2INVESTING WITH IPS – CONTACTING IPSCONTACTING IPS.We’re here to help you. It’s easy to change yourdetails, ask a question, get information, add orwithdraw money or change funds.There are a number of ways you can contact us:CALL USYou can call our Customer Services on:0845 272 0089EMAIL USFor general enquiries, comments and suggestionsyou can send an email to Customer Services:firstname.lastname@example.orgIf you’re contacting us by email please remembernot to send any personal, financial or bankinginformation because your information won’tbe secure.9.00am to 5.30pm, Monday to Fridayfor general information on our range of funds orfor questions about your Portfolio Investments.Call charges will vary. We may record and monitorcalls. This number may not be available outsidethe UK.WRITE TO USYou can write to us with certain instructions onyour Portfolio Investments, if you’re changing anypersonal details, if you have any questions or youhave a complaint:Investor Portfolio ServiceLegal & GeneralPO Box 1112ChelmsfordCM99 2UXONLINE INFORMATIONAND SERVICINGYou can visit our website:www.onlineips.co.ukfor news, fund information,brochures and forms for yourInvestor Portfolio Service investments.You can also register for secure onlineaccess to your account.Once registered, you can:• View your IPS portfolio valuation.• Access quick and print-friendly valuationsacross your entire IPS portfolio.• See your IPS historical transactions, statementsand correspondencefrom us.• Top up and change funds in existing PortfolioInvestments (your ISAs, unit trusts and OEICs).• Buy new Portfolio Investments; and• Move money between your IPS Cash Accountand Portfolio Investments.
INVESTING WITH IPS – CONTENTS 3CONTENTS.Where TO STartBecoming an IPS invESTOrBefore you invESTWhat is Investor Portfolio Service (IPS)?Unit trusts and OEICsISAsHow can I invest?IncomeCharges and expensesTaxChanging your mind – your right to cancelAfter you’ve invESTEdWhat we’ll send you after you’ve investedKeeping track of your moneyAdding money and changing your fundsIncome and withdrawalsYour PEace of mindWho looks after my investment?Making a complaintHow we treat different types of customerWhere will my money be held and how secure is it?The Financial Services Compensation SchemeOur right to terminate your accountTerms and ConditionsThe Investor Portfolio Service Terms and ConditionsYour Portfolio Investments Terms and ConditionsGlossary45556891214192223232425283030313132333334344255
6INVESTING WITH IPS – BEFORE YOU INVESTSUITABILITYWhere can I get advice ON whether aninvESTmENT is suitable for me?The purpose of this document isn’t to give you advice ormake a recommendation. It’s up to you to decide if thisis suitable for you. We haven’t assessed whether thisproduct is suitable for you. This means that you don’thave the protection you would have received if we haddone this.If you need help, speak to your financial adviser if youhave one, or contact our Customer Services on thenumber on page 2 who will explain your options to getadvice. We can only advise on Legal & General’s lifeassurance and investment products.UNIT TRUSTS AND OPEN-ENDEDINVESTMENT COMPANIES (OEICs)Why chOOSE a unit trust or OEIC?Unit trusts and OEICs are types of investment that:• Give you the potential to make your money growand/or receive an income;• Offer you access to buy different types of ‘assets’,including company shares, bonds, commercialproperty, cash and even in other investment funds;• Allow you to buy a wider range of investmentsthan you would conveniently be able to achieveon your own;• Can help to reduce risk by spreading your moneyover a range of investments; and• Give you access to professionally managed fundsso you don’t have to choose individual assets suchas company shares or bonds by yourself.All the funds we offer are available as a tax-efficientIndividual Savings Account (ISA) – there’s more aboutISAs on page 8.Unit trusts and OEICs are very similar in many ways,but have a different legal structure and can have otherdifferences. For example the way that units and sharesare priced can differ when you buy and sell, as weexplain on page 14. We may refer to unit trusts andOEICs collectively as ‘Portfolio Investments’.hOW dOES a unit trust/OEIC WOrk?• You invest your money in the fund together with otherinvestors’ money.• A unit trust is divided into units, and the number ofunits you hold represents your share of the fund.• An OEIC is divided into shares and the number ofshares you hold represents your share of the fund.• Most funds have two unit/share types: distributionunits/shares for income and accumulation units/sharesfor growth.• When the fund receives more money, the managerbuys more assets and creates new units/shares.• The price of the units/shares will reflect the value of thefund’s assets. If these go up in value, the price will rise.If they go down in value, the price will fall.• Funds can have either a single unit/share price, so theprice is the same on a single day for both buying andselling, or two prices – the buying price and the sellingprice.See the ‘Charges and expenses’ section on page 14for more about how units and shares are priced.
INVESTING WITH IPS – BEFORE YOU INVEST7Who can invEST?You must be 18 years old or over to invest.Unfortunately, Portfolio Investments aren’t availableto US Persons. If you become a US Person/Resident infuture, you must let us know. You can contact us if youneed more information.If you’re investing directly in unit trusts or OEICs:• You can invest on your own or with up to threeother people.• If you’re investing jointly, we’ll need all investors tosign for all future transactions including changes toincome payments.If you’re investing within an ISA:• You can invest only on your own.• You must be resident, and ordinarily resident, in theUK for tax purposes. Your local tax office can help ifyou need confirmation of your residency status.• Crown employees, such as diplomats or membersof the armed forces who are working overseas andpaid by the government, are eligible to open an ISA.Their spouses or registered civil partners can alsoopen an ISA.What’s my COmmitmENT?• You can invest a lump sum, or make a regularpayment every month, with a minimum of £20 intoeach fund you’re buying. If you’re investing directlyin a unit trust or OEIC, there’s no maximuminvestment limit. If you’re investing through an ISA,there are investment limits for each tax year.• You don’t have to leave your money for a fixedlength of time. You can tell us you want to takeout some or all of your money at any time.The section called ‘Individual SavingsAccounts (ISAs)’ on page 8 tells you the ISAlimits and ‘Changing your mind – Your rightto cancel’ on page 22 tells you more aboutyour right to cancel.What are the risks?There are some risks that you need to understandbefore you invest:• The value of your investment, and any incomefrom it, can fall as well as rise. If this happens,you may get back less than you invest. Youshould also bear in mind that investmentperformance may go up and down more in theshort term.• The nature and level of risk differs from fund tofund. Generally, the greater the potential reward(investment growth or income) a fund offers, thehigher the level of risk to your investment.• Some funds have specific risks depending onfactors such as what they invest in or where inthe world they invest.It’s important that you understand the risksof the fund(s) you choose before you invest.The ‘risk and reward profile’ in the KIIDshows the fund’s level of risk in relation tothe potential reward. It also shows specificrisks for the fund. There’s also moreinformation about the fund and the fundrisks in Important Fund Information.• Ideally you should not commit yourself to aparticular end date, you should consider it as amedium to long-term commitment, for exampleat least five years.• If you change your mind, you have 14 days afteryou receive your cancellation notice to cancelyour investment.
10INVESTING WITH IPS – BEFORE YOU INVESTWhat you also NEEd TO kNOW aboutISA transfers• Your existing manager may charge an exit feeon transfers.• You can transfer money saved in a cash ISA to astocks and shares ISA – but you can’t transfer moneythe other way.• If you’re transferring a cash or a stocks and shares ISAtaken out in the current tax year, you must transfer yourwhole cash or stocks and shares ISA investment for thecurrent year.• You can transfer all of any current tax year cash ISA,but this will be invested in a stocks and shares ISA.• If there’s a rise in the markets before the ISA transfer,either to or from us, is complete, you could potentiallymiss out on some income or growth.• If you transfer a current year cash ISA to a stocks andshares ISA, this ‘resets’ your cash ISA limit for thecurrent year, so you’re free to invest in another cashISA up to the £5,640 limit, subject to the overall ISAlimit of £11,280 (2012/2013 tax year limits).WHEN arE UNITS AND SharESBOughT AND SOld?• We accept instructions to buy, sell or switch unitsand shares every business day.• Each fund has a valuation point, which is thespecific time of day when the fund is valued and aprice calculated.• Most funds have a daily unit or share price. Fora deal to be done at this price, the instructionto buy, sell or switch units or shares must bereceived before the dealing deadline for thatvaluation point.• Unless we tell you otherwise, we must receivetelephone instructions at least one hour beforethe dealing deadline, and instructions receivedthrough the website at least 15 minutes beforethe dealing deadline.Re-registrationRe-registration is a service we offer that allowsyou to transfer the administration of your existingunit trusts and OEICs, including ISAs, that youhold with different companies to IPS. The funddoesn’t have to be one we normally offer. Oncecompleted, we handle the administration of there-registered funds and deal with the fund managerfor you. You contact us for any information orto give instructions on any of your re-registeredinvestments, and we send you any fundinformation and your statements.Money remains invested in the fund throughoutthe re-registration process, so you can continue tobenefit from any investment growth and incomefrom the fund.Why WOuld I re-regiSTEr funds IcurrENTly hold elsewhere?• You’ll receive a single statement giving avaluation of all the funds you currently hold.• It’s easy to check your recent payments andtransactions, in your statements or by registeringfor our easy secure online service.• You can move money between our wide rangeof funds from top fund providers, by filling out aform securely online.• It means less paperwork and administrationfor you. You can contact IPS to manage all theinvestments you hold with us.hOW dOES it WOrk?If you have a financial adviser, they can tell you if afund that you hold can be re-registered to IPS. Youcan also contact us to send you a form tore-register funds.• The minimum amount is £20 for each fund.• You can re-register most unit trust and OEICfunds. If we confirm a fund can’t be re-registered,if it’s an ISA, you have the option to transfer thecash into a fund we offer.• Monthly investments are invested on the firstvaluation point after we receive the payment.The dealing deadline and valuation point areshown in Important Fund Information.
12INVESTING WITH IPS – BEFORE YOU INVESTINCOMEFunds usually hold assets that pay an income to thefund. This can come from various sources, dependingon where the fund invests, including share dividends,income from corporate bonds, or rents from commercialproperty. For some funds, you can choose to receive thisincome into your bank or building society account.Taking or reinvESTing iNCOmeTaking an iNCOmeSome funds offer ‘income’ units/shares that can pay thefund’s income to you. If you choose income units, youcan have the income paid to you or retained in your IPSCash Account.Where funds you hold offer income units/shares, you cancontact us to start or stop receiving an income from yourPortfolio Investments. We’ll change your unit/share typeif necessary.ReinvESTing the incomeIf you want to reinvest the income, where a fund offersthem, you can choose accumulation units. Most fundsoffer accumulation units/shares, which reinvest anyincome earned back into the fund as it’s received,increasing the unit/share price. If a fund offers onlyaccumulation units/shares, you can’t take an income.I have iNCOme units/shares, when willyou pay me iNCOme?Each fund has its own distribution dates whenincome is paid to IPS, each relating to an earlierex-dividend (XD) date, the date at which income iscalculated. See the diagram below.• If you hold units before an XD date (A), incomeis paid at the following distribution date (A1).• If you buy units between an XD date and adistribution date (B), income is paid on thedistribution date after the following XD date (B1).The fund manager sends us the income paymenton the distribution date and we either reinvest itinto more income units or pay it into your IPS CashAccount, depending on what you’ve asked us to do.Income paid into your IPS Cash Account is eitherpaid out to your Nominated Bank Account onthe next pay date, or retained in your IPS CashAccount, depending on your instruction. If you’rereceiving income, we pay it into your NominatedBank Account on the seventh business day ofeach month.If a fund offers only income units/shares, you can stillchoose to reinvest that income instead of having it paid –the income will automatically be used to buy moreunits/shares in your chosen fund.When funds pay iNCOmeCut-off for whenincome is calculatedIncome paidXD dateDistribution dateXD dateDistribution dateTimeA B A1 B1
INVESTING WITH IPS – BEFORE YOU INVEST13ISA tax creditsEach fund has its own distribution dates when incomeis paid, each relating to an earlier ex-dividend (XD) date,the date at which income is calculated. See the diagramat the bottom of the previous page.• We’re able to claim tax back fromHM Revenue & Customs (HMRC) on the income paidfrom some funds when they’re held in an ISA. If you’rereceiving an income from one of these funds, we’ll payyou the value of the tax credit along with the incomepayment, and then claim the tax back.• If you’re investing any income, any reclaimed tax willbe reinvested to buy more units/shares.Nominated Bank aCCOuntWhen you apply for a Portfolio Investment, we askyou to confirm a bank or building society accountin your name as your ‘Nominated Bank Account’.We’ll pay any income, and any withdrawals youmake from your IPS Cash Account, into thisaccount. We can pay withdrawals direct from youraccount into this Nominated Bank Account.You can also add money to your IPS Cash Accountfrom your Nominated Bank Account or by cheque– see ‘Adding money to your IPS Cash Account’ onpage 26.For tax information, please see the ‘Tax’ section onpage 19.IPS Cash aCCOuntThe IPS Cash Account is used for Portfolio Investmentsonly, to hold money while it’s not invested in a fund. Wemay also move money through the IPS Cash Accountwhen it’s being added to or withdrawn from your IPSPortfolio Investments.We give you a unique ‘Platform Account Reference’ thatrefers to your IPS Cash Account when you first investwith IPS. You can have more than one IPS Cash Account,for example if you have an account solely in your nameand another held in joint names.iNTErEST ON the IPS Cash aCCOuntWe pay you interest on money held in your IPS CashAccount. You can see details about the interest rates andwhen interest is paid online atwww.onlineips.co.uk/accountrates or by contacting IPSCustomer Services.However, if you pay money directly into the IPS CashAccount by cheque or from your Nominated BankAccount (rather than money being transferred froma Portfolio Investment fund or funds), we won’t payyou interest on any money moved into PortfolioInvestment fund(s) or withdrawn before the firstinterest payment date.
14INVESTING WITH IPS – BEFORE YOU INVESTCHARGES AND EXPENSESYou’ll pay charges and expenses on the funds you invest in.These will reduce how much is invested, the performance ofyour investment and how much you get back, so it’s important tounderstand the charges and also how funds differ. This sectiongives more information on these charges and expenses.You can find the specific details of the charges and expensesin the Key Investor Information Document, and in ImportantFund Information.Transaction chargESThese are charges you pay when investing in or taking moneyout of a fund. They’re designed to cover the costs involved, andto try to ensure that all investors pay their fair share of costs. Youwill always pay these charges, although funds can have differentmethods of taking the charges. Transaction charges often meanthat the price at which you buy and sell units or shares in a fund isdifferent from the quoted unit/share price used for valuations.Funds have different ways of charging and different levelsof charges. When you invest in a fund you’ll pay costs thatcan include commission, stockbroker fees, fund manageradministration, and stamp duty. When you take your moneyout of a fund, the costs include administration and the costsof the fund selling investments to pay the withdrawal, such asstockbroker fees.When a fund manager doesn’t pass on the full costs of buyingand selling assets through the transaction charges, costs willbe paid from the fund. This will reduce the growth potential ofthe fund.KEY DEFINITIONSNet Asset Value (NAV) – the value ofa fund’s investments – the value of aunit or share is the NAV divided by thenumber of units/shares in issue.Single pricing – each day, units/shares in a fund have a single price,based on the NAV, for all investorsbuying and selling. Any entry chargeis then added to this price for investorsbuying units/shares. A fund managercan add additional charges, a dilutionlevy or dilution adjustment, to coverdealing costs.Dual pricing – each day, there aredifferent prices to buy and sell units– investors buy into a fund at a higher‘offer’ price, or sell at a lower ‘bid’price. The prices account for costs ofdealing. The offer price also includesthe entry charge.Bid/offer spread – the differencebetween the bid and offer prices on adual-priced fund.Entry (or initial) chargeThis is a one-off charge taken each time you add money to mostfunds. An entry charge is a percentage of the amount you invest.They vary between funds and some may have no charge.
