Rules

Rules of the Swan Investment Club

 

1.  THE AFFAIRS OF THE CLUB

The affairs of the club shall be conducted in accordance with the letter and spirit of the Constitution laid down by the members.  The Constitution may only be changed by agreement of not less than 75 % of current members of the club.

 

2.  OFFICERS

The affairs of the club shall be managed by three officers - chairperson, honorary secretary and honorary treasurer - who shall be elected by a simple majority of members attending the annual general meeting of the club.

These officers shall resign at the following annual general meeting but shall be eligible for re-election. If an officer should leave the club, die or otherwise be unable to continue to carry out his/her duties, a replacement may be elected at a subsequent ordinary meeting of members.  Other officers may be elected from time to time to assist the three main officers.

 

3.      MEETINGS

a)      In each year there shall be held 12 monthly meetings and one annual general meeting (as determined by the Constitution), at which all members shall be entitled to be present and to vote on all matters.

b)      Dates and venues of meetings may be varied in accordance with a resolution supported by a simple majority of those attending a properly constituted meeting of the club.  Such resolutions and all others except where the Constitution and Rules specify otherwise must be carried at a meeting where there is a quorum comprising five members, or half of the current membership, whichever is less.

c)      All members shall be given at least 5 days notice of dates and venues of meetings.

d)      A special general meeting may be convened by not less than three members for the purposes of resolving except where the Constitution and Rules specify otherwise special items of club business subject to a request in writing or by email being submitted to the secretary who will without undue delay then give at least 21 days notice to all members.

 

Club membership shall be restricted to the maximum number of people stated by the Constitution.

 

a)      In accordance with the Constitution the election of a new member is conditional upon there being no objection from a member at the meeting at which the application is considered.

b)      A prospective member must apply for membership in writing or by email to the secretary and in accordance with the Constitution be proposed and seconded by two existing members at a monthly meeting of the club.  Subject to acceptance by all members attending that meeting the name and address of the prospective member will be included in the minutes that will be circulated to all members prior to the next monthly meeting.

c)      The club reserves the right to refuse admission to any person without giving a reason.

d)   On admission to the club, a new member will sign an agreement (see ‘New Members Agreement’) accepting all responsibilities associated with membership.  The new member shall pay the initial lump-sum subscription and the first month’s subscription.  These sums will purchase for the new member a number of units calculated according to club rules and the unit value prevailing at the time of joining.

 

6.     WITHDRAWAL OF MEMBERSHIP

a)   A member shall cease to be a member of the club if he/she is in contravention of Clause 15 of the Constitution and in accordance with Clause 16 of the Constitution has been notified in writing, which is defined to include notification by email.

b)   In accordance with the Constitution, if a member should die or cease to be a member for any reason, the club shall pay to the member or to persons entitled by law an amount equal to the former member’s share in the assets of the club as defined in Rule 11.

 

7.      INITIAL LUMP-SUM SUBSCRIPTION

a)      All members will pay a joining fee of £50 to £750 that will rank on par with monthly subscriptions in that it will purchase for that member an appropriate number of units according to the unit value at the time of joining.

b)      This fee may be varied at the club’s annual general meeting or at a special general meeting.

 

a)      A subscription of £25 to £50 per calendar month shall be paid into the club’s bank/building society account by all members to be received at least four days before the 1st day of each month by means of a standing order from a bank, building society or similar source.  Payment may be made by cheque or single online bank transfers on a temporary basis with seven days prior notification in writing or by email to the club treasurer.

b)      Each member’s subscription will purchase for that member an appropriate number of units according to the unit value declared at the monthly meeting preceding the date when the subscription was paid, subject to club brokerage.  Club brokerage applied to subscriptions is currently 0% but may be introduced or varied at the club’s annual general meeting or at a special general meeting.

c)      The treasurer shall notify members at their monthly meeting if any member is in arrears.

d)      A club member may vary his/her monthly subscription within the permitted subscription range (see 8a above) up to twice annually after notifying the treasurer in writing or by email one month in advance.

e)      A club member may suspend the payment of subscriptions for a period of up to one year after notifying the club chairperson and club treasurer in writing or by email one month in advance and provided the member retains a holding of at least 1000 club units.  At the end of the one-year period the member will resume payment of subscriptions for a period of at least one further year.

 

a)       The treasurer shall value the club’s assets monthly and a report shall be presented at the next meeting.  The value of investments shall be based on ‘middle’ closing prices recorded in the Financial Times or other reliable source of share price information.

b)      Accounts will be generated as at midnight at the end of the Friday preceding the first Tuesday of every month.  The treasurer’s monthly report shall include as a minimum: the current value of each of the club’s investments together with a total value of such investments; a statement of unpaid accounts and cash in hand on the aforesaid day; the total value of the club’s assets and the current unit value which shall be determined by dividing the total net asset value by the total number of units issued to members.

 

10.   MEMBERS’ACCOUNTS

An account shall be kept for each member of the club showing: the total investment made by each member by means of subscription, initial lump-sum and/or additional purchases of units; the total of withdrawals made by each member who has sold back units to the club; the total number of units currently held by the member and the current value of his/her holding.

 

11.        MEMBERS LEAVING THE CLUB 

a)       Resignations of membership must be submitted in writing or by email to the chairperson, treasurer or secretary. The resignation becomes effective on the first Tuesday of the month that occurs not less than fourteen days after the date on which the resignation letter or email is received by the club chairperson, treasurer or secretary. 

b)      Members leaving the club, whether by resignation or, as the result of termination of membership under Rule 6, shall sell back to the club their entire holding of units.

c)    The amount to be paid to a member leaving the club shall be calculated by multiplying the total number of units held by the member by the unit value declared according to Rule 9b at the Friday valuation date immediately prior to the effective resignation date, subject to a deduction of club brokerage if such should be in force at that time and any legal fees incurred by the club in connection with the withdrawal of the member.  Any surplus cash held to the member’s credit would be added.

d)      Payment to the member who has left the club shall be made in accordance with the Constitution at the discretion of the treasurer but in any case within 90 days of the resignation under Rule 11a or termination of membership under Rule 6 becoming effective.

