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Changes to the Short Term Investment Service terms and conditions


Key proposed T&C updates

The proposed updated terms and conditions can be downloaded here. The key proposed updates to the existing T&Cs include (but are not limited to):

Change of name:

The STIS will be renamed the “Charity Deposit Account”, to more accurately reflect the deposit account structure being provided to local Scout Groups and Councils;

Investment approach and objectives:

The updated T&Cs expressly set out the general investment objectives of the Charity Deposit Account, which are “capital preservation whilst earning a market return commensurate with the risk being assumed”. In light of this, we have updated the T&Cs to reflect the fact that, as consistent with our current practice, we presently invest an amount equal to all Charity Deposit Account deposits with the Royal London Cash Fund, as managed by Royal London Asset Management (the “RLAM Fund”).

The targeted performance objective of the RLAM Fund is to seek to achieve an estimated total return between 0.50% to 0.75% p.a. (gross of management fees and taxes) above 7-day the London Inter-Bank Bid Rate (LIBID) over rolling 12 month periods. This is a targeted rate of return, but there is no guarantee that this will be achievable in practice. The updated T&Cs expressly state that, once the updated T&Cs come into effect, there will be no guaranteed rate of return, and that the risk of the investments made using monies deposited with the Charity Deposit Account will be passed on to depositors. As such, if the investments made do not generate income as expected or if the capital value of the investments decreases, you may not receive any interest or may receive a reduced level of interest on your Charity Deposit Account deposit and/or the value of your deposit may decrease. We do not expect this to happen because we will only invest with a reputable investment manager and in investments which are considered to be relatively secure but it is important that you are aware of this possibility.

Please also note that, as per the existing T&Cs, we will continue to reserve the right to withdraw all or part of these amounts from the RLAM Fund and to invest them in any other asset(s) which we (in our sole discretion) are of the view are aligned with the investment objectives.
Authorisations for withdrawal requests:

As part of the process for implementing Charity Deposit Account withdrawal requests, these will require two authorisations in order to be processed: (1) from your Group’s or Council’s treasurer (as applicable), and (2) from one other trustee of your Group or Council (as applicable), being either the company secretary or your Group Scout leader.

Costs and expenses:

As consistent with our current practice, we have clarified that we may deduct amounts from your deposit on a twice-yearly basis to cover our reasonable running and administration costs for operating the Charity Deposit Account, in amounts that represent our direct reasonable costs rather than being subject to fixed amounts. We have expressly set out that such deductions do not enable us to generate any profits.
We would encourage you to read the updated T&Cs, as set out in Appendix 1 to this letter, in full.

Next steps

The updated T&Cs will come into effect on 1st November 2017 (the “Implementation Date”). If you continue to hold a deposit with the Charity Deposit Account after the Implementation Date, you agree to be bound by these new T&Cs. If you do not agree, you can withdraw your deposit and close your deposit account at any time before the Implementation Date by providing 7 days’ prior written notice, and indicating in your notice the sort code, account number and IBAN of the relevant account to which the withdrawn deposit should be paid as a bank transfer. Upon receipt of your deposit withdrawal and account closure request, this will be processed after receiving authorisation from your Group’s or Council’s treasurer (as applicable).

If you have any questions or would like to discuss further, please contact us at charity.deposit@scouts.org.uk.

 

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