INVESTING WITH IPS – BEFORE YOU INVEST15Bid/offer spreadSome funds are ‘dual priced’. Each day, they have a separate offer(or buying) price, and bid (or selling) price. The difference betweenthe two prices is known as the bid/offer spread, and is made up of:• the entry charge of the fund;• the difference between the buying and selling price of theunderlying holdings; and• other costs the fund pays when buying and selling assets,(for example stockbroking commission and stamp duty).Normally, the prices are calculated on an ‘offer basis’ as follows.The manager starts with the ‘creation’ price, which is the cost ofcreating a new unit/share. This includes the price of the assets thatthe fund needs to buy to create a unit/share, plus all other dealingcosts that have to be paid. The entry charge is then added to thecreation price to give the offer price you can buy at.The bid price is the ‘cancellation price’ – the cost of cancelling aunit/share, the value of the assets being sold, minus the costs ofselling a unit/share. This is the price you can sell at.Bid/offer spreadFunds with higher dealing costs orinvestments that are more difficult tobuy and sell will tend to have a largerbid/offer spread.These funds include:• Funds investing in property;• Funds with a limited market, suchas certain corporate bonds, smallercompanies or emerging markets.The size of the bid/offer spread canchange daily as investment conditionschange. A larger bid/offer spread mayincrease the cost of investing in thesefunds, and reduce the amount youreceive when you withdraw.Here is a simple example – for ease we have assumed that creationprice is 100p. We’ve also assumed that the fund manager appliesthe maximum bid/offer spread, in this case 6%. The offer price istherefore the maximum offer price allowed.Dual pricing: offer basisMaximum offer price = 105.5pCreation price = 100pEntry chargeBid/offer spread = 6%Bid price = 99.5pThis method is known as valuing the fund on an ‘offer basis’, and is usedwhen more money is entering the fund than leaving the fund. This isnormally the case as the number of units in a fund usually increasesover time.
16INVESTING WITH IPS – BEFORE YOU INVESTIf the opposite is true, and more money is leaving the fund thanentering the fund, the manager may decide to price the fund on a‘bid basis’. This uses the ‘cancellation price’ as the starting point.The bid price is set as the cancellation price, and the entry chargeadded to this to give the offer price. The prices are calculated asfollows (again with creation price at 100p).Dual pricing: bid basisMaximum offer price = 105.5pOffer price = 103.9pCreation price = 100pBid price = cancellation price = 98pBid/offer spread = 6%Note that both the bid price and the offer price are lower when pricing ona bid basis.These examples assume that a manager applies the maximumbid/offer spread, although in practice fund managers don’tusually apply the full spread. Every day, investors are both buyingand selling units/shares in the fund. The fund manager matchesunits from investors leaving the fund and those who are buyingthe fund, keeping the costs of dealing low as fewer assets need tobe bought or sold. This means that the bid/offer spread is smalleras costs passed on to investors are lower.You can see if a fund is dual priced orsingle priced in Important FundInformation.The bid/offer spread will increase when dealing costs are higher.The ‘offer basis’ example shows fund pricing when there’s aninflow of money from more investors buying than selling.• When there is a particularly high inflow of money into a fund,the manager may price on an offer basis with a higher offerprice, closer to the maximum offer price. A manager willusually have a rule to decide when the inflow is high enoughto do this.• In the same way, when there is an outflow of money,a manager pricing on a bid basis may move the bid pricelower, towards the minimum bid price allowed, the cancellationprice as shown in the ‘bid basis’ example.• Managers have the right to alter the bid/offer spread at theirdiscretion, within the maximum limits, and this doesn’t haveto be directly related to the costs they incur.
INVESTING WITH IPS – BEFORE YOU INVEST17Dilution levy/Dilution adjustmENTWhere a fund is ‘single priced’, so buying and sellingprices are the same each day, high levels of buying orselling may increase the fund’s dealing costs and affectthe value of its assets. This is known as ‘dilution’, andthese costs can reduce the performance of the fund.To protect ongoing investors, by protecting the fundvalue, the fund manager may do one of two things:• Charge a dilution levy on certain individual largepurchases or sales, to cover the costs of thosetransactions.• Make a ‘dilution adjustment’ by changing the price ofall units/shares, to cover the extra costs.On days when more money is being invested than takenout, a dilution adjustment will increase the unit/shareprice for all deals placed on that day to cover costs ofcreating the new units and buying assets. On days whenmore money is being taken out than invested, a dilutionadjustment will reduce the unit/share price to cover thecosts of selling assets.The size of the dilution levy or dilution adjustment canvary depending on the costs being covered. For example,if the net inflow or outflow on any day is particularlylarge, the fund manager could apply a bigger dilutionlevy or dilution adjustment. Each fund manager will haverules they follow to define when to do this.Ongoing chargesThese charges are taken from your fundautomatically, for as long as you hold it. Thesecharges consist of the annual managementcharge and the extra expenses, and they’retaken from either the fund’s capital or income.All states within the European Economic Areaprovide details of the ongoing charges to helpcompare expenses of different schemes.aNNual managemENT chargeThe fund manager deducts this ongoing chargefrom the fund. The unit or share price takes accountof this charge. It covers the costs of managing thefund, including investment management. It alsocovers the fee paid to the company that providesour administration and technology services,typically 0.25% of the value of your investmenteach year.Extra exPENSESOther costs paid each year (trustee, custodian,registrar, audit, regulator fees).If a fund invests in other funds, then its extraexpenses may include charges and expensesfor the other funds.For some funds the extra expenses are onlyfor the registrar fees, and the other extraexpenses come from the annual managementcharge (AMC).Details of these charges and where they’retaken from can be found in Important FundInformation. Together, the AMC and extraexpenses are known as the fund’s ‘ongoingcharges’, and are shown as a single figure in theKey Investor Information Document (KIID).
18INVESTING WITH IPS – BEFORE YOU INVESTPerformaNCE fEESome funds can also charge a performance feeif the fund exceeds a set performance target, or‘benchmark’. The benchmark could be a particularinterest rate or the performance of similar funds.Performance fees work differently for different funds:• Some funds may take a performance fee whenthe fund’s value is falling, providing that the fund isstill outperforming the benchmark.• Some funds have a ‘high-water mark’, referringto the highest level of outperformance of thebenchmark reached by the fund. The fund has toexceed this high-water mark before any furtherperformance fee can be payable – in this way, themanager has to consistently outperform the target/benchmark to earn the performance fee.A performance fee is taken from the fundautomatically, from either income or the capital,and will reduce the amount of the investment returns.You can see if a fund has a performance fee in the KIIDand in Important Fund Information. If a fund has aperformance fee, full details of how it is calculated aregiven in the Fund Prospectus, available from the fundmanager or by contacting Customer Services. Ourcontact details are on page 2.Other COSTSThere may be other costs taken from the fund’s capital:• Fees relating to the cost of buying and sellingassets, including any commission paid tostockbrokers for trading and/or research.• Interest on borrowing.We do not show these costs.There is currently no exit charge from any of the fundswe offer.Can charges change?Charges may change, but we’ll tell you if there’sany increase in the annual management charge or,if you pay monthly, any change to the entry charge.If these charges change, we’ll do our best to letyou know about it at least 30 days before thechange is made. It may not always be possible togive you advance notice if, for example, an externalfund manager gives us little or no notice of asignificant change.The ‘extra expenses’ figure in Important FundInformation and the ‘ongoing charges’ figure inthe KIID (calculated from the annual managementcharge and the extra expenses) are updated atdifferent times. The KIID will usually show the mostup-to-date charges figures.The COST of advice• If you go to a financial adviser, they’ll give youdetails about their costs.• Where we pay an adviser, this cost is coveredby the fund’s charges. The amount we paydepends on the amount you invest and, inthe case of monthly payments, for how longpayments continue.• If you invest without advice, there’s no cost foradvice. We may, however, pay commission ormake a payment to the company that arrangedthe sale. If we do this, the Commission sheet andthe Confirmation note we send you after youinvest will confirm the amount paid.In addition, Legal & General will receive a paymentfrom the fund managers for administration serviceswe provide to them in connection with yourinvestment. If you’d like further details of this fee,you can contact us – our contact details are onpage 2.Other suPPOrt WE offer advisersWe support and provide advisers and businesspartners with additional tools and benefits to helpyou receive a quality service. This may includetraining, software, seminars and marketingmaterials. If you want to know more, you canget full details from your adviser.
INVESTING WITH IPS – BEFORE YOU INVEST19TAXYour tax position depends on your personal situation and whereyour money is invested. All tax assumptions we’ve made in thissection are those that currently apply. Tax law does change, whichmay affect you, so it’s a good idea to get regular advice.For advice on your personal tax circumstances, contact yourfinancial adviser. Your local tax office can also help answeryour questions, or you can contact HM Revenue & Customs.Tax ON the fundUK tax will be paid on the fund as follows.• Under current UK tax legislation, the fund will not have to payany corporation tax on UK dividend income or capital gainsmade from selling assets held in the fund. However, any otherincome received by the fund can be taxed.• Interest distributions (paid by funds investing mainly ingovernment and corporate bonds, short-term deposits, or both)are generally paid after income tax is taken, currently at arate of 20%.• All dividend distributions (paid by funds investing mainly inshares, property, or both) carry a notional tax credit (tax that istreated as already having been paid), currently at a rate of 10%.• Stamp Duty Reserve Tax (SDRT) is paid on any funds thatinvest in UK shares. It is paid out of the assets of the trust. Thetax is paid on the value of units or shares that the fund buysback from one investor and sells to another. The amount ofSDRT paid is reduced if part of the fund is not invested in UKshares, including any uninvested cash.Overseas funds• If you hold units or shares in a fund that has overseas assets,the fund may be liable to pay overseas tax. The fund may notbe able to reclaim some or all of this tax from the overseas taxauthorities.See the fund tables in Important FundInformation to find out if a fund paysinterest distributions or dividenddistributions.
20INVESTING WITH IPS – BEFORE YOU INVESTPersonal tax – unit truSTS and OEICs• Where you receive interest distributions, income tax at20% will already have been deducted:– if you’re a basic rate taxpayer, you’ll have no furtherincome tax to pay;– if you’re a higher-rate taxpayer, you’ll have to payadditional income tax of 20% of the gross interestdistribution;– if you’re an additional-rate taxpayer, you will haveto pay additional income tax of currently 30% of thegross interest distribution;– if you’re not liable to income tax, you can reclaimsome or all of the tax deducted fromHM Revenue & Customs;– if you’re not ordinarily resident (NOR) in the UK, youmay be able to receive interest distributions withoutUK income tax being deducted. To achieve this you’llneed to provide a valid NOR declaration, which can beobtained from HM Revenue & Customs.• Where you receive dividend distributions:– if you’re a basic-rate taxpayer, you’re liable onlyfor tax at 10% on the dividends you receive. Thisis already met by the notional tax credit explainedabove. You have no further income tax to pay;– if you’re a higher-rate taxpayer, you’ll have to payadditional income tax of 22.5% of the gross dividenddistribution;– if you’re an additional-rate taxpayer, you will have topay additional income tax of currently 32.5% of thegross dividend distribution;– if you’re not liable to income tax, you can’t reclaim thetax credit.Where your total taxable income, including that from unittrusts and OEICs, exceeds £100,000, any income receivedfrom the trust may reduce your personal tax allowance.You may be liable to capital gains tax on any withdrawal(including switches) from a fund, including movinginvestments from a unit trust or OEIC into an ISA.PerSONal tax – ISAsUnder current legislation, all investments in ISAsare free of personal income and capital gains taxes.Unit trust and OEIC distributions within the ISA willbe taxed as follows:• Interest distributions (paid by funds investingmainly in Gilts and corporate bonds, short-termdeposits, or both) are paid after income tax hasbeen deducted at a rate of 20%. When you holdthis fund in an ISA, we reclaim this tax for youfrom HM Revenue & Customs.• A tax credit is attached to each dividend distribution(paid by funds investing mainly in shares, propertyor both) as detailed in the ‘Tax on the fund’ section.For ISAs this tax credit isn’t reclaimable.• If you withdraw some or all of the money in yourISA, you will not be able to replace the amountswithdrawn within the same tax year, unless theamount you wish to invest is within your unusedISA allowance.• Interest from money held in the Cash Reserveis paid net of a 20% flat rate charge that isn’treclaimable.PerSONal tax – IPS Cash aCCOuntInterest paid is taxable as income. Interest is paidnet of tax at 20%, so basic-rate taxpayers have nofurther tax to pay.Higher-rate/additional-rate taxpayers may have anadditional liability.Non-taxpayers and 10% savings starting ratetaxpayers may be able to reclaim tax. You shouldcontact HM Revenue & Customs to find out more.Its website is www.hmrc.gov.uk, or contact yourlocal tax office.What if I pay tax abroad?Depending on your residency status (non-UK),if you live outside the UK, you may have to paytax on any income or capital gains you receive.If you need help on tax issues, you should speakto a tax adviser or the relevant authorities in thecountry concerned.
INVESTING WITH IPS – BEFORE YOU INVEST21The EU Savings DirECTive ON Tax• Under the EU Savings Directive, we need to requestcertain documents to confirm your birth, addressand tax status if:– you’re a new investor after 1 January 2004; andThere’s more information about whendistributions are paid in the section ‘I haveincome units/shares, when will you pay meincome?’ on page 12.– you’re investing in certain funds; and– you’re residing outside the UK, but within acountry covered by the Directive;• If this applies to you, we’ll also have to provideHM Revenue & Customs with details about anypayments made to you. This information can thenbe passed on to the tax authorities of your countryof residence.EqualisationWhen you buy a unit, part of the price includes incomealready held by the fund. This amount is known as theequalisation amount.• Equalisation is calculated on an average basis for allnew investments in the accounting period. This isthe period between two XD dates. The equalisationmakes up part of the first distribution.• At the first distribution date after your purchase, thisamount is treated as a return of capital and thereforeisn’t taxable.• When you make a withdrawal, you should takeequalisation into account when calculating anycapital gains tax liability. This method of distributingthe equalisation amount may be different fromthe method used if you invested directly with thefund manager. This may be to your advantage ordisadvantage.• When withdrawing units, you are not subject tocapital gains on the equalisation amount containedin those units or shares.
