SELF-DIRECTED
Explicit Pricing Model
The Sale for Regular Payment Service
How Cofunds helps you make regular payments
by selling from your investments
Before setting up a Sale for Regular Payment you must talk to your intermediary and ensure you understand the
processes set out in Section 1. A Sale for Regular Payment will have consequences on your investment.
SECTION 1 explains what a ‘Sale for Regular Payment’ is, how it works and answers some of the most commonly
asked questions.
SECTION 2 is your application form to your intermediary to set up a Sale for Regular Payment. You should complete and
sign Section 2 to provide your confirmation, while your intermediary should keep Section 2 as a record of your instruction.
You should keep Section 1 for your reference.
Throughout this document, unless otherwise stated, where you see a reference to ‘’we’’ or ‘’us’’ or ‘’our’’ this refers to
‘’Cofunds Limited ‘’ (Cofunds).
Issued and approved by Cofunds Limited, One Coleman Street, London, EC2R 5AA.
Registered in England and Wales No.3965289. Authorised and regulated by the Financial Conduct Authority (FCA). FCA Registration No. 194734.
Section 1: Your questions answered on the Sale for Regular
Payment service
Q1. What is a Sale for Regular Payment?
A. A
service to help manage payments you have arranged to go out
of your Cofunds Cash Account for ISAs and investment funds.
Where you have instructed us to make payments from your Cash
Account but don’t have enough money in that account to meet
the payments due to be paid that month, you can set up a Sale
for Regular Payment to instruct Cofunds to sell a portion of your
ISA or investment funds to raise the required amounts.
Q2. What is the main benefit and consideration?
A. B
enefit – setting up a Sale for Regular Payment removes the
worry of checking every month that your Cash Account has
enough money in it to supply your regular withdrawal or pay
your fees and charges.
Consideration – in a situation where your funds are regularly
sold to meet payments, your investment capital could be
reduced or entirely depleted and you may lose tax benefits or
incur tax liabilities. We provide more details about tax later on.
Talk to your intermediary about whether this service is
appropriate for you.
Q3. What payments can I make using a Sale for
Regular Payment?
A. • Platform Charge
• Regular withdrawals
• Intermediary Fees & Charges
Q4. How does a Sale for Regular Payment work?
A.
Cofunds will calculate whether you have enough money in
your Cash Account to cover any related payments due to go
out that month. This calculation takes place on the 5th
working day of the month.
If the calculation shows that you will not have enough money
in your Cash Account to meet the required payments, on the
9th working day of the month we’ll sell enough units or shares
from your investments to raise the required amount.
We’ll write to notify you of any changes that are made to
your account.
Please note that our calculation only includes funds that are
priced daily – any funds you hold that are priced weekly will not
be considered, even if they are large enough to raise the
required amount.
We’ll sell 10% over the required amount to cover any further
shortfall that may result from market movements between
the date of the calculation and the date of the sale. Any
amount left over following the sale will remain in the Cash
Account to be included in the next calculation.
2 The Sale for Regular Payment Service
There are two ways in which we sell units or shares from
your investment:
Option (a) from your largest value fund holding;
or Option (b)
from a fund nominated by you.
You can at any stage switch between the options (a) and (b)
above – please talk to your intermediary. If you would like to
terminate the Sale for Regular Payment you will need to talk to
your intermediary.
Q5. How do I know which of the two methods will
apply to my investments?
A.
Together with your intermediary, you decide whether you
would prefer us toInvestments
sell from eitherHeld
option
(a) or option (b) in
Within
question 4.Your ISA & Investment Fund Holdings
•You decide whether you want your Sale for Regular Payment
to apply to your ISA or your investment funds, or both.
•You confirm your choices to your intermediary by ticking
the relevant boxes in Section 2.
Sale of Funds
Your Cofunds Cash Account
Q6.What happens if I have more than one
investment product?
A. I f you choose to sell from your largest fund – option (a) – we’ll
sell unitsPayment
or shares
held across
your
to from
you: the largest fund Payment
to your
withdrawal
adviser or
selectedregular
products.
from your Cash
intermediary: fees
The largest
fundtoisyour
the one which has theyou’ve
highest
accumulated
Account
agreed
bank account
(e.g. products – wewith
adviser
value across
your selected
addyour
together
or products,
intermediary
holdingsfor
inincome)
the same fund across different
so a fund
that is held repeatedly in a number of products can be the
largest even if it is not the largest within any single individual
product. If your largest fund is held in more than one of your
selected products, we’ll sell the fund proportionately between
them – see Figure 1 below for an illustration.
