| (a) | A fund must not borrow. |
| (b) | Notwithstanding paragraph (a):— |
Words preceding regulation 28(5)(b) substituted by section 5 of Notice No. 2230, GG46649, dated 1 July 2022: Effective 3 January 2023]
| (i) | a fund may only borrow money for bridging purposes to maintain sufficient liquidity to meet its operational requirements; |
| (ii) | the aggregate of any loans for bridging purposes must not, throughout the financial year as determined in the rules of a fund, exceed 50 percent of the gross income of the fund (income of the fund before payment of management fees and administration fees) during the preceding financial year; |
| (iii) | any loan for bridging purposes must be repaid within 12 months of entering into the loan; and |
| (iv) | any loan for bridging purposes must not be subject to an early settlement penalty. |
| (c) | A fund may as collateral for default on a loan referred to in paragraph (b) cede a proportionate share of its assets to the lender. |