22INVESTING WITH IPS – BEFORE YOU INVESTCHANGING YOUR miND – YOURrighT TO CANCELInvesting is a big commitment, so you get a 14-daycancellation period. This section explains how it works,and what happens if you want to cancel your investmentafter your cancellation rights have expired.Lump sum invESTmENTSWe’ll send you a cancellation notice with yourconfirmation note each time you make an investment.If you decide to cancel the investment, you have 14 daysfrom receiving the cancellation notice to sign and returnthe form to us.Monthly paymENTSYou can cancel the instruction within 14 days ofreceiving the letter confirming that we’ve acceptedyour application for a regular investment. To cancel,please write to Customer Services at the address shownon page 2.ISA transfers ONlyWe’ll send you a cancellation notice with yourconfirmation note when we receive the transfer moneyfrom the previous ISA manager. If you decide to cancelthe investment, you have 14 days from receiving thecancellation notice to sign and return the form to us.If you decide to cancel an ISA transferred to us, we can’treturn the money to the previous ISA manager so wesend it to you. You’ll lose the ISA tax benefits on thatmoney. If you don’t want to lose the ISA tax benefits, youmay be able to transfer to another ISA manager.This means if the value of any of your units orshares has dropped, you will not get back thefull amount you invested, as the units/shareswere worth less when they were cancelled.You will not benefit from any rise in a unit orshare price if you cancel.We cancel each fund individually. The maximumyou’ll get back is the amount you invested in thatfund. If a fund has fallen in value, you’ll get backless than you invested in that fund. The lossesare not offset against gains in any other fundyou’re cancelling.What haPPENS if I don’t use my rightto caNCEl within the 14-day PEriod?• You’ll be subject to all investment risks asdetailed in Investing with IPS and ImportantFund Information.• You’ll pay the charges detailed in ImportantFund Information.For ISAs only• You lose your right to contribute to any otherstocks and shares ISA with another manager forthe tax year that you made this investment.• You’ll be unable to replace the paymentswithdrawn within the same tax year, unless theamount you wish to invest is within your unusedISA allowance.hOW much will I get back?When you cancel a lump sum investment, we cancel yourunits/shares, and refund any entry charge you’ve paid.You’ll get back the investment value based on the lowerof either:• the original unit/share price; or• the unit/share price at the next valuation point afterwe receive your cancellation instruction.
24INVESTING WITH IPS – AFTER YOU’VE INVESTEDKEEPING TRACK OF YOUR MONEY• We’ll send you a statement and valuation at least once a year.Our statement is usually sent to you in July each year, andshows your account to the end of May.We’re always here to help if you needany more information. All our contactdetails are on page 2.• You can ask for a valuation or a copy of your last statement fromus if you need one at any time.• You can monitor and manage your investments online byregistering for IPS online servicing.• You can find the value of your investment yourself by lookingup the unit/share price at www.investmentfunds.org.uk andmultiplying it by the amount of units/shares you hold.• Unit/share price information is often quoted by the fundmanager in some of the daily papers, although please notethat any daily unit and share prices quoted are for the previousworking day.
INVESTING WITH IPS – AFTER YOU’VE INVESTED25ADDING MONEY AND CHANGINGYOUR fuNDSAdding more mONEyYou can add more money (top-ups) to your Portfolio Investments(subject to the annual limits, for an ISA) by completing anapplication form, or securely online with your debit card.Regular invESTmENTS by DirECT dEBit• You can set up a new monthly investment, from just £20in each fund by completing an application form. It takes 10business days to set up the Direct Debit before we can takethe first payment.• You can increase or decrease an existing regular investment.The minimum change you can make is £10 for each fund, witha minimum monthly investment of £20 per fund. You can alsochange the fund(s) you’re investing in. Changes take fiveworking days.• You can cancel a regular investment by contacting us bytelephone or in writing. Cancellations need to be made at leastfive business days before the next collection date.Changing fundsYou need to read the KIID for the fund(s)you’re investing in before you:• Add more money to a fund.• Change a regular investment.• Change funds you’re invested in.You should also read the currentversions of Investing with IPS andImportant Fund Information.If you’re registered for online servicing,you can see these and give instructionssecurely online.If you’re not registered for onlineservicing, you can use a transactionform to give us any of these instructions.You can get a form from CustomerServices or from a financial adviserif you have one.See page 2 for details about registeringfor our secure online servicing.You can move money from one fund to another available fundby contacting us or by completing the switch section on thetransactions form.If you tell us to move money between funds, we’ll sell the units/shares in the fund(s) you’re moving from and we buy units orshares in the new fund on the following working day. During thistime, you may be out of the general market for a period of timeand the value of your investment won’t change with any generalmarket movement.IPS Cash aCCOunt and Cash rESErve – holdingcash in your aCCOuntIt is possible to move money out of a fund and hold it temporarilyin cash. You might want to do this to move your money out of thestockmarket for a short time before reinvesting. There are differentways of doing this, depending on whether the money is in an ISAor not.
26INVESTING WITH IPS – AFTER YOU’VE INVESTED• Unit trust or OEIC funds (outside an ISA)You can move money from a fund into the IPS CashAccount, where you can hold it pending withdrawal orinvestment into a fund. You can also add money to theIPS Cash Account pending investment into a fund. Seepage 13 and the next section for more details abouthow the IPS Cash Account works.• Funds in an ISAThe Cash Reserve facility allows you to hold cashtemporarily while keeping the cash within your stocksand shares ISA. It is not an investment in itself, and isdifferent from a cash ISA.You may earn interest on money in the Cash Reserve,paid into your ISA on a six-monthly basis. However,the interest rate isn’t meant to be competitivecompared to rates from cash deposit accounts.If you withdraw from the Cash Reserve, we won’tpay you the interest earned since the last six-monthlyinterest allocation date. Interest is taxed as explainedon page 19.It is important that the Cash Reserve is used onlyas a temporary measure. HMRC guidance and ISAregulations state that money held in the Cash Reservemust be intended for investment into a fund. If HMRCconsiders that you have held cash in the Cash Reservefor too long, it can tell us to close that part of the ISAand return the money to you. You’ll lose ISA benefitson any money withdrawn in this way.You can move money between funds and the CashReserve in the same way as you change funds, asexplained on page 25.• From your Portfolio Investments – You canwithdraw from your investments and tell us tohold the money in your IPS Cash Account. Youcan do this in writing, by telephone, or online ifyou’re registered to use online servicing.If you move money from Portfolio Investmentsinto your IPS Cash Account, we sell the units/shares in the funds you instruct at the nextvaluation point. The money will be credited toyour IPS Cash Account four business days afterthe last units/shares are priced.The IPS Cash Account can’t hold funds in anISA, so if you move money from investments inan ISA to the IPS Cash Account, you’ll lose theISA benefits on that money. The ‘Cash Reserve’can be used to retain the ISA benefits on yourinvestments.Paying for invESTmENTS from your IPSCash aCCOuntYou can move money you hold in your IPS CashAccount into Portfolio Investments, includingbuying a new ISA, simply by providing us with aninstruction to buy funds and telling us to pay fromyour IPS Cash Account. You can do this with atransaction form, or online if you’re registered foronline servicing. If you’re also adding more moneydirectly into funds by cheque or debit card (onlineonly), this needs to be a separate instruction.Adding mONEy TO your IPS Cash aCCOunt• By cheque – Send us a cheque and instruction to addthe money to your IPS Cash Account, quoting thePlatform Account Reference.• By bank transfer from your Nominated Bank Account– You can add money, from your Nominated BankAccount only, by sending a payment by banktransfer to:Sort code: 16-04-00Account: 31256358using your Platform Account Reference as thereference for the payment. We’ll put the paymentinto your Cash Account within one business day ofreceiving it.
INVESTING WITH IPS – AFTER YOU’VE INVESTED27Moving mONEy from your unit trust/OEICiNTO an ISAYou can move money from a fund held outside yourISA into your ISA, free of any entry charge, using atransaction form.You can get this form by contacting Customer Services,online if you’re registered for online servicing, or froman adviser if you have one.hOW it WOrks• We’ll sell your units or shares on the day wereceive your instruction (or the first working dayof the tax year).• Your money will be held as cash for two days untilwe get confirmation that we’re receiving thewithdrawal proceeds from the fund manager.This always happens two days after the originaldeal (when we sell your units or shares).• After the two-day period, we’ll reinvest yourmoney into units or shares in an ISA. If you also wantus to switch it into a different fund, you’ll need to tellus in your instruction.• If the value of the fund rises or falls during thesetwo days, you may not end up with the sameamount of units or shares and you won’t benefitfrom any potential market growth during the two-daytransfer period.• There’s no entry charge, however, if a fund has abid/offer spread between buying and selling prices(see pages 15-16 ‘Charges and expenses’), you maypay for the difference between the selling and thebuying prices and end up with fewer units.
28INVESTING WITH IPS – AFTER YOU’VE INVESTEDINCOME AND WIThdraWALSTaking or reinvESTing iNCOmeAs explained on page 12, funds usually generatean income.If a fund has only accumulation units, thenthis income is automatically reinvested inyour investment.If a fund offers income units, you can choose toreceive this income, paid to your bank or buildingsociety or retained in your IPS Cash Account.Where the fund offers income units, you can tell usto start or stop paying the income from the fund,or to pay it to a different account in your name.Contact us by telephone or in writing to changehow your income is paid. We will change your unit/share type if necessary.If you want to stop receiving income and have theincome reinvested instead, you’ll need to completea transaction form.Taking mONEy outYou can take money out by selling units or sharesfrom your investment, from at least £20 and up toyour total investment value.• You can do this by telephone or letter. You canalso take money out of a fund(s) and pay it intothe IPS Cash Account online if you’re registeredfor online servicing. Please note you’ll need tosend a letter to confirm a telephone withdrawalor to pay money from the IPS Cash Account toyour bank account.• When we’ve accepted your instruction, we’ll sellthe units/shares at the valuation point that comesafter the next dealing deadline. Units/sharesare sold at the next valuation point, so you’llnot know what the final unit or share price youreceive is until after the sale.• The money can be paid straight to your bank orbuilding society account, or can be paid to yourIPS Cash Account as explained on page 26.• We’ll usually pay you within five business daysafter the valuation point of the last fund that hasbeen sold. In some cases we may have to delaypayment to you in order to check the instructionreceived and verify your signature.
INVESTING WITH IPS – AFTER YOU’VE INVESTED29Taking mONEy out of an ISAIf you take out some or all of your ISA investment,you won’t be able to make any further paymentsto that ISA in the same tax year, unless you havesome unused allowance.If you take out all of your ISA investment in thesame tax year as you invested, you won’t be able totake out a stocks and shares ISA with another ISAmanager in the same tax year.Taking mONEy out from yourIPS Cash aCCOuntYou can withdraw from your IPS Cash Accountby writing to our Customer Services Address.We’ll release the money to your Nominated BankAccount within two business days of receiving thewithdrawal instruction.Transferring an ISA TOanother managerTo transfer your ISA to another company, we neednotification from the new manager in writing.You should contact them to arrange the transferof the ISA.Depending on the type of instruction we receivefrom the new manager, we’ll either re-registeryour existing investment to them, or sell the unitsor shares held within your investment with us andtransfer the cash value to them.Other managers may have a minimum they’llaccept, so you should check that first. As with awithdrawal, the minimum you can transfer outis £20.What haPPENS TO your invESTmENTif YOU diEUnit truSTS and OEICs• Your investment account doesn’t automaticallyclose. The money remains invested in the chosenfunds and will continue to move with the market.For single holdings, your personal representative(s)can:a) request a full withdrawal and payment to bemade to the named beneficiary(ies); orb) request a transfer of the holding, to the namedbeneficiary(ies) and continue the investment.For joint holdings, the investment continues in thename of the survivor(s).ISAsThe tax benefits of your ISA account automaticallystop and your money remains invested in units orshares until your estate is settled. Your personalrepresentatives can then:a) request a full withdrawal and payment to bemade to the named beneficiary(ies); orb) request a transfer of the holding – outside an ISA– to the named beneficiary(ies) and continue theinvestment.Any tax credits received after the date of yourdeath will be deducted from the proceeds of thesale and paid direct to HM Revenue & Customs.Cash holdingsAny money held in client money accounts,including the IPS Cash Account and the CashReserve, will be transferred or paid out to thebeneficiary(ies) when the estate is settled.
30INVESTING WITH IPS – YOUR PEACE OF MINDYOUR PEACEOF miND.WHO LOOKS afTER myINVESTMENT?Legal & General Investor Portfolio Service (IPS) is partof Legal & General (Portfolio Management Services),Limited part of the Legal & General group of companies.When you instruct us to buy into a fund, we arrange tobuy units or shares with the fund management companyon your behalf. All units or shares bought using thisbrochure are registered in the name of Legal & General,or in the name of a nominee we appoint, and held in anaccount on your behalf.Any money not invested in a fund is held in a clientmoney account.See ‘Where will your money be held and how secureis it?’ on page 32 for more information.Promoter, Administrator andISA ManagerLegal & General (Portfolio Management Services)Limited. Registered in England No. 2457525.We are a member of the InvestmentManagement Association.Our registered officeOne Coleman StreetLondonEC2R 5AAOur regulatorWe are authorised and regulated by the FinancialServices Authority. We are on its register under thefollowing number:Legal & General (Portfolio Management Services)Limited 146786.You can check this on the FSA Register atwww.fsa.gov.uk or by contacting it on0845 606 1234The Financial Services Authority25 The North ColonnadeCanary WharfLondonE14 5HS
INVESTING WITH IPS – YOUR PEACE OF MIND31MAKING A COMPLAINTIf you have a complaint about any part of ourservice, or you’d like us to send you a copy of ourinternal complaint handling procedure, pleasecontact us by telephone or in writing. Our contactdetails are on page 2.Any complaint we cannot settle can bereferred to:The Financial Ombudsman ServiceSouth Quay Plaza183 Marsh WallLondon E14 9SRMaking a complaint will not affect your right totake legal proceedings. We’ll tell you about yourrights when we answer your complaint.HOW WE TREAT diffERENT TYPESOF CUSTOMERThe Financial Services Authority (our regulator) requiresus to put our customers into groups so that we cantreat them according to their level of knowledge aboutinvestments. These groups are:• retail client;• professional client; and• eligible counterparty.We treat all customers who invest in products from thisbrochure as retail clients. This gives you the greatestlevel of protection under the regulations and ensures youget full information about any products you buy.Can I BE categorised as a profESSionalcliENT or eligible COuNTErparty?• You can choose to be categorised as a professionalclient or an eligible counterparty, but this meansyou receive less information about our productsand services.• Also, you wouldn’t be entitled to receive a suitabilityreport or appropriateness assessment in cases wherethey would be required for retail clients.I’m a profESSional cliENT or an eligiblecouNTErparty.Can I chOOSE TO BE categorised as aretail cliENT?• Yes, if you’re a professional client or eligiblecounterparty you can ask to be categorised asa retail client.• However, this doesn’t necessarily mean you can referany complaints to the Financial Ombudsman Service,and you may not be eligible for compensation underthe Financial Services Compensation Scheme.
