paragraphs, upon trust for thefuneral plan provider(FPCOB 3.1.9R(1));

(2)

the assets held on trust must be kept segregated from any assets belonging to thefuneral plan provider(FPCOB 3.1.9R(2));

(3)

to pay the essential payments for the operation of the trust (FPCOB 3.1.9R(3)(b));

(4)

in respect of each related funeral plan, to raise and pay one of the following payments:

(a)

a payment to thefuneral plan provideror funeral services provider for the purpose of delivering acovered individual’sfuneral (FPCOB 3.1.9R(3)(a));

(b)

the provision of acustomerrefund (FPCOB 3.1.9R(3)(d));

(c)

on thefailureof thefuneral plan provider, or if it isin default, payments to thecustomerorcovered individualor in accordance with a determination of theFSCS(FPCOB 3.1.9R(3)(e));

(5)

thefuneral plan providershall have the power to require the trustee to pay to it a sum equal to any surplus in the trust which satisfies the requirements ofFPCOB 3.2.12R(FPCOB 3.1.9R(3)(g));

(6)

in the event of the insolvency of thefuneral plan provider, any insolvency practitioner shall have power to require the trustee to discharge certain costs in priority to any other claim on the assets of the trust – for example, costs of the insolvency practitioner properly attributable to causing the provider to continue providing or arranging funerals, effecting a transfer of thefuneral plan contractsto a new provider or making payments underFPCOB 3.1.9R(3)(e)(FPCOB 3.1.9R(3)(c));

(7)

on a transfer of business of thefuneral plan provider,the provider shall have power to require the trustee to pay trust assets to the trustees of another trust set up by the other provider or to purchaseinsurance contracts; a certificate from an actuary will generally be required (FPCOB 3.1.9R(3)(f));

(8)

the trustee is required to make all the payments in (3) to (7) and must not make any other payments out of the trust fund;

(9)

the trustee is required to make all the payments in (3) to (7) and must not make any other payments out of the trust fund;

(10)

(a)

subject to (b) below, thefuneral plan providermay notify the trustee by notice in writing that the termination date may be any earlier date than that referred to in (9) (but not a date earlier than the date of the notice);

(b)

the termination date may only be declared to be a date on which the trust has no undischarged related funeral plans; and

(11)

upon the termination date, any assets remaining after discharging the costs of winding up the trust shall be held for thefuneral plan providerabsolutely.

Other provisions

8.

In addition to the above beneficial provisions, the trust will also need to include:

(1)

provisions to reflect the requirements ofFPCOB 3.1.9R(5)toFPCOB 3.1.9R(12); this includes facilitating compliance by thefuneral plan providerwith its obligations concerning trust solvency, remediation plans and remedying deficits (FPCOB 3.1.9R(8)andFPCOB 3.2);

(2)

the necessary standard administrative provisions – for example, for appointment or removal of the trustee and to enable the trustee to manage and invest the trust fund;

(3)

a power of amendment vested in thefuneral plan providerand the trustee, but limited so as to prevent the trust being amended in any way which causes it to cease to comply with the requirements ofFPCOB.

9.

The trust will also need to be compatible with thefuneral plan provider’sobligations to have arrangements for continuity and reimbursement on itsfailureunder thefuneral plan resolution rules(seeFPCOB 16.1.3RandFPCOB 16.1.4R), in particular:

(1)

that there will be no cause for unreasonable delay for payments that the provider or any otherpersonarranges to be made to anycustomerorcovered individualfrom the trust (FPCOB 16.1.4R(1));

(2)

obligations concerning:

(a)

another provider carrying out related funeral plans with the trustee remaining in place on the same terms (FPCOB 16.1.5R(1)(a)– see alsoFPCOB 3.1.9R(11));

(b)

payments tocustomersandcovered individuals(FPCOB 16.1.5R(1)(b)– see also paragraph 7(4)(c) above);

(c)

the trustee not unreasonably withholding consent to the transfer of related funeral plans to another provider (FPCOB 16.1.5R(2));

(3)

that an insolvency practitioner would be in a position to recognise acustomer’sorcovered individual’srights under the trust (FPCOB 16.1.8G(1)(a));

(4)

that an insolvency practitioner would be in a position to exercise the rights of the provider concerning transfer of related funeral plans or payment as in (2)(a) and (b) above (FPCOB 16.1.8G(1)(c)).

10.

The trust should not contain any provision that is in conflict with thefuneral plan provider’sobligations under theFCA’srulesor under anyrequirementspecific to the provider.