S.L. 331.8 Art. 10Investment parameters.

(1) A trustee appointed under these regulations shall adopt a conservative investment policy in dealing with trust assets, including investment portfolios as well as individual securities that may form part of the trust assets, and shall maintain a balance between the generation of income and the preservation of capital, while generating sufficient proceeds to meet the expenditure requirements of the beneficiaries in accordance with the provisions of the trust instrument.

(2) No part of the trust assets shall be entered into leverage arrangements or utilised for the purchase of securities on margin or geared in any way through the use of financial derivative instruments, either directly or on a see-through basis.

(3) A trust set up in terms of these regulations shall comply with the prudential investment restrictions outlined below:

(a) If any of the trust assets are invested, these shall be predominantly invested in regulated markets.

(b) The trustee shall not invest more than ten per cent of the trust assets in securities which are not traded in or dealt on a market which:

(i) is regulated, operates regularly, is recognised and is open to the public;

(ii) has adequate liquidity and adequate arrangements in respect of the transmission of income and capital.

(c) The trust assets invested shall be properly diversified in such a way as to avoid excessive exposure to any particular asset, issuer or group of undertakings. In any case, a trustee shall not invest more than ten per cent of trust assets in securities issued by the same entity.

(d) No more than fifty per cent of the trust property shall be kept on deposit with any one body.

(e) The trustee in his capacity as trustee of a Protected Disability Trust shall not grant loans or act as guarantor for any person other than the settlors or the person with disability.