 

12.        MEMBERS SELLING PART OF THEIR UNIT HOLDING

a)       A member may sell his/her units back to the club provided the member retains a minimum holding of 1000 units.

b)      A request to sell units back to the club must be submitted in writing or by email to the club chairperson, treasurer or secretary.  The request becomes effective on the first Tuesday of the month that occurs not less than fourteen days after the date on which the request letter or email was received by the club chairperson, treasurer or secretary.

c)       The amount to be paid to a member selling units back to the club shall be calculated by multiplying the number of units being sold by the unit value declared according to Rule 9b at the Friday valuation date immediately prior to the effective resignation date, subject to a deduction of club brokerage if such should be in force at that time.

d)      Payment to the member shall be made in accordance with the Constitution at the discretion of the treasurer but in any case within 90 days of the sale becoming effective.

 

13.        ADDITIONAL UNITS

a)  Members are allowed to buy units, which have been sold back to the club by members leaving the club or by members reducing their unit holdings, at the valuation price less the club brokerage charged when the units were sold.  The unit valuation price is announced according to Rule 9b in the treasurer’s monthly report, which is normally circulated by e-mail before each monthly meeting.  The purchase of these units may only take place at the monthly club meeting that occurs on or after the first Tuesday of the month on which the sale becomes effective (or by default on the first Tuesday of the month on which the sale becomes effective).  Offers can be made known to the club treasurer and/or the club chairperson at or by email before the club meeting (or by default on the first Tuesday of the month) at which the sale becomes effective.  In the event that units are oversubscribed the units will be distributed in proportion to offers received.  

 

b)      With the exception of 13a above additional units may NOT be purchased.

 

14.      RUNNING COSTS

No member of the club shall be compensated for providing services to the club.  Expenses incurred in managing the club shall be recorded in the club’s cash account, which shall be funded from the club’s subscription and other income.  The treasurer shall maintain a full and accurate record of all expenditure to submit to the auditors annually.

 

15.       BANKING

a)      The club’s bank/building society shall be determined annually at the annual general meeting but may be changed by agreement of a majority of members at a special general meeting called in accordance with Rule 3.

b)     All cheques drawn on the club’s account(s) shall require any two of several authorised signatures.  Where possible one of the signatories of cheques should be the chairperson.  In the event of one authorised signatory being unavailable for an extended period, the officers of the club may authorise a further signatory for the period involved.  All income shall be paid direct into the club’s bank/building society account(s) except where members have approved an arrangement whereby their stockbroker retains funds deposited from the club’s bank account or from the sale of one or more investments pending the purchase of other investments.

c)      The club’s bank/building society shall be instructed not to grant any overdraft facilities to the club.

 

16.     BROKERS

The club’s brokers shall be instructed that

a) Only one or two named officers are authorised to buy or sell investments on behalf of the club.

b) No member is authorised to commit the club beyond the cash held by the club.

c) All cheques due to the club’s account are to be made out to the club’s name on non-transferable cheques.

 

17.     COMMITMENTS

No club member shall make any commitment on behalf of the club or commit club funds without written authorisation to do so.

 

18      AMENDMENTS OF RULES

The rules of the club may be amended or rescinded at an annual or special general meeting of the club subject to agreement by a majority of members present (as determined by the Constitution).

 

19       MINUTES

Minutes of the club meetings shall be kept and shall be available for inspection by any member of the club at any reasonable time.

 

20.       DISPUTES

a)       The chairperson shall decide any disputes as to the interpretation of these rules unless notice is properly served requesting that the matter should be resolved by a special general meeting of club members.

b)      Any disputes relating to the valuation of a member’s share in the assets of the club or his/her entitlement to that share shall be decided by a chartered accountant (to be appointed by the chairperson of the club) of at least seven years’ standing whose certificate of decision shall be final.  The party to the dispute against whom the decision is made shall pay fees incurred in obtaining this decision or, in the case of this not being clear, the fees shall be shared between the club and the member or ex-member concerned.

 

21.       WINDING UP

The club shall be wound up and all assets divided among members (after payment of club expenses) in accordance with the number of units held by each member if a resolution to that is passed by at least 75% of the club membership at a special general meeting of the club.

 

22.      TAX LIABILITY

Membership of the club implies acceptance of proportional tax liability on trading profits made by the club in any tax year.

 

23.      INTERNAL BROKERAGE

Most quoted shares have a bid price and an offer price (the difference between buying and selling prices) and usually the figure used to establish the unit valuation is the mid-price – i.e. midway between the bid and the offer.  For this reason the unit price, which measures the value of a member’s holding, is not completely accurate.  This matters when it comes to paying out a member who wishes to cash in some or all of his/her units, resign, or when a member dies.  It may be that the club will have to sell shares to make the payout and there will also be brokers’ fees to pay. For this reason a 2.5% brokerage charge will be levied.  This amount is charged whether or not shares have to be sold because it more accurately reflects the true value of the holding.  A resolution to change the club brokerage may be made and voted on at an annual general meeting or at a special general meeting of the club.

 

24.      JOINT MEMBERSHIP

Members are not allowed to hold joint membership with a friend, relative, partner or any other person.  A member cannot represent another member at a meeting.

 

 

 

 

Amended and approved at a Special General Meeting held in conjunction with the 264th Swan Investment Club meeting on 3rd December 2024