Figure 1: Example of how a largest fund is sold between
two products.
Investment Funds
ISA
50% of total investment
on Cofunds
50% of total investment
on Cofunds
Blue
Fund
30%
Red
Fund
30%
Green
Fund
40%
Yellow
Fund
25%
Blue
Fund
25%
Purple
Fund
50%
Blue Fund = (30% of 50%) + (25% of 50%) = largest fund.
The whole of the required amount is raised from the Blue fund,
but split across the two products – so half from Blue Fund in
Investment Funds and half from Blue Fund within the ISA.
If you choose option (b) and your nominated fund is held in
more than one of your selected products, then we’ll sell from it
proportionately across the selected products.
We’ll sell proportionately between your ISA and investment
funds products – for example if 50% of your investment is in
investment funds and 50% is in an ISA, if your largest or
nominated fund is held in both products we’ll raise 50% of the
required amount by selling from the investment funds and
50% by selling from the ISA - see Figure 1.
The minimum we’ll sell from a single fund is £1 of units.
This means that if, for example, a proportionate sale between
your funds would need to deduct less than £1 from each fund to
meet your required payment, we’ll nonetheless sell £1 from each
fund and thus sell more than is necessary to meet your required
payment. The extra proceeds from the sale will be credited to
your Cash Account.
Q7.What if Sale for Regular Payment can’t raise
enough to meet the payments I’ve arranged to
go out of my account?
We’ll attempt to sell funds to raise the amount required to meet all
A.
the scheduled payments, but if enough money can’t be raised
then some or all of your payments may not be met. The priorities
of payments are as follows:
1. Platform Charge (payments to Cofunds)
2. Regular withdrawals (payments to you)
3. Intermediary Fees & Charges (payments you agreed with your
intermediary)
If you have chosen option (b) from a fund nominated by you and
we can’t raise enough from your nominated fund (or the fund is
not available for trading at that time) we’ll therefore go to the
largest fund owned by you.
If it is possible, we’ll revert you to option (a), so that the Sale for
Regular Payment instruction will sell from your largest fund from now
on. We’ll write to tell you if we do this, and notify your intermediary.
If, at the time of the calculation, enough money can’t be raised to
meet any of the payments you’ve arranged to go out of your Cash
Account we’ll stop your Sale for Regular Payment instruction for
the current month, and will permanently end any regular
withdrawal and drawdown mandates you have in place. Any
product charges or intermediary charges will accrue - we’ll
attempt to sell assets to pay for these the following month.
We’ll write to notify you of any changes that are made to
your account.
lease note that our calculation only includes funds that are priced
P
daily – any funds you hold that are priced weekly will not be considered,
even if they are large enough to raise the required amount.
Q8. What if market movements mean that my Sale for
Regular Payment can’t raise enough to meet the
payments I’ve arranged to go out of my account?
A.
At the time of calculation, if it shows we can raise enough to
meet your scheduled payments, we’ll carry out the sale on the
9th working day of the month.
However, as the sale is four working days after the calculation,
market movements may mean that the sale doesn’t raise the
predicted amount. If this means that there’s insufficient money
within your Cash Account when the payments are due, we’ll use
the money that has been raised to pay the scheduled payments
in the priority order set out in question 7.
Should there not be enough to pay all the payments in full, we’ll
pay as much of the lower priority payments as possible (although
we’ll always leave the intermediary fees and charges to accrue).
We’ll not be responsible for any shortfall, and it will be your
responsibility to arrange to make up any difference.
We’ll write to notify you of any changes that are made to
your account.
Q9. What if I trade between the calculation and
sale dates?
A.
In a situation where you choose to place a sale or switch
transaction between the calculation date on the 5th working day
of the month and the sale date on the 9th working day of the
month, this can result in the units needed for the Sale for Regular
Payment becoming unavailable. In these instances we’ll not be
able to carry out the Sale for Regular Payment using the usual
automatic process, which may mean that the sale is delayed to
the 10th business day of the month.