32INVESTING WITH IPS – YOUR PEACE OF MINDWHERE WILL my MONEY BE HELD AND HOW SECURE IS IT?Different arrangements apply:• before we invest your money or when you’re taking money out; and• while your money is invested in the fund(s).The table below shows these arrangements and the protection that applies in each case.Before we invest your money orwhen you’re taking money outWhile your money is investedin the fund(s)Where is my money held andis it secure?• We hold any money in a client money bankaccount separate from our own money.Money held in the Cash Reserve and the IPSCash Account is also held in this way in aclient money account.• If the bank that provides the client moneybank account cannot pay us this money, youmay not receive all of your money back. Weare not responsible to you if the bank thatprovides the client money bank accountdoes not pay this money back.• If the bank providing the client moneybank account is unable to pay your moneyback, you may be entitled to compensationfrom the Financial Services CompensationScheme (FSCS). Please see page 33 formore information.• Your money is invested in the fund(s)with the fund manager(s) you’ve chosen.• The fund manager (the ‘unit trust manager’,or ‘Authorised Corporate Director’ (ACD)for OEICs) appoints a trustee who isresponsible for looking after the assets ofa fund. The trustee appoints a custodian todo this for them. The custodian will hold theassets in the name of the fund.• Neither the trustee or depositary nor theunit trust manager or ACD can arrange forthese assets to be transferred into theirown name.• Therefore, the fund’s assets are safe evenif the trustee or the unit trust manager/ACDbecomes insolvent.• If the trustee/ACD became insolvent,the fund would appoint a new one.• If the unit trust manager/ACD becameinsolvent, the trustee/depositary wouldappoint a new one.Is my money secure ifLegal & General becomesinsolvent?• Yes, because we hold your money in a clientmoney bank account separate from our ownmoney, if we became insolvent, your moneywould be safe.• If for any reason your money isn’t heldin a client money bank account and webecame insolvent, you may be entitled tocompensation, also under the FSCS. Pleasesee below for more information.• Yes, if you’re invested in a unit trustmanaged by Legal & General, and webecame insolvent, the trustee wouldappoint a new unit trust manager.Is my money secure if the fundmanager becomes insolvent?• Yes, as explained above, your money isheld in a client money bank account so yourmoney would be safe.• If for any reason your money isn’t held ina client money bank account and a fundmanager became insolvent, you may beentitled to compensation, under the FSCS.Please see below for more information.• Yes, because if a fund manager becameinsolvent, the trustee/depositary wouldappoint a new unit trust manager or ACD.
INVESTING WITH IPS – YOUR PEACE OF MIND33THE fiNANCial SErviCESCOMPENSATION SCHEME (FSCS)Money held in a cliENT mONEy bankaCCOunt• Most depositors, including individuals and smallbusinesses, are covered by the FSCS.• The FSCS covers the first £85,000 of each customer’sclaim against a bank or building society.• Any money you hold in other accounts with the bankproviding the client money bank account would counttowards this limit.• Some banks and building societies operate undera number of trading names. The total FSCScompensation claim will include claims against allthese trading names.Money held outside A cliENT mONEybank aCCOunt• The FSCS covers most types of investment businessfor the first £50,000 of each customer’s claim.• Your ability to claim from the FSCS, and the amountyou may be entitled to, will depend on the specificcircumstances of your claim.• You can find out more about the Financial ServicesCompensation Scheme (including amounts andeligibility to claim) by visiting its websitewww.fscs.org.uk or calling 0800 678 1100.ConfliCTS of iNTErESTConflicts of interest may arise between you andus, our employees, our associated companiesor our representatives. To ensure that we treatinvestors consistently and fairly, we are requiredto have a policy on how to identify and managethese conflicts.A summary of our policy is detailed below. A copyof the full policy is available on request from theaddress on page 2.We:(a) will consider the interests of all our customersand treat them fairly;(b) will manage conflicts of interest fairly to ensurethat all customers are treated consistently andto prevent any conflict of interest from givingrise to a material risk of damage to the interestsof our customers;(c) have in place procedures to ensure that staffidentify and report any new conflicts;(d) will keep a written record of any conflicts orpotential conflicts;(e) if appropriate, will disclose any relevant conflictto a customer before undertaking businesswith that customer;(f) will carry out an annual review to identify anynew conflicts; and(g) will ensure new business developmentsidentify any new conflicts of interest.This policy applies to any third party to whom wedelegate any of our functions.Our right TO TErminate your aCCOuntWe have the right to terminate your PortfolioInvestments account with 30 days’ notice. SeeClause B.17 in the Portfolio Terms and Conditionsfor more information about our right to terminate.
34INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSTHE INVESTOR PORTFOLIO SErviCETERMS AND CONdiTIONS.This section contains the IPS Terms and Conditionsfor Investor Portfolio Service (IPS). These IPS Termsand Conditions are separate from, and should be readalongside, the Product Terms and Conditions for therelevant IPS Product(s) that you hold.IPS currently offers the following Products:• Portfolio Investments(Unit trusts, OEICs and ISAs),• Portfolio Bond (IPS), and• Portfolio Plus Self Invested Personal Pension(PPSIPP).These IPS Terms and Conditions, together with yourProduct Terms and Conditions, set out the legalagreement that applies between you and us in relationto your investment through IPS.The IPS Terms and Conditions, which aregoverned by English law, shall apply to yourAccount as soon as we accept your correctlycompleted Application, and payment whererequired, for a Product. The informationcontained in these IPS Terms and Conditionsand the Application is based on ourunderstanding of current legislation andHM Revenue & Customs practice and could beaffected by changes in legislation and practice.In the event of any conflict between the IPSTerms and Conditions and your ProductTerms and Conditions, the Product Termsand Conditions will always prevail.In the event of any conflict between the ISARegulations or any other Regulations orlegislation relating to your Account, and the IPSTerms and Conditions, the ISA Regulations and/or the other Regulations/legislation will alwaysprevail.The IPS Terms and Conditions and allcommunications will only be available inEnglish. All communications you receive fromus will be by letter, telephone or email unlesswe agree with you otherwise.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS35A.1 DEfiNITIONSThese definitions refer to these IPS Terms and Conditions.“Account” The account that we open in your name torecord investments that you make through IPS.“Adviser” A person authorised by the FSA to conductinvestment business, including acting as a financialadviser.“Application” An application, including an applicationform, completed by you or on your behalf to invest in theAccount through a Portfolio Investment, Portfolio Bond ora PPSIPP, or to add money to the IPS Cash Account.“Assets” Investments, income, interest, cash balances andany other rights and entitlements from time to time heldwithin your Account.“Bank” The bank or banks appointed from time to timeby IPS to provide banking services to IPS. Full and up-todatedetails of the banks with which money is held can beobtained by writing to our Customer Services Address, oronline at www.onlineips.co.uk/accountrates“Business Day” Any day when the London StockExchange is open for business.“Cash Reserve” A Client Money Account within your ISAused solely for money destined for eventual investment inone or more of the Funds offered by IPS.“Client Money Account” A current or deposit accountthat is in our name at a bank, but includes in its titlean appropriate description to indicate that it holdsonly clients’ money in accordance with our regulatoryresponsibility and is used to hold the money of one ormore clients.“Client Reference” The number assigned to the accountwe hold in your name to record investments you makethrough IPS.“Customer Service Address” The contact addressfor sending Portfolio Investment and Portfolio Bondinstructions, in case of enquiries and complaints.“IPS Cash Account” Client Money Account(s) that can beused to process or hold Monies to be invested in PortfolioInvestments, or paid out to you (such as a withdrawal orincome payment). The IPS Cash Account is specific toPortfolio Investments.“IPS Terms and Conditions” These Terms and Conditions,referring to the service offered by IPS.“ISA” Your stocks and shares Individual Savings Accountas defined by HMRC.“Monies” Any client money held within a Client MoneyAccount, or the IPS Cash Account.“Nominated Bank Account” A UK bank or buildingsociety account of yours which is associated with your IPSAccount as in Section A.3.“Payment” Money being added to or withdrawn from aPortfolio Investment or the IPS Cash Account.“Platform Account Reference” The number assigned toyour IPS Cash Account used for payments into and out ofthe IPS Cash Account. If you hold Portfolio Investmentsas joint holdings or with a reference (“designation”) youmay have more than one IPS Cash Account and thereforemore than one Platform Account Reference. Please see therelevant Product Documents for further details.“Portfolio Bond” The Legal & General Portfolio Bond (IPS).A single-premium life assurance contract made up of aseries of identical policies, used for investment purposes.See the Portfolio Bond (IPS) Product Guide for moreinformation.“Portfolio Investments” Our collective investmentoffering, made up of unit trust and OEIC investments,including these investments held within an ISA.“PPSIPP” Portfolio Plus Self-Invested Personal Pension –the pension product available through IPS.“Product” An investment offered through IPS as listed inSection A.2.“Product Documents” The literature provided to you foreach Product you apply for, as amended from time to time.These documents are listed in the Product Terms andConditions for each product.“Product Terms and Conditions” The Terms andConditions for a specific IPS Product (as opposed to theseIPS Terms and Conditions).
36INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS“Regulations” The relevant Regulations that apply toyour investments, as specified in the relevant ProductDocuments.“We”, “us” or “our” Refers to the Legal & General Groupand the companies within it. IPS services and investmentproducts are provided by Legal & General (PortfolioManagement Services) Limited and Legal & GeneralAssurance Society Limited.“Written” or “in writing” An instruction that you havesigned.“You” and “your” The Account holder(s), including theindividual(s), who has applied to open an Account underthese IPS Terms and Conditions. Where appropriate thismay include any company or other corporate body, a trustand the trustees.A.2 Our ROLEA.2.1 GENEralIPS allows you to invest in a range of Products. It can alsomake it easier for you to keep track of and manage yourinvestments. You can currently invest in the followingProducts: Portfolio Investments; Portfolio Bonds; and aPortfolio Plus Self-Invested Personal Pension (PPSIPP).IPS offers services by post, telephone, and online whereavailable.A.2.2 addrESSCorrespondence about our service should be sent to theCustomer Service Address:For postal instructions and enquiries about PortfolioInvestments and Portfolio Bond:Investor Portfolio ServicePO Box 1112ChelmsfordCM99 2UXFor postal instructions and enquiries about PPSIPPs:Legal & General SIPPService Centre City ParkThe DrovewayHoveEast SussexBN3 7PYOr such other addresses that we tell you about afteracceptance. Email addresses and telephone numbers forcontacting us are in the Product Documents applicable toyour Product(s).A.2.3 INFOrmaTION WE REQUIREYou must give us all information, which we reasonablyrequest to manage your Account. You agree to informus, without delay, of any change in your circumstancesor status, including in particular any change of address,name, bank account or residency status.In certain circumstances we may need to contact youto obtain more information regarding your investment.Where we do not have an up-to-date address for you,we may make enquiries to identify your new address. Inorder to make these enquiries, we may need to share yourdetails with trusted external parties.To protect you and us from financial crime, we may needto confirm your identity from time to time. We may dothis by using reference agencies to search sources ofinformation relating to you (an identity search). This willnot affect your credit rating. If this fails, we may ask youfor documents to confirm your identity. We may requireverification of your bank details for certain transactions.A.2.4 ACCOUNT REgulaTIONLegal & General (Portfolio Management Services)Limited and Legal & General Assurance Society Limitedare authorised and regulated by the Financial ServicesAuthority. The relevant FSA registration number is in theProduct Documents applicable to your Product. You cancheck this on the FSA Register at www.fsa.gov.uk or bycontacting the FSA on 0845 606 1234. Its address is:Financial Services Authority25 The North ColonnadeCanary WharfLondonE14 5HSA.3 OPENING AN ACCOUNT WITH IPSA.3.1 ACCEPTANCEWe will set up your Account when we receive your firstfully completed Application and payment (where required)for a Product. We will inform you, or your Adviser if youhave notified us that you have one, promptly if there areany problems with your Application or, alternatively, thatyour Application has been accepted. You cannot set up anAccount solely with a Payment into the IPS Cash Account.Your original investment must include an IPS Product.A.3.2 YOUR righT TO CANCELSee the Product Terms and Conditions for details aboutspecific Cancellation Rights for those Products. If youchange your mind about investing with IPS, you cancancel or close the Product(s) that you’ve bought andthis will also close your IPS Account. See Section A.11.2Termination for more information.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS37A.4 IPS CLIENT MONEY ACCOUNTSA.4.1 CLIENT MONEY ACCOUNTS – GENEralWe deposit all Monies that we hold for you in one or moreClient Money Accounts that we maintain specifically foryou or for our clients generally. We do not currently payinterest on Monies held in the Client Money Accounts thatwe maintain for our clients, apart from Monies in the IPSCash Account, the Cash Reserve, and the member’s SIPPbank account. We keep all Monies that we hold in a ClientMoney Account separate from our own money and hold itunder trust with the Bank.A.4.2 IPS CASH ACCOUNT – PORTFOLIOINVESTMENTS ONLYWhen you open an Account, we also open an IPS CashAccount for you, and provide you with a Platform AccountReference to manage the Account. The IPS Cash Accountis a Client Money Account maintained specifically for you.Monies for investment into Portfolio Investments canbe made through the IPS Cash Account. The IPS CashAccount can also hold Monies from Payments andwithdrawals from your Portfolio Investments, andPayments can be sent from the IPS Cash Account to yourNominated Bank Account. You can also make Paymentsinto the IPS Cash Account by cheque or by bank transferfrom your Nominated Bank Account, using your PlatformAccount Reference.Please note that withdrawing from an ISA into the IPSCash Account will mean losing the ISA tax benefits onthat money.A.4.3 OTHER CLIENT MONEY ACCOUNTSThere are also other Client Money Accounts. There’smore information about these in the relevant ProductDocuments.Cash Reserve – Portfolio Investments ISAs only.If you invest in an ISA, the Cash Reserve will be availableto you. The Cash Reserve allows you to move cash froma fund and place it into the Cash Reserve without losingthe ISA status on the cash being moved. Money can beheld in the Cash Reserve only temporarily and this moneymust be destined for investment back into a fund withinyour ISA.Member’s SIPP bank account – PPSIPPs only withinthe PPSIPP, when you first self-invest or take incomewithdrawal, you will have a member’s SIPP bank accountset up with a Bank. This is used to pay any charges andfees, hold cash to facilitate buying and selling self-investedassets and to facilitate income withdrawal payments inrelation to the PPSIPP.A.4.4 INTERESTThe rate of interest payable by us on the IPS CashAccount, the Cash Reserve, and the member’s SIPP bankaccount will fluctuate. Details of the current interest ratescan be found at www.onlineips.co.uk/accountrates orfrom IPS Customer Services.A.4.5 TAXATION IN RELATION TOYOUR ACCOUNT IPSCash Account.Interest received on the IPS Cash Account is taxable asincome. It is paid net of 20% tax, so basic-rate taxpayershave no further tax to pay on it. Higher-rate taxpayers mayhave an additional tax liability. Tax treatment will dependon your individual circumstances and may change in thefuture. Non-taxpayers and individuals who qualify for the10% starting tax rate on savings may be able to reclaimtax. More information and the relevant forms are availablefrom your tax office or from the HM Revenue & Customswebsite www.hmrc.gov.ukCash Reserve and member’s SIPP bank account.Interest received on the Cash Reserve and the member’sSIPP bank account is not currently taxable as income.However, interest received on the Cash Reserve is subjectto an HMRC flat-rate charge of 20%.A.4.6 NOMINATED BANK ACCOUNTIn order to receive income payments from PortfolioInvestments, you must give us details of your NominatedBank Account. Your Nominated Bank Account is a UK bankor building society account (held with a UK branch) ofwhich you are a named holder. We will ask you for detailsof your Nominated Bank Account when you first apply forPortfolio Investments.You can have only one Nominated Bank Account, forPayments to and from your IPS Cash Account, at anygiven time. It must be a bank or building society accountheld with a branch in the UK and held in your name.Withdrawal Payments from Portfolio Investments andPayments from Portfolio Bonds and PPSIPP can bemade to different bank details from your Nominated BankAccount. Please see the relevant Product Documentsfor more details.Once we have verified your Nominated Bank Account, itcan also be used to transfer Monies to and from your IPSCash Account. If you’ve chosen to receive income fromany of your Portfolio Investments, the income Paymentswill be paid to your IPS Cash Account and sent to yourNominated Bank Account.
38INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSYou can instruct us at any time to change your NominatedBank Account. You can provide us with new bankor building society account details to replace yourNominated Bank Account. Subject to completing anynecessary checks, we will make this change, althoughpayments due to be paid to you within that period maystill be sent to your previous Nominated Bank Account.A.4.7 DEPOSIT PROTECTIONIPS maintains its Client Money Accounts with oneor more selected leading banking institutions. If youwould like any more information about the bankswe’re using, you can see this information atwww.onlineips.co.uk/accountrates, or by writing to theCustomer Service Address. We can change, add andremove banking providers at our discretion.If the Bank that provides this Client Money Accountcannot pay us that money, you may not receive all yourmoney back. We are not responsible to you if the Bankthat provides this Client Money Account does not pay thismoney back.If the Bank providing the Client Money Account isunable to pay your money back, you may be entitled tocompensation from the Financial Services CompensationScheme (FSCS). Any claim is currently limited by the FSCSto the first £85,000 you hold with that Bank or buildingsociety, and so any money you hold in other accountswith that Bank would count towards this limit. This limitis subject to change – please see www.fscs.org.uk fordetails. This refers to money held in a Client MoneyAccount, not when invested within a Product. Please seethe Product Documents for your relevant Product forinformation about FSCS compensation on investments.A.4.8 GOOD diSChargEWe will pay any amounts owing to you under or inconnection with these IPS Terms and Conditions intoyour Nominated Bank Account. Any such paymentwill be a good discharge of our obligation to pay therelevant amount.A.4.9 DOrmaNT BALANCESIf there have been no transactions in a Client MoneyAccount that we maintain for you, for a period of at leastsix years (other than routine charges, interest and similaritems), we may write to you, and/or your Adviser if youhave one and we have their details, at your last-knownaddresses, informing you of our intention to cease treatingthat balance as client money. You will have 28 days tomake a claim for the Monies held on your behalf, afterwhich they will lose the protection of being held in aseparate Client Money Account. However, we will still paywhat is due to you if you subsequently claim payment. Wewill make and retain records of all balances released fromClient Money Accounts.A.5 OWNERSHIP OF PRODUCTSIPS is a service that brings the administration of theProducts together in one place. IPS holds PortfolioInvestments on your behalf through a Nominee.This means the way in which you hold your PortfolioInvestments through IPS is different from the relationshipyou would have with the fund manager if you held theinvestments directly. Where your Product is held througha Nominee, you remain the beneficial owner of the assets.Portfolio Bonds and PPSIPPs are held directly by you butyou can invest in funds managed by companies otherthan Legal & General – please see your Product Guide orMember’s booklet for more information.A.6 DOCUMENTATIONA.6.1 ACCOUNT CONfirmaTIONOnce your Account has been set up, we will send youa letter confirming your Client Reference and PlatformAccount Reference.A.6.2 INFOrmaTION ON YOUR INVESTMENTSYou can contact us at any time for information on yourinvestments, such as valuations and illustrations. Youcan also contact your Adviser, if you have one, forinformation. You can also register for online servicing andget online access to statements, valuations and historiccorrespondence that’s been sent to you. Our CustomerService Address for information and registering for onlineservicing can be found in Section A.2.2 of these IPS Termsand Conditions.A.6.3 ACKNOWLEdgiNG IPSCASH ACCOUNT INSTRUCTIONSWhen you add or withdraw Monies from the IPS CashAccount, we send you a letter confirming your transaction.A.6.4 IPS CASH ACCOUNTTax DOCUMENTATIONYour annual statement will confirm the tax you’ve paid inthat year. A tax voucher will also be sent to you with yourannual statement. If you’re not due to receive a statementbut you are due a tax voucher, we will also send you acertificate showing the tax you’ve paid.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS39A.6.5 STATEMENTSWe will send you an annual statement which will show avaluation and all the transactions on the investments inyour Account for the previous 12 months. Details of theexact statement date are available from us by writing tothe Customer Service Address.A.7 makiNG PaymENTS INTOTHE IPS CASH ACCOUNTYou can add money to the IPS Cash Account at the sametime as or after you open an IPS Account and an IPSProduct. You can add money by cheque or bank transferfrom your Nominated Bank Account. You can also chooseto hold money withdrawn from Portfolio Investments inthe IPS Cash Account.A.7.1 BY CHEQUEYou can add to your IPS Cash Account by sending us aninstruction and cheque, quoting your Platform AccountReference as the reference.A.7.2 BY BANK TRANSFER frOM YOURNOMINATED BANK ACCOUNTYou can add money to your IPS Cash Account by banktransfer to sort code 16-04-00, account number 31256358,using your Platform Account Reference as the referencefor the payment. We will process your transfer instructionwithin one Business Day of receipt. Where you provide aPayment with an instruction to hold this in the IPS CashAccount, we will put this into the IPS Cash Account nolater than the Business Day after we receive the instructionand Payment.A.7.3 frOM YOUR PORTFOLIO INVESTMENTSWhen you provide us with an instruction to withdrawfrom your Portfolio Investments, you can instruct us topay this into your IPS Cash Account instead of paying itinto your bank account. We will hold the Monies in the IPSCash Account until you withdraw the Monies to your bankaccount or invest in a Fund(s).A.8 WITHDRAWALS frOM YOurIPS CASH ACCOUNTYou can withdraw Monies from your IPS Cash Accountby writing to the Customer Service Address. We requirethe signatures of all joint holders before we can processthe withdrawal.If you withdraw cash held in the IPS Cash Account, or ifthe IPS Cash Account is closed by us, the proceeds will besent to your Nominated Bank Account within two BusinessDays of the date we receive the withdrawal instruction,or Portfolio Account closure. We may delay payment ifwe reasonably believe that we should delay payment foryour protection or as required by law, or where this isnecessary in order to verify your identity. This means thatsometimes, payment may be made outside the periodoutlined above. Where a withdrawal is made shortlyafter a Payment is made, the proceeds will be paid onlyonce we are assured of cleared funds in respect of thatPayment. This will be within 14 days of the date we receivethe withdrawal instruction.Where we have good reason to query a signature or thevalidity of an instruction, we will not pay you until thequery has been resolved to our reasonable satisfaction.While we are waiting for any such query to be resolved,the proceeds will remain in the IPS Cash Account. Wemay deduct an amount which we reasonably estimatewill be enough for us to meet any tax liability for which wemust account to HM Revenue & Customs for you underthe Regulations, where applicable. We may delay payingany sale proceeds and cash balances until we know thatall Payments made by you have cleared and we havereceived all amounts which you owe to us.You may also make a withdrawal from your Accountdepending on the type(s) of products you hold.Please refer to the relevant Product Documents formore information.A.9 IPS ACCOUNT PROCEdurEFOllOWING DEATHThe IPS Account will close once the Products and anyMonies held in the IPS Cash Account (where relevant)have closed or are no longer associated with theAccount, following the procedures detailed in the ProductDocuments. For Monies held in the IPS Cash Account inmore than one name, the Account will continue in thename(s) of the surviving investor(s).For Monies held in your sole name, when we have allthe documentation we reasonably need to establishproof of death and proof of entitlement in order to finalisethe arrangements, on instruction from the executor wewill either:• transfer the Monies to an IPS Cash Account(s) in thename(s) of the beneficiaries, and/or• withdraw the Monies within one working day of theinstruction and send the proceeds to your personalrepresentatives within two working days.Any transfers and/or payments to the beneficiaries will besubject to any deduction for tax liability as explained inSection A.4.5 above.
40INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSIf your personal representatives require an Account tobe opened with us in another investor’s name, we mayrequire verification of identity from the new Accountholder. The payment of any proceeds or the setting-upof any new Account may also be delayed until after wehave verified the identity of the executor. These IPSTerms and Conditions shall be binding on yourpersonal representatives.A.10 FEES, ChargES AND EXPENSESThe costs of investing differs between Products, andyou should see the applicable Product Documents fordetails of any fees, charges and expenses, and any moreinformation about payments we receive for our ownbenefit. There is no charge for having or using the IPSCash Account.A.11 variaTION, TErmiNATION ANDAMENDMENT OF TERMSA.11.1 CHANGES TO THESE TERMSOver time, circumstances can change and this may mean(when we have a valid reason) we need to change theseIPS Terms and Conditions and/or your Product Termsand Conditions.For example:(a) Our investment rights and powers are removed orrestricted.(b) There are changes to the way we are taxed.(c) There are changes to the way you are taxed.(d) Exceptional circumstances make it impossible for usto do what we say we will.(e) There are changes in laws, regulations, consumerstandards, and so on.(f) We need to respond to changes in tax rates, interestrates or the costs of providing the Account.(g) We add, change, or remove features of our InvestorPortfolio Service offering. Any changes must meet theRegulations (if appropriate) and be permitted underthe Financial Services Authority Handbook. We willprovide at least 30 days’ notice of any change, if thatchange is considered to be to your disadvantage.Please see the next section about closing yourAccount if you are unhappy with any such changes.A.11.2 TErmiNATIONYour Account will terminate when you withdraw all theAssets you hold from the Products you hold. This caninclude transferring any Portfolio Investments and/or aPPSIPP to another manager or provider as appropriate.If you’re unhappy with any changes we make to yourIPS Terms and Conditions, you may terminate the IPSAgreement by writing to the Customer Service Address.This may have an impact on any Products that you hold.For details of any impact on your Product(s) pleasecontact the Customer Services detailed in your ProductDocuments to discuss your options. Legal & General mayterminate these IPS Terms and Conditions at any time bygiving you a minimum of three months’ notice.Depending on the Product(s) you hold, you may also beable to terminate your Account at any time by giving usnotice in writing. Please refer to the relevant ProductDocuments for further information on closing specificproducts.A.12 LIABILITIESWe classify you as a retail client under the FinancialServices Authority’s rules. This means you’ll receive thegreatest level of regulatory protection available underthose rules. Except as otherwise provided in these IPSTerms and Conditions, we will be responsible to you forany loss, injury or damage suffered by you due to ournegligence, default, or fraud; any material breach by us ofthese IPS Terms and Conditions; or any failure, delay (thatwas within our control) or error by us, or the Nominee, incarrying out your instructions.We will not be liable to you for indirect or unforeseeablelosses such as loss of business, loss of goodwill, loss ofopportunity, loss of profit or consequential losses; or ourfailure to comply with these IPS Terms and Conditionsdue to unforeseen circumstances beyond our reasonablecontrol or due to obligations under applicable laws.You will be responsible for any losses suffered by you andus if you act fraudulently or if you allow another person touse your security details or your Account. You will also beresponsible for any reasonable losses suffered by you andus as a result of your material breach of these IPS Termsand Conditions or if you provide inaccurate or untrueinformation to us.A.13 GENEralA.13.1 TRANSFErriNG OUR duTIESWe may appoint agents to carry out our obligations inmanaging your Account as long as this is allowed bythe Regulations and the Financial Services AuthorityHandbook. However, we will not do so unless we aresatisfied that the agent is competent to perform suchtasks. We will be liable for the acts of any agents weappoint.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS41You consent and agree that we may assign to anyLegal & General Group company all or any of our rightsand obligations under these IPS Terms and Conditions.We will notify you of any such assignment.A.13.2 daTA PROTECTIONWe take your privacy very seriously. We use the personalinformation collected via this form and any otherinformation that you provide to us (“your information”) forthe purposes of:1. Providing you with our products and services anddealing with your enquiries and requests;2. Administering your investment;3. Carrying out market research, statistical analysis andcustomer profiling; and4. Sending you marketing information (by post,telephone, email and SMS) about products andservices of companies in the Legal & General groupand of third parties whose products and servicesLegal & General offers to its customers.By applying for an IPS Product, you agree to receive theinformation as described in 4 above, unless you tell usotherwise. Given the global nature of our business, wemay need to transfer your information to countries outsidethe European Economic Area in order to provide ourservices to you.Disclosures: We will disclose your information toother companies within the Legal & General group ofcompanies, regulatory bodies, law enforcement agencies,future owners of our business and suppliers we engage toprocess data on our behalf. If you have been dealing witha financial adviser, we will give them information aboutyour Product and, where appropriate, provide them withother information about your dealings with us to enablethem to give you informed advice. Where you have beenintroduced to us by a bank or a building society, we willshare your information with them to enable them to:(a) carry out market research, statistical analysis andcustomer profiling; and(b) send you marketing information about their productsand services and products and services of companiesin the Legal & General group and of third partieswhose products and services Legal & General offersto its customers.By applying for an IPS Product through a bank or buildingsociety, you agree to receive the information as describedin (b) above by post or telephone, unless you tell usotherwise by writing to our Customer Service Address.Access: You have the right to ask for a copy of yourinformation in return for payment of a £10 fee. To obtaina copy of your information, please write to us at ourCustomer Service Address.
42INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSYOUR PORTFOLIO INVESTMENTSTERMS AND CONdiTIONS.This section contains the Portfolio InvestmentsTerms and Conditions, applying to unit trust andOEIC investments, including Individual SavingsAccounts (ISAs).These Portfolio Investments Terms and Conditionsshould be read alongside the IPS Terms andConditions. These Portfolio Investments Termsand Conditions, together with the IPS Termsand Conditions, set out the legal agreement thatapplies to your investment through IPS.The Terms and Conditions, which are governedby English law, shall apply to an InvestmentAccount/ISA as soon as your Application isaccepted by us. In the event of any conflictbetween the ISA Regulations and the PortfolioInvestments Terms and Conditions, the ISARegulations will always prevail.The Terms and Conditions and all communicationswill only be available in English. All communicationsfrom us will be by letter, telephone or email unlesswe agree with you otherwise.CONTACTING USWrite to usYou can write to us with instructions on yourinvestment, or if you have any questions orwant to make a complaint:Investor Portfolio ServiceLegal & GeneralPO Box 1112ChelmsfordCM99 2UXCall usYou can call our Customer Services on0845 272 0089for general information on our rangeof investments or for questions about yourinvestment.We’re open 9.00am to 5.30pm, Monday toFriday. Call charges will vary. We may recordand monitor calls.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS43B.1 DEfiNITIONS“Accumulation Unit” is a Unit where any income earnedby the Fund, after tax, is retained in the Fund rather thanpaid out as a distribution. This means the capital value ofthe Unit increases.“Adviser” means a person authorised by the FSA toconduct investment business, including acting as afinancial adviser.“Application” means the printed application form,provided by us, which you completed and signed. It alsocovers any non‐written application, as agreed betweenus and you, which provides the same information,declarations and authority as the printed form.“Authorised Fund Manager” means the companyresponsible for managing a Fund. This is the unit trustmanager for a Unit Trust or the authorised corporatedirector for an OEIC.“Business Day” is any day when the London StockExchange is open for business.“Cash Reserve” means a Client Money Account withinyour ISA used solely for ISA investments while awaitinginvestment in a Fund.“Client Money Account” means a current or depositaccount that is in our, our nominee’s, or our agent’sname at a bank, and includes in its title an appropriatedescription to indicate that it holds only clients’ money inaccordance with our regulatory responsibility and is usedto hold the money of one or more clients.“Dealing Day” means any Business Day or the nextpossible Business Day.“Dealing Deadline” means the time by which we mustreceive your instruction in order to buy, switch or sellUnits. You can find the Dealing Deadline for a Fund in our‘Important Fund Information’ document.“Direct Debit Dealing Day” means, if you are makingRegular Payments by Direct Debit, the Business Day onwhich we request your Direct Debit Payment. This willbe the day selected on your Application, or if this is not aBusiness Day the next Business Day.“Distribution Unit” (or “Income Unit”) is a Unit or sharetype where any income earned by a Fund, after tax, canbe paid out to Unit holders as a distribution. You canfind the payment frequency and date for a Fund in theProduct Documents, or from us.“Fund” means an authorised Unit Trust, or OEIC, orwhere applicable a sub‐fund of these in which you caninvest within your Portfolio Account and this includes anyFund transferred to your Portfolio Account from anothermanager. Details of the Funds currently offered by us aredetailed in the Product Documents or are available fromus upon request.“HMRC” means Her Majesty’s Revenue & Customs. It isresponsible for collecting taxes.“Investment Account” means the part of your PortfolioAccount that is not an ISA.“IPS Cash Account” means Client Money Account(s) thatcan be used to process or hold Monies to be invested in aFund, or paid out to you (such as a withdrawal or incomepayment). The IPS Cash Account can never be held withinan ISA.“ISA” means your stocks and shares Individual SavingsAccount as defined by HMRC. Each tax year’s ISA is aseparate subscription.“KIID” means the current Key Investor InformationDocument in respect of the Fund.“Monies” means any client money held within a ClientMoney Account, the Cash Reserve, or the IPS CashAccount.“Nominee” is any company appointed by us in whosename Assets in a Portfolio Account, other than cash, willbe registered.“OEIC” means an Open-Ended Investment Company(“OEIC”) authorised in the UK by the Financial ServicesAuthority.“Payment(s)” means any lump sum or regular paymentmade to the Portfolio Account, or payment for a Fundmade from the IPS Cash Account. For an ISA Transfer thisincludes the Transfer Value. Only lump sum Payments canbe made into the Cash Reserve or the IPS Cash Account.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS45If we believe an Application is incomplete then:(d) If your Application for an ISA does not include yourNational Insurance number, date of birth, full name,address and postcode, it will be accepted subject toyou providing the missing information within 30 daysof requesting it from you. If we do not receive thisinformation within this timeframe, your ISA will beconverted to an Investment Account and will remaininvested in Units.(e) If, 30 days after writing to you to request outstandinginformation which we reasonably require to verifyyour identity, we are still waiting to receive thatinformation, we will return your Application. Units willbe repurchased within 14 days of the expiry of the 30-day period and you will receive the market value on thedate of repurchase. Payments will be returned to theoriginal source of the contribution.(f) If you have not confirmed that you have been providedwith the current KIID for the relevant fund(s), we willreturn your application, including cheques whereapplicable, no later than the Business Day after wereceive them.If we have to close an ISA because your Application isincomplete, your Payment will still count towards yourannual ISA allowance.Where you make an Application for an ISA other than inWriting, we will confirm all the details you provide at thetime of Application. Faxed or email Applications will notbe accepted unless we agree to do so in advance.The minimum allowable Payment, or transfer of any Fundyou already hold with another manager, into a PortfolioAccount is that detailed on our Application form.If a Payment has not cleared within 14 days of the Paymentinstruction, we reserve the right to cancel any Unit dealsrelating to that Payment, or cancel the instruction in case ofthe Cash Reserve. If it is the first Payment into the PortfolioAccount and the Payment has not cleared within 14 days ofthe Payment instruction then in addition to the above, wereserve the right to close the Portfolio Account.We reserve the right to reject an application. You mustensure that the information you provide to us is accurateand we are entitled to rely upon the accuracy of theinformation contained in your Application.B.3 SUBSEQUENT TRANSACTIONSOnce you have invested, in order for us to accept certainsubsequent transactions, you must have confirmed onyour application form that you have been provided withthe KIID for the fund(s) you are transacting in. Thesetransactions are:• Additional investment into a fund you hold• New or increases to Direct Debits• Unit conversions – moving between Distribution andAccumulation Units in the same fund• Changing from receiving income to reinvesting income• Fund switches• Unit Trust to ISA switches• ISAs transferred to us as cash from another manager.For all subsequent transactions listed above, we will beunable to accept your instruction if you have not confirmedin your application that you have been provided with theKIID for the fund(s) you wish to transact in. If you have notconfirmed KIID provision, we will return your application,including cheques where applicable, no later than theBusiness Day after we receive them.If you currently invest in a fund, or are transferring anexisting holding to us as a Portfolio Account, for whichno KIID is available, you will not be able to make anyof the transactions listed in Clause 3. If we do receivean instruction to make one of the relevant transactionswe’ll return your application, including cheques whereapplicable, no later than the Business Day after we receivethem. Your investment will continue until you withdraw.B.4 CANCEllaTION righTSWhen you make a lump sum Payment or transfer your ISAfrom another manager you will be given a right to cancelyour investment that relates to that Payment. For Paymentby lump sum, a cancellation notice will be sent to you bypost when we accept your Application and for each furtherinvestment, giving you your 14-day cancellation period.For Direct Debit instructions, you will be given the right tocancel your investment that relates to that first payment.Cancellation rights start when we send you a letterconfirming your Direct Debit and finish 14 days later. Pleasenote that if you cancel a Direct Debit instruction it cancelsthe investment you are making as well as the Direct Debitinstruction itself.A cancellation notice will be sent to you for ISA transferswe receive as cash when we receive the Transfer Valuefrom the other manager. For lump sum Payments intoa Fund or the Cash Reserve, and for ISA transfers fromanother manager, you have 14 days from the day youreceive the notice of your right to cancel to withdrawfrom the transaction. This can be done by returning yourcompleted cancellation notice form to us at the address inClause 32 by the end of this 14-day period. For your firstPayment by Direct Debit you have 14 days from whenyou receive the cancellation notice to withdraw from thetransaction. If you wish to cancel you must write to us atthe address in Clause 32 by the end of this 14-day period.
46INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSIf you exercise your right to cancel we’ll refund any initialcharges you paid. The maximum amount you will getback, even if any gain has been made, is the amount youinvested in the Portfolio Account. If the value of Units inany Fund has fallen by the day we receive the notice ofcancellation from you, you will get back less than youinvested in that Fund. This is because an amount equalto that fall in value will be deducted from any refund. Wedo not offset any gain made in one Fund against any lossmade in another Fund. If you exercise the right to cancelan ISA transfer, we will close your ISA and you will loseyour ISA entitlement relating to that transfer. Followingcancellation, we will return your proceeds to you, once weare certain of cleared funds in respect of your Payment(banks and building societies may take up to 21 workingdays to fully honour any Payment). Alternatively, you cantransfer your ISA back to the original ISA manager orto another ISA manager by completing an ISA transferform(s). Any proceeds on cancellation will be returned tothe original source of the Payment except for ISA transfersand in exceptional circumstances. Cancellation rights donot apply to switches between Funds. No cancellationrights apply for the transfer of funds you hold elsewhereinto the Portfolio Account.B.5 HOW CASH PaymENTS arEINVESTEDWe will pay all Payments into a Client Money Account orthe IPS Cash Account no later than the Business Day afterwe receive them. We may pass client money to a ClientMoney Account in our agent’s name to allow them to carryout transactions on our behalf.If we receive a Payment for an investment that is in excessof the amount stated in your Application, or if you make aPayment for an ISA that is in excess of the limits allowedby the Regulations, we’ll retain this excess in the IPS CashAccount and contact you and/or your Adviser (if you areusing one) for your instructions.We expect the manner in which you invest in the Fundsto reflect their objective of generating steady return overthe medium to long term (typically five years or more).If, in our reasonable opinion, your trading activityrepresents frequent trading, we may refuse to buy Unitson your behalf.Application together with a lump sum Payment (otherthan a Payment for the IPS Cash Account or the CashReserve) before a Fund’s Dealing Deadline, the Paymentless any charges described in Clause 11 will be investedin Units of the selected Fund(s) at the price calculated atthe next Valuation Point following that Dealing Deadline.Your Payment will be invested in Accumulation Units orDistribution Units as selected on your Application.If a Payment is received after the Dealing Deadline on anyday, it will be invested at the Valuation Point after the nextDealing Deadline. Regular Payments will only be collectedonly by Direct Debit. The Payments, less any chargesdescribed in Clause 11, will be invested at the ValuationPoint on each Direct Debit Dealing Day. You cannot makeRegular Payments into the Cash Reserve or the IPS CashAccount. After we have accepted your Application and wehave received any information we reasonably require toverify your identity, the first Direct Debit will be collectedon the first Direct Debit Dealing Day after a period of 14days. No collection will take place until we have receivedall outstanding information. A new Direct Debit Instructionwill be required if the first monthly contribution will bemore than 90 days after the Application was accepted.Regular Payments will be invested in Accumulation Unitsor Distribution Units as selected on your Application. Ifyou wish to cancel your Direct Debit, we must receiveWritten instructions, or any other method agreed by us, atleast eight Business Days before the Direct Debit DealingDay. Any increase in monthly Payments will be collectedon the same day as the existing Direct Debit. If you don’tspecify the Fund(s) you wish to invest the increase in,we’ll be unable to process your request. If, after a transfer,any further Payments are received from your previousmanager, they will be invested in your Portfolio Account inthe same Funds, Unit class and proportions as the originaltransfer.If an instruction is received to buy Units before the DealingDeadline, then Units will be bought at the price applicableat the next Valuation Point using the price calculated by theAuthorised Fund Manager in accordance with their Fundprospectus after deducting any charges as described inClause 11. The actual price used or any dilution levy foryour deal will be the price provided, or levy made, by theAuthorised Fund Manager. These will be shown on yourcontract notes or statements. See the Product Documentsfor more information on pricing.B.6 PENDING TradESPending trades allow you to provide us with instructions tobuy units in your investment account or ISA, but delay thepurchase if you do not have sufficient money to cover thePayment, in your IPS Cash Account. You must send us apending trade cheque payment form along with a chequeto cover the purchase. Once sufficient funds are availablein your IPS Cash Account, we’ll carry out your instruction.You will receive the price as per valuation point on theday that sufficient funds become available. If sufficientfunds are not available within 14 calendar days of yourinstruction, the trade will not be placed. If funds become
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS47available in your IPS Cash Account after this 14-calendardayperiod has expired, then they will remain uninvestedin your IPS Cash Account until such time as we receivesubsequent instruction.B.7 OWNERSHIP OF ASSETSAND DEALING POLICYWe are responsible for the safe custody of all Assetsheld in your Portfolio Account. We register your PortfolioInvestments in the name of our Nominee. We may changethe Nominee company, and if we do we will let you know.We are responsible for the acts and omissions of ourNominee. Our Nominee is not itself an authorised personunder the Financial Services and Markets Act 2000; it canonly hold investments and does not carry on business in itsown right.Your Portfolio Investment is held in the same name asthose of other IPS investors and we do not identify eachinvestor’s holdings by separate certificates. This meansthat in the event of an irreconcilable shortfall followingthe default of our Nominee, you will share the shortfallproportionally with our other investors. All documentsevidencing title to Portfolio Investments in your PortfolioAccount are held by us or as we direct. We may not lendany of your investments to a third party and we cannot usethem as security for borrowing.When buying or selling Units on your behalf, we willarrange that Units are only bought directly from or solddirectly to the relevant Fund’s Authorised Fund Managerat the relevant Valuation Point as detailed in these PortfolioInvestments Terms and Conditions.You are and remain the beneficial owner of theinvestments in your ISA. Investments made by you willbe held on your behalf as owner, but you must not usethem as security for a loan. You may be able to use theAssets in your Portfolio Account as a loan repaymentmethod, subject to your lender’s agreement. You maynot dispose of or transfer an interest in any Asset whileit is held in your Portfolio Account and you may not create(or have outstanding) any charge or security on or overany such Asset.B.8 CONfliCT OF INTERESTConflicts of interest may arise between you and us,our employees, our associated companies or ourrepresentatives. To ensure we treat investors consistentlyand fairly, we are required to have a policy on how toidentify and manage these conflicts. A summary of ourpolicy is detailed below. A copy of the full policy is availableon request from the address in Clause 32.We:(a) will consider the interests of all our customers andtreat them fairly;(b) will manage conflicts of interest fairly to ensure that allcustomers are treated consistently and to prevent anyconflict of interest from giving rise to a material risk ofdamage to the interests of our customers;(c) have in place procedures to ensure that staff identifyand report any new conflicts;(d) will keep a written record of any conflicts or potentialconflicts;(e) if appropriate, will disclose any relevant conflict toa customer before undertaking business with thatcustomer;(f) will carry out an annual review to identify any newconflicts; and(g) will ensure new business developments identify anynew conflicts of interest.This policy applies to any third party to whom we delegateany of our functions.B.9 INFOrmaTION PROvidEDWe will send you a contract note after each lump sumUnit purchase, which will show the value invested, dateof the purchase, Unit price, number of Units bought, theexecution venue and the time of the transaction. We willalso send you a contract note after any lump sum Paymentinto the Cash Reserve Account which will show the date ofthe investment.Information about each Unit purchase for regular Paymentswill be shown on your Consolidated Confirmation note,sent six months after your annual statement. See ClauseA6.5 of the IPS Terms and Conditions for more informationabout the annual statement.If you elect we will arrange for you to:(a) receive a copy of the annual report and accountsissued to an investor by every company, Unit Trust,OEIC or other entity in which you have investments inyour Portfolio Account; and(b) be able to attend any meetings of investors in everycompany, Unit Trust, OEIC or other entity in which youhave investments in your Portfolio Account; and(c) to vote; and
48INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS(d) to receive, in addition to the documents in (a) aboveany other information issued to investors in eachcompany, Unit Trust, OEIC or other entity in which youhave investments in your Portfolio Account; and(e) exercise voting rights through us or the Nominee atsuch meetings.B.10 INCOMEB.10.1 REINVESTING INCOMEWhere you have chosen Accumulation Units, any incomewill be kept within the value of the Units, increasing theircapital value, and this will be included in the Fund’s Unitprice. Any reclaimed tax credit for ISA Accounts will beused to buy further Accumulation Units in the Fund no laterthan the business day following receipt.If you have chosen Distribution Units, and you’rereinvesting the income, any income and/or an amountequal to the tax credit (if applicable) in respect of Units willbe used to buy further Distribution Units in the Fund nolater than the Dealing Day following receipt. If you invest inmore than one fund and select Distribution Units in Fundsthat have them available, you must choose to have eitherincome reinvested for all Funds, or income paid out to youfor all Funds.All Regular Payments will be invested on the basis thatincome is to be reinvested, unless you tell us otherwise.You authorise us to reclaim any tax credit in respect ofUnits and to reimburse ourselves when we receive thisfrom HMRC. If you are receiving income from a Fund,you can, at a later date, request to have future incomereinvested. If you make this request after a distribution isdue from the Fund, otherwise known as the ex‐dividenddate, but before the income is paid out, this last incomepayment will be paid to your Nominated Bank Account.B.10.2 INCOME Paid OUTYou may, for lump sum Payments into any Fund offeringDistribution Units, choose to receive the income fromyour Portfolio Account. Where you have made this choice,your Payments will be invested in Distribution Units. Anyincome will be paid into your IPS Cash Account shortlyafter it is received by us. If there is any reclaimable taxcredit, we will add this amount to any income payment.a conversion to Distribution Units. You authorise us toreclaim any tax credit in respect of Units and to reimburseourselves when we receive this from HMRC. If a BACSpayment is rejected by your bank then the payment will beadded to your IPS Cash Account shortly after it is returnedto us. Ex‐dividend dates and income payment dates for theFunds are in the Product Documents or available from us.B.11 CHARGESCharges in connection with the Account are as follows.There may be an initial charge for Units bought within theAccount including when investing any income payments.The charge is made by the Authorised Fund Managerand the way it is applied depends on the Authorised FundManager’s method of calculating a Unit price. Detailsof how any initial charge is applied and the method ofvaluation is set out in the Authorised Fund Manager’sprospectus which is available from us on request. TheAuthorised Fund Manager may pay us a proportion of thischarge (details are available on request). Initial charges willnot be applied to conversions between Accumulation andDistribution Units in the same Fund, however you shouldbe aware that the Fund Manager may apply a bid/offerspread for buying and/or selling Units.The Authorised Fund Manager, as manager of the Fund inwhich an Account invests, takes an annual managementcharge payable out of the assets of such Fund. This chargeaccrues daily and is paid monthly to the Authorised FundManager. The Authorised Fund Manager may pay us aproportion of this charge (details are available on request).The Authorised Fund Manager may, for some Funds, take aperformance fee. Details of the annual management charge,any performance fee and any initial charge for the Funds canbe found in the Product Documents or available from us.B.12 CHANGING fuNDSYou can request that some or all of your Units of a Fundare switched into Units of another Fund offered by us. Theminimum amount that can be switched into a Fund is £20and the minimum value that must remain in a Fund is £20.Where you request a switch, Units of the original Fund willbe sold and Units of the new Fund will be purchased asdetailed in the following table.Any income is paid to your Nominated Bank Account onthe seventh Business Day of the month, and consists of allincome payments received between the sixth BusinessDay of the previous month and the fifth Business Dayof the month in which the payment is made. If you havenot requested to receive income, you can, at a later date,request in writing to have income paid to you. Where youcurrently invest in Accumulation Units, this will involveUNIT SALE DEALIf the instruction is received bythe Dealing Deadline, then at thenext Valuation Point.UNIT PURCHASE DEALAt the Valuation Point of the newFund on the day after the saledeal.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS49(Depending on the Valuation Points of the Funds aninvestment may not be reinvested in Units for up to30 hours.)No interest will be paid on the cash holding between thesale and purchase deal. Where you request to switch aspecific amount, the number of Units to be sold will beestimated using the previous Unit price. This will meanthat the amount switched may be more or less than theamount you requested. Where you are making Paymentsby Direct Debit, you may request that any future Paymentsbe invested in another Fund or Funds. We must receivethis request eight Business Days before the day your DirectDebit is collected in order to make the change.B.13 CASH RESERVE (FOR ISAs ONLY)You may request on your Application to put an amount ofmoney into the Cash Reserve instead of investing in Unitsfor your ISA straightaway. You can put an amount up to thewhole of your ISA allowance into the Cash Reserve. Anymoney in the Cash Reserve must be held for the purposeof investment. It is your responsibility to tell us when touse money from the Cash Reserve to buy Units for yourISA. HMRC can request we terminate that part of your ISAheld in the Cash Reserve if it believes there is no intentionof reinvesting into other eligible investments. You mayrequest that some or all of the Units held in your ISA aresold and the proceeds invested in the Cash Reserve. Ifyour instruction is received before the Dealing Deadline,then the Units will be sold at the next Valuation Point. Youshould not consider the Cash Reserve as an ISA investmentas it can be used only for a temporary period after which itmust be reinvested in another eligible ISA investment.The money held in your Cash Reserve can be invested inFund(s) of your choice subject to any minimum investmentamount per Fund as detailed in Clause 12. If yourinstruction is received before the Dealing Deadline, thenthe Units will be bought at the next Valuation Point. Intereston any holdings in the Cash Reserve is added to your ISAon a six-monthly basis except in the circumstances detailedin this Clause. This means that interest may be added to theCash Reserve after you’ve invested in Fund(s) or withdrawnthe money. Where you have switched from a Fund intoyour Cash Reserve, interest is calculated up to the day thatyou switch into a Fund or withdraw from the Cash Reserve,and paid on the next six‐monthly allocation date. Whereyou have invested directly into the Cash Reserve, includingvia an ISA transfer from another ISA manager, no interestis paid if you switch into a Fund or withdraw from theCash Reserve before the next six‐monthly allocation date.All interest will be subject to a flat-rate charge by HMRC,currently 20%. Details about the interest rates can be foundonline atwww.onlineips.co.uk/accountrates, or by contacting us atthe address given in Clause 32.At the end of April and October each year we’ll work outhow much interest you are entitled to and apply that toyour Cash Reserve by the tenth working day of May andNovember respectively. Your annual statement will showany interest allocated to your Portfolio Account.B.14 TAX REClaimSYou authorise us to apply to HMRC on your behalf tomake all appropriate claims for the repayment of, or creditagainst, tax in respect of Units held under an ISA andany income they produce. For this purpose you authoriseus to provide HMRC with all relevant information anddocumentation about you and your Portfolio Account thatmay be required for this purpose.B.15 LIABILITIESWe classify you as a retail client under the FinancialServices Authority’s rules. This means you’ll receive thegreatest level of regulatory protection available underthose rules. Except as otherwise provided in these PortfolioInvestments Terms and Conditions, we will be responsibleto you for any loss, injury or damage suffered by you dueto our negligence, default or fraud; any material breach byus of these Portfolio Investments Terms and Conditions;or any failure, delay (that was within our control) or errorby us, or the Nominee in carrying out your instructions.We will not be liable to you for indirect or unforeseeablelosses such as loss of business, loss of goodwill, loss ofopportunity, loss of profit, or consequential losses; orour failure to comply with these Portfolio InvestmentsTerms and Conditions due to unforeseen circumstancesbeyond our reasonable control or due to obligations underapplicable laws. You will be responsible for any lossessuffered by you and us if you act fraudulently or if youallow another person to use your security details or yourPortfolio Account. You will also be responsible for anyreasonable losses suffered by you and us as a result ofyour material breach of these Portfolio Investments Termsand Conditions or if you provide inaccurate or untrueinformation to us.B.16 MAKING WIThdraWALSYou may make partial cash withdrawals for amounts of£20 or more from the Portfolio Account by Written request,or any other method as agreed by us, before the nextDealing Deadline, provided that the value remaining inyour Portfolio Account is at least £20. Unless a withdrawalis made from the Cash Reserve in which case we willreturn the money to you, Units will be sold at the pricecalculated at the next Valuation Point unless for any good
50INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSreason we need to confirm or check your instruction,signature, or change of your personal details. If the valueof your Portfolio Account subsequently falls below £20 wereserve the right to withdraw the amount invested in thatAccount and pay it to your Nominated Bank Account oryour IPS Cash Account. Where you request to withdraw aspecific amount from your Portfolio Account, other thanthe Cash Reserve, the number of Units to be sold will beestimated using the previous Unit price. This will meanthat the amount withdrawn may be more or less than theamount you requested. You can also request to withdrawsome or all of your investment without selling the Units byrequesting that we transfer the ownership of your Unitsinto your name or the name of your nominee as appointedby you.Where a full withdrawal is requested from a PortfolioAccount where you make monthly Payments, we willalso, unless otherwise instructed, stop the Direct Debit. Ifyou are invested in more than one Fund, and don’t tell uswhich Fund you wish to sell, we will be unable to processyour request. Alternatively, you can make a full cashwithdrawal. If you make a full cash withdrawal from a Fundin which you hold Distribution Units, any distribution and/or reclaimable tax credit that was due to be paid after yourwithdrawal will be paid into your Nominated Bank Accountif you have one, or your IPS Cash Account.Any reclaimable tax credit, from a Fund in which you holdAccumulation Units, that was due to be paid after a fullwithdrawal will be paid into the Fund you withdrew from.B.17 CLOSING AN ACCOUNTOR REPairiNG AN ISAYou may close your Portfolio Account at any time bygiving us Written instructions, or instructions by anyother method agreed with us. When we receive such aninstruction before a Dealing Deadline, except for Monies inthe Cash Reserve, Units will be sold at the price calculatedat the next Valuation Point unless for any good reason weneed to confirm or check your instruction, signature, orchange of your personal details. Where requested, andwithin the timescales requested (subject to a minimumnotice of ten Business Days), we can transfer Units fromIPS to be held directly in your name, rather than sellingthem and paying you their value.We can close your Portfolio Account by giving you onemonth’s prior written notice. In particular, we may need toclose your Portfolio Account if changes to the Regulationsmean that it is no longer feasible to continue to operateit. We may also close your Portfolio Account if we havenotified you that you have failed to meet these PortfolioInvestments Terms and Conditions and you have notrectified your failure within a reasonable time or youcontinue to fail to meet these Portfolio Investments Termsand Conditions.We will not be liable to you for any loss, liability or damageyou may suffer if we close your Portfolio Account due tosuch failure by you to meet these Portfolio InvestmentsTerms and Conditions. If you close your Portfolio Account,any distribution and/or reclaimable tax credit that wasdue to be paid, from a Fund in which you held DistributionUnits, after the account is closed, will be paid into yourNominated Bank Account if you have one, or your IPS CashAccount. Any reclaimable tax credit, from a Fund in whichyou hold Accumulation Units, that was due to be paid afterthe account is closed will be paid back into the Fund.Please note that if any distribution or tax credit is paid intoyour IPS Cash Account or back into a Fund, your PortfolioAccount will then remain open.Where two successive Direct Debit Payments are refuseddue to no fault on our part, we have the right to close yourPortfolio Account if you don’t hold more than £20 in anyof the Funds you‘re invested in. We will tell you if your ISAhas or will become void because we have failed to meetthe provisions of the Regulations. If your ISA becomesinvalid under the Regulations, we will sell enough Units tomake any payment as HMRC may demand. Unless HMRCallows the ISA to be repaired, any remaining Units will beheld outside the ISA in an Investment Account but you willremain the beneficial owner.B.18 WHEN DO WE PAY YOU FORANY WIThdraWALS?When you make a cash withdrawal from a PortfolioAccount, or your Portfolio Account is closed by you orus, the proceeds of the sale of Units will be sent to yourNominated Bank Account, or another bank account in yourname as instructed by you, within five Business Days of thedate that the last Units were sold and priced.Please note that payment may take up to a further fiveBusiness Days to show in your bank account.Where a withdrawal is made shortly after a Payment, theproceeds will be paid only once we are assured of clearedfunds in respect of that Payment.If a BACS or CHAPS payment is rejected by your bankthen the payment will be added to your IPS Cash Accountshortly after it is returned to us.We may pay proceeds by cheque in exceptionalcircumstances. If the cheque remains uncashed, shortlybefore six months from issue the cheque will be stoppedand the monies added to your IPS Cash Account.
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS51If the proceeds of sale are to be held in your IPS CashAccount, they will be transferred to your IPS Cash Accountwithin five Business Days of the date the last Units weresold and priced.If you withdraw cash from the Cash Reserve, or if theCash Reserve is closed by us, the proceeds will be sent toyou within five Business Days of the date we receive thewithdrawal instruction, or Portfolio Account closure.Please note that payment may take up to a further fiveBusiness Days to show in your bank account. If a BACS orCHAPS payment is rejected by your bank then the paymentwill be added to your IPS Cash Account shortly after it isreturned to us.We may pay proceeds by cheque in exceptionalcircumstances. If the cheque remains uncashed, shortlybefore six months from issue the cheque will be stoppedand the Monies added to your IPS Cash Account. Paymentwill be made within ten Business Days of the date that thelast Units were sold or ten days of the date we receive thewithdrawal instruction, or of the Portfolio Account closurein relation to the Cash Reserve.We may delay payment if we have outstanding NominatedBank Account details or we require further evidence ofidentity as required by law for your protection. During anypayment delay of up to 30 days, the proceeds will be heldin a Client Money Account and no interest will be paid.If the payment remains outstanding for more than 30 days,we reserve the right to add the money to your IPS CashAccount shortly after this period. In the case of Direct Debitcollections, payment may be deferred in relation to the lastDirect Debit collection until we can be sure that Paymenthas been successfully collected.For your protection payment will be made by BACStransfer. Subject to Clause 15, and the remainder of thisClause 18, payment to your Nominated Bank Accountor another bank or building society account given byyou is good discharge of our duty under these PortfolioInvestments Terms and Conditions.If you instruct us to make a payment to a non‐Sterling bankaccount, payment will be made in Sterling and we willnot pay any costs for currency conversion. Payments toanyone other than you will be made only to a third partywho can hold client money, or on death (see Clause 20) orwhen transferring to another ISA account manager (seeClause 24). No interest will be earned between the dateUnits are sold, or the date of the withdrawal instruction inrelation to the Cash Reserve, and the date any paymentclears into your Nominated Bank Account, except anyperiod that it is held in the IPS Cash Account.For more information on when interest is paid on theIPS Cash Account, see Section A4.4 in the IPS Terms andConditions. We reserve the right to deduct any outstandingfees, charges and expenses due to us from the amount dueto be paid to you. In the case of Direct Debit collections,payment may be deferred in relation to the last Direct Debitcollection until we can be sure that Payment has beensuccessfully cleared.B.19 UNCLEARED PaymENTSIf, for any reason, we cannot pay you, we will hold themoney in your IPS Cash Account or a Client MoneyAccount(s). We will take reasonable steps to contact youand if we do not hear back from you or if you have notprovided us with revised payment details within six years,we may write to you at your last-known address. We willbe informing you that it is our intention to no longer treatthis as client money. You will have 28 days to make a claimfor this money. We will then transfer this amount from theClient Money Account to us. However, we will make goodany valid claims that are subsequently received.B.20 PROCEdurE FOLLOWING DEATHFor Investment Accounts held in more than one name,the Investment Account will continue in the name(s) of thesurviving investor(s). Upon your death an ISA automaticallyterminates in accordance with the Regulations, but willbe converted to an Investment Account and this willremain invested in Units. For Investment Accounts in onlyone name, and for all ISAs, on receipt of proof of deathwithout proof of who is entitled to the benefits, all futuredistributions will be used to buy additional DistributionUnits. Any amount held in the Cash Reserve will betransferred to the IPS Cash Account.For Investment Accounts in only one name, and for all ISAsconverted to Investment Accounts, after we have receivedall the documentation we reasonably need to establishproof of death and proof of entitlement in order to finalisethe arrangements, we require a valid instruction from yourpersonal representatives to sell the Units. On receipt of avalid instruction, we will sell the Units at the next ValuationPoint as long as we receive the instruction by the dailyDealing Deadline.The proceeds together with any amount in your IPS CashAccount will then be sent to your personal representativeswithin five Business Days.Please note that payment may take up to a further fiveBusiness Days to show in your representative’s bankaccount. If a BACS or CHAPS payment is rejected by yourrepresentative’s bank then the payment will be added toyour IPS Cash Account shortly after it is returned to us.
52INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSWe may pay proceeds by cheque in exceptionalcircumstances. If the cheque remains uncashed, shortlybefore six months from issue the cheque will be stoppedand the Monies added to your IPS Cash Account. If anytax credits were added to your Portfolio Account after thedate of your death, a sum equal to these credits will bededucted from the Portfolio Account and paid to HMRCand your personal representatives will receive the cashvalue of the Portfolio Account subject to that deduction. Ifyour personal representatives require a Portfolio Accountto be opened with us in another investor’s name, we mayrequire verification of identity from the new PortfolioAccount holder.The payment of any proceeds or the setting-up of anynew Portfolio Account may also be delayed until after wehave verified the identity of the executor. These PortfolioInvestments Terms and Conditions shall be binding onyour personal representatives.B.21 CHANGING THE PORTFOLIOINVESTMENTS TERMS AND CONdiTIONSOver time, circumstances can change and this may mean(when we have a valid reason) we need to change thesePortfolio Investments Terms and Conditions.For example:(a) Our investment rights and powers are removedor restricted.(b) There are changes to the way we are taxed.(c) There are changes to the way you are taxed.(d) Exceptional circumstances make it impossible for us todo what we say we will.(e) There are changes in laws, regulations, consumerstandards, and so on.(f) We need to respond to changes in tax rates, interestrates or the costs of providing the Portfolio Account.(g) We add, change, or remove features of our PortfolioInvestments offering.Any changes must meet the Regulations (if appropriate)and be permitted under the Financial Services AuthorityHandbook. We will provide at least 30 days’ notice ofany change, if that change is considered to be to yourdisadvantage. If you are unhappy with any such changesyou can transfer an ISA (see Clause 24) or close yourPortfolio Account (see Clause 17). We also reserve theright to remove any Fund from Legal & General’s InvestorPortfolio Service. If a Fund is suspended by the AuthorisedFund Manager, we may hold or reject instructions to dealuntil the suspension is lifted. Should a Fund pay incomeduring a period of suspension and you have instructed usto reinvest, we may not be able to fulfil your request. Inthe event that we are unable to fulfil your request we willcommunicate with you on how income will be treated.B.22 TRANSFErriNG Our duTIESWe may appoint agents to carry out our obligations inmanaging your Portfolio Account as ISA/account manager,as long as this is allowed by the Regulations and theFinancial Services Authority Handbook. However, wewill not do so unless we are satisfied that the agent iscompetent to perform such tasks. We will be liable for theacts of any agents we appoint.You consent and agree that we may assign to anyLegal & General group company all or any of our rightsand obligations under these Portfolio Investments Termsand Conditions. We will notify you of any such assignment.B.23 PROCESSING daTA ANDPROvidiNG INFOrmaTION TO OTHERSWhere you tell us that the Portfolio Account is being usedin connection with a mortgage or mortgages from a namedlender or lenders, then we may inform the lender(s) andany other person you permit in Writing, of any informationabout the Portfolio Account. These requests will beanswered only on an individual basis. The Legal & Generalgroup of companies will hold and process informationobtained about you as a result of your Application whetheror not it proceeds, either by computer or otherwise.B.24 TRANSFErriNG AN ISATO ANOTHER maNAGERYou may, at any time, request that we transfer the wholeor part of your ISA, including any amount in the CashReserve, as permitted in the Regulations, to anotheraccount manager.The transfer will take place within such time as maybe agreed between the parties subject to a reasonablebusiness period (not exceeding 30 days) required by us toimplement any instructions. If you request the transfer tobe as cash, enough Units will be sold from the ISA to meetthe requested Transfer Value.If the transfer means that the remaining value of your ISAwould be less than £20, we would sell all the Units andtransfer the whole ISA. When we have received all theinformation we reasonably require to finalise the transferby a Dealing Deadline, unless we are told otherwise, theUnits will be sold at the next Valuation Point. Alternatively,where instructed, we will transfer the Units to the other
INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONS53account manager provided that the other accountmanager will accept those Units. Where there are notenough Units in the ISA to meet this value, no sale willproceed and the other account or plan manager will beinformed. Alternatively, you can request that we transferthe Units to your new ISA manager without selling theUnits. In this case we will request that the AuthorisedFund Manager transfers the ownership of your Units fromus or the Nominee to your new manager. We will deductany outstanding charges, or any payments that are owedto HMRC in accordance with the Regulations from theTransfer Value.Any distribution and/or reclaimable tax credit that was dueto be paid after the completion of a transfer will be paidinto your IPS Cash Account, and sent to your NominatedBank Account if you have one.B.25 TRANSFErriNG frOM ANOTHERACCOUNT maNAGERWe will, at our discretion and as long as we have receivedall the information we require to complete the transfer,allow an account to be transferred from another accountmanager to us.(a) For an ISA, if the account(s) is to be transferred as cash,then this cash value must not be less than the currentminimum Payment for an ISA as detailed in our currentISA transfer application (which shall be regarded as anApplication for the purpose of this Clause 25).(b) Where you wish to transfer any Fund which is availableon Legal & General’s Investor Portfolio Service, youcan request that we ask the other manager to transferthe ownership of the Fund to us or the Nominee.However, in the event of such a transfer, you do nothave the right to cancel as described in Clause 4.(c) The transfer date will be a date to be agreed betweenthe previous account manager and us and within thetimescales requested.(d) If any Payments are received from your previousmanager after the date of transfer, but before a DealingDeadline it will be invested at the next Valuation Pointin the same Funds and in the same proportions as theoriginal transfer.(e) Any cash transferred, which has been received bythe Dealing Deadline, for the Fund requested, will beinvested at the next Valuation Point provided we havereceived all the information reasonably required.(f) Where the other manager tells us how the TransferValue is split between the current tax year and theprevious tax year, we will hold the current tax yearas a separate ISA. (You should note that the bankingarrangements in Clause 5 continue to apply.)B.26 CONSOLIDATION OF ISAsFor administrative purposes we may merge theinvestments of your previous ISA subscriptions with newISA subscriptions made under these Portfolio InvestmentsTerms and Conditions.B.27 REgulaTORSLegal & General (Portfolio Management Services) Limitedis authorised and regulated by the Financial ServicesAuthority.B.28 VERIFICATION OF idENTITYTo protect you and us from financial crime, we may need toconfirm your identity from time to time. We may do this byusing reference agencies to search sources of informationrelating to you (an identity search). This will not affect yourcredit rating. If this fails, we may ask you for documentsto confirm your identity. In certain circumstances we mayneed to contact you to obtain more information regardingyour investment.B.29 COMPlaiNTS AND POLICIESWe have a procedure for handling any complaints relatingto the operation of your Portfolio Account, a copy ofwhich is available on request at the address in Clause 32.In the event you are not satisfied, you also have a right ofcomplaint direct to the Financial Ombudsman Service. Youcan also request copies of the following policies:(a) Investments held in joint names;(b) Investments from overseas;(c) Best execution;(d) Locating customers without an address;(e) How we use other companies.B.30 COMPENSATIONYou may be entitled to compensation under the FinancialServices Compensation Scheme in the event that wecannot meet our obligations to you or in the event ofinsolvency of a third party. Any compensation availableis dependent on the type of business and an investor’scircumstances. Most types of investment business arecovered for the first £50,000. Further information isavailable from us or from www.fscs.org.uk
54INVESTING WITH IPS – THE INVESTOR PORTFOLIO SERVICE TERMS AND CONDITIONSB.31 INFOrmiNG US OF CHANGESYou agree to inform us, without delay, of any change inyour circumstances or status, including in particular anychange of address, name, bank account or residencystatus. Where we do not have an up-to-date address foryou, we will make enquiries to identify your new address.In order to make these enquiries, we may need to shareyour details with trusted external parties. If you are orbecome a US Person, you agree to notify us immediately.We are entitled to terminate any agreement with you underthese Portfolio Investments Terms and Conditions and anyother Product Terms and Conditions if you notify us thatyou are or have become a US Person, or if we discover thatyou have become a US Person.B.32 GIVING NOTICEWe will carry out instructions only if they are from you oryour authorised representatives. Any instruction givento us must be in writing (or any other method as agreedby us). Written instructions should be sent to and willbecome effective only when received at:For postal instructions:Investor Portfolio ServiceLegal & GeneralPO Box 1112ChelmsfordCM99 2UXOr for couriered instructions:Investor Portfolio ServiceLegal & GeneralAdams House2 Springfield Lyons ApproachChelmsfordCM99 2UXOr such other address that we tell you about afteracceptance. We will carry out, then confirm anyinstructions unless we notify you otherwise.
INVESTING WITH IPS – GLOSSARY 55GLOSSARY.Accumulation unit – Type of unit you will receive if youinvest for growthAnnual management charge (AMC) – Annual chargebased on a percentage of the value of your investment. Itpays for investment management and other fund costsAssets – Underlying investments bought by the Fund.These can include investments such as property, companyshares, bonds and DerivativesAuthorised corporate director (ACD) – The company thatmanages an OEICBenchmark – Certain Funds measure their performanceagainst a benchmark. This could be, for example, similarFunds, a stockmarket index, or a particular interest rateBid price – Price at which you sell units in adual-priced fundCapital gains tax – A tax that may be payable on any profityou make when selling an asset or investmentConfirmation note – Confirms the details of lump suminvestments, withdrawals or switches of an investmentfrom one Fund into anotherConsolidated Confirmation note – Confirms the detailsof transactions in the six months following an annualstatement, mainly for customers making monthlyinvestmentsCorporate bond – Interest-paying loan to a companyCustodian – The custodian holds the assets belonging tothe Fund on behalf of the trusteeDealing Deadline – The time on a business day by whichwe must accept your instruction to buy or sell units orshares, or start the process to change Funds at the nextvaluation point. Unless we tell you otherwise, we needto receive your instruction one hour before the DealingDeadline for telephone instructions, and 15 minutes forinstructions through the websiteDepository – The depository is responsible for lookingafter an OEIC Fund’s assets, and ensuring the Fund ismanaged within the FSA and other regulationsDerivatives – Specialist investments that a Fund can usefor efficient portfolio management and to reduce some ofthe risks of the market. Some Funds also use derivatives toenhance investment performanceDesignation – A personal reference you may add to a unittrust or OEIC holdingDistribution – The payment of income from a Fund. Itwill be reinvested or paid to you, depending on yourinstructionDistribution date – Date on which we receive income fromthe income units in a FundDividend – Income payment from company shares. Alsorefers to income payments from Funds investing mainly incompany shares and/or propertyDual pricing – A method of pricing a Fund that can lead todifferent prices for buying and selling unitsEfficient portfolio management – Efficient day-to-daymanagement of the Fund and reducing some of the risksof the marketEqualisation amount – An amount of income already heldby the Fund that is included in the unit price when youbuy units. No tax is payable on this amount at your firstincome distribution, or if you sell unitsEx-dividend (XD) date – Date on which the Fund Managerbases their calculation of any income payable at asubsequent distribution dateExtra expenses – Variable yearly charge for othermanagement expenses in addition to those covered by theannual management chargeFSA – Financial Services Authority (UK regulator)FSCS – Financial Services Compensation SchemeFund – A unit trust or OEIC investment managed by aFund Manager. Each Fund has a different investment aimand styleFund Manager – Investment specialist(s) managinga FundHMRC – HM Revenue & Customs (UK Tax Authority)
INVESTING WITH IPS – GLOSSARY 56Income unit (also known as ‘Distribution unit) – Type ofunit which normally pays out its income. Sometimes thisincome can be used to buy more unitsInheritance tax – Tax that is payable on your estate whenyou dieInitial charge – The entry charge is a percentage you’ll payeach time you make an investment in certain Funds or unitclassesISA Individual Savings Account – A way of holdingPortfolio Investments that has tax benefitsKey Investor Information Document (KIID) – Gives the keyinformation you need to decide whether a Fund is rightfor you. You must read it before making any investmentdecisionsLevy – Deduction that a Fund Manager may take fromanyone buying or selling units or shares in a single-pricedfund to allow for the costs of buying and selling theFund’s assetsOEIC Open-Ended Investment Company – A type ofcollective investment, when an investor buys shares in aFund or sub-FundOffer price – Price at which you buy units in a dualpricedFundOngoing charges – The charges you will pay over ayear for as long as you hold your Portfolio Investment.These consist of the annual management charge andextra expensesPerformance fee – The performance fee is a payment tothe Fund Manager from some Funds when they performbetter than a benchmarkPortfolio Investment – The products covered in thisbrochure, unit trusts and OEICsProspectus – A document of detailed technical informationabout the Fund produced by the Fund ManagerRisk and reward profile – Section of Key InvestorInformation Document that shows you the Fund’s level ofrisk in relation to the potential reward. It also shows anyspecific risks that applyShare – Each OEIC Fund is divided into individual sharesthat you buy or sell. ‘Share’ also refers to a company share(or ‘Equity’) that is a unit of ownership of a company onthe stockmarketSingle pricing – A method of pricing a Fund where theprice for buying and selling units is always the sameSpread – Difference between the prices at which you buyand sell units in a dual-priced FundStamp Duty Reserve Tax – Monthly tax that unit trustsinvesting in UK company shares have to payTransaction form – A form used to give an instruction toadd money, change a regular monthly payment, changeFunds or change unit type. These are available fromCustomer Services, online if you’re registered for onlineservicing, and from your adviser if you have oneTrustee – The trustee is responsible for looking after a unittrust Fund’s assets, and ensuring the Fund is managedwithin the FSA and other regulationsUnit – Each unit trust Fund is divided into individual unitsthat you buy or sellUnit classes – Different categories of unit for differenttypes of investorUnit trust – A collective investment where an investorinvests by buying units in a FundUnit trust manager – The company that manages aunit trustValuation point – The time each business day when theFund Manager works out the unit price of a Fund based onthe value of all its assets, and processes any transactions.Risk Meter – Shows the relative risks of the Funds we offeron a scale. Compiled by Legal & General, based on ourview of the risk of each Fund, it shows a level of risk fromminimum to high risk, based on how much a Fund valuecan change and how likely that is to happen
NOTES – INVESTING WITH IPS 57
Contact us the way you prefer:Face to face – If you have a financial adviser, you can discussyour investment with themPost – Write to Investor Portfolio Service, PO Box 1112,Chelmsford CM99 2UXPhone – 0845 272 0089*Email – email@example.comOnline – www.onlineips.co.uk*We’re open Monday to Friday, 9.00am to 5.30pm. Calls maybe recorded and monitored. Call charges will vary.Legal & General (Portfolio Management Services) LimitedRegistered in England No. 2457525Registered office: One Coleman Street, London EC2R 5AAWe are authorised and regulated by the Financial Services AuthorityW13623 07/12 H132532