Q10. Are there any tax implications arising out of a
Sale for Regular Payment?
A.
Within a Cofunds ISA there’s no capital gains tax for the sale
of units.
However, once you’ve withdrawn money from your ISA you’ll
lose the future tax benefits on the amount withdrawn.
For investment funds, you may incur a capital gains tax
liability on the gain made through the sale of units. See the
Investment Funds Key Features
(www.cofunds.co.uk/docs/sdub/platformkidfund/)
and speak to your intermediary for more information.
The Sale for Regular Payment Service 3
Glossary
Capital Gains Tax – if you sell your investment any growth may be
subject to capital gains tax, if you exceed your annual capital gains tax
allowance. Please speak to your intermediary for more information.
Product – This means an investment product on Cofunds. We treat
investment funds held outside a ‘wrapper’ as a product, along with
ISAs, pensions and investment bonds.
Cofunds Cash Account for ISA and investment funds – an
account that allows you to hold your money that is destined for
investment funds and ISAs on Cofunds.
Sell – is when you cash in your investment.
Date of calculation – on the 5th business day of the month we
review your Cash Account to ensure that you have enough funds in
your Cash Account to pay any withdrawals, charges etc that are due
to go out that month.
Date of Sale – occurs on the 9th business day of the month – if after
the ‘’Date of Calculation‘’ we see that you do not have sufficient
funds in your account, we start the Sale for Regular Payment.
Fund(s) – general term for a form of investment. It works by
gathering money from investors and invests it according to a clear
set of investment objectives.
Holdings – the contents of an investment portfolio. A range of
investment products, from stocks, bonds and mutual funds to
options, futures and exchange-traded funds.
Intermediary Fees & Charges – these are the fees and charges you
have agreed to pay your intermediary in return for the services they
provide you. Different types that could apply to you include:
•
•
•
•
Subscription Charges
Service Charges
One-off fees
Ongoing fees.
What you’ll actually pay depends on what you’ve agreed with your
intermediary.
4 The Sale for Regular Payment Service
Shortfall – the amount by which a financial obligation or liability
exceeds the amount of cash that is available.
Switch – is to take your investment out of one fund and re-invest
into another.
Unit(s) – a fund is made up of units, so the person(s) that are
invested into a fund(s) all own units of that fund(s).
We/us/our – Where you see a reference to ‘’we’’ or ‘’us’’ or ‘’our’’
throughout this document, unless otherwise stated, this refers to
‘’Cofunds Limited‘’ (Cofunds).
Section 2: Instruction to your intermediary to set up a Sale for Regular
Payment mandate
This form is intended to help you to give your intermediary the authority to set up a Sale for Regular Payment for you. You do not need
to send a copy of this form to Cofunds, but your intermediary should keep a copy as a record of your instruction.
Please tick the boxes as appropriate.
1 Client Declaration
I confirm that my intermediary has explained the Sale for Regular Payment processes detailed in Section 1 and the possible
consequences of these processes on my investment.
I confirm that my intermediary has explained that the Sale for Regular Payment process may result in the reduction of my capital,
and/or in capital gains tax liabilities.
I agree for my intermediary to set up a standing instruction for a Sale for Regular Payment in accordance with my instructions below.
2 Client Instruction to Intermediary
ACCOUNT LEVEL INSTRUCTION: I choose for the Sale for Regular Payment to be made from my
(a) Largest fund
OR
(b) Nominated fund My nominated fund is:
I choose for the Sale for Regular Payment mandate to apply to:
My ISA
AND/OR
Name
Please include the names of all joint holders:
My Investment Funds SIGNED
Please include the signatures of all joint holders:
Date
INTERMEDIARY CONFIRMATION
Full name of Regulated Firm
FCA Ref No.
Name
Position
Date
SIGNED
One Coleman Street, London, EC2R 5AA. Registered in England and Wales No. 3965289.
Authorised and regulated by the Financial Conduct Authority (FCA). FCA Registration No. 194734
CF20SDE 02/14
The Sale for Regular Payment Service 5
6 The Sale for Regular Payment Service
The Sale for Regular Payment Service 7
One Coleman Street, London, EC2R 5AA. Registered in England and Wales No. 3965289.
Authorised and regulated by the Financial Conduct Authority (FCA). FCA Registration No. 194734
CF20SDE 02/14