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COLL 9.5 OFR recognised schemes

Information and documents to be provided in relation to an application for recognition under section 271A

COLL 9.5.1G
  1. (1)

    1Under the Act, the FCA has the power to direct how an application for recognition of a scheme under section 271A of the Act must be made. The FCA also has the power to specify that the application contains, or is accompanied by, such information as the FCA may reasonably require for the purpose of determining it.

  2. (2)

    The application form for recognition of a scheme under section 271A of the Act, and guidance regarding documents and information which must be contained in (or provided together with) the application form, are available on the FCA website.

    https://www.fca.org.uk/firms/overseas-funds-regime-update-firms

  3. (3)

    The application form requires the operator that is applying for recognition of the scheme to provide documents and information falling within the following categories:

    1. (a)

      the identity of the scheme;

    2. (b)

      the scheme’s profile;

    3. (c)

      the scheme’s fees and charges;

    4. (d)

      characteristics of the scheme’s units;

    5. (e)

      parties connected to the scheme; and

    6. (f)

      the proposed marketing and distribution arrangements for the scheme.

COLL 9.5.2G

1The FCA considers that the documents and information falling within the categories set out in COLL 9.5.1G(3) are reasonably required for the purposes of:

  1. (1)

    determining whether the conditions for recognition under section 271G(2) (Determination of applications) of the Act are met;

  2. (2)

    complying with its duty under section 271G(4) (Determination of applications) of the Act to refuse an application for recognition if the FCA considers it desirable to do so, in order to protect the interests of participants or potential participants in the scheme in the United Kingdom; and

  3. (3)

    complying with its duty to maintain a record of all recognised schemes under section 347 (The record of authorised persons etc.) of the Act, which is made public in the Financial Services Register.

COLL 9.5.3D

1Any documents accompanying an application for recognition of a scheme under section 271A must be:

  1. (1)

    in English or be accompanied by a translation in English; and

  2. (2)

    certified by the operator to be true copies of the originals.

Recognition of parts of a scheme

COLL 9.5.4G
  1. (1)

    1Section 271S of the Act (Recognition of parts of schemes under section 271A) sets out that section 271A of the Act applies in relation to part of a collective investment scheme as it applies in relation to such a scheme. In our view, this means that the FCA is able to recognise one or more sub-funds in an umbrella, without necessarily recognising all of them.

  2. (2)

    As a result, references to a scheme in COLL 9.5.9G to COLL 9.5.10G and to an OFR recognised scheme in Part 17 of the Act include references to a sub-fund in an umbrella.

Preparation and maintenance of a prospectus relating to an OFR recognised scheme

COLL 9.5.5R
  1. (1)

    1The operator of an OFR recognised scheme must comply with the following requirements in COLL 4.2 (Pre-sale notifications):

    1. (a)

      COLL 4.2.2R(1);

    2. (b)

      COLL 4.2.2R(2)(b) to (d);

    3. (c)

      COLL 4.2.3R;

    4. (d)

      COLL 4.2.3AR; and

    5. (e)

      COLL 4.2.4R.

  2. (2)

    The operator of an OFR recognised scheme must ensure that the prospectus of the scheme contains the information required by COLL 4.2.5R (Table: contents of the prospectus) to the extent that this information would be compatible with the basis upon which the prospectus is approved in the scheme’s Home State.

  3. (3)

    In relation to (2), information is to be treated as incompatible with the basis upon which the prospectus is approved in the scheme’s Home State if adding it to the prospectus conflicts with an existing statement that has already been approved by the regulatory body of the scheme’s Home State.

  4. (4)

    For the purposes of (1) and (2), as appropriate, a reference in COLL 4.2 to:

    1. (a)

      an authorised fund manager is to be read as a reference to an operator of an OFR recognised scheme; and

    2. (b)

      an authorised fund, AUT, ACS, ICVC and UCITS scheme is to be read as a reference to an OFR recognised scheme.

COLL 9.5.6R

1The operator of an OFR recognised scheme must ensure that the prospectus of the scheme:

  1. (1)

    explains how investors in the United Kingdom can make a complaint about the scheme, its operator or its depositary;

  2. (2)
    1. (a)

      explains whether the activities of the operator and depositary of the scheme are covered by the Financial Ombudsman Service and the compensation scheme; and

    2. (b)

      where they are not covered, contains a clear warning explaining that a UK investor may not be able to seek redress under the UK regulatory system for a complaint, or compensation for a financial loss suffered as a result of the operator or depositary being unable to meet their liabilities to unitholders;

  3. (3)

    explains whether or not an investor in the United Kingdom has the right to access:

    1. (a)

      an alternative dispute resolution mechanism in the Home State(s) of the scheme, its operator or its depositary in order to resolve a complaint; or

    2. (b)

      a compensation scheme in the Home State(s) of the operator or the depositary that can pay compensation to unitholders for losses incurred where those persons are unable to meet their liabilities to unitholders; and

  4. (4)

    explains, if the investor has the rights described in (3), how they may be exercised, including how further information may be obtained.

COLL 9.5.7G
  1. (1)

    1If the investor has any rights described in COLL 9.5.6R(3), operators of OFR recognised schemes should consider including further information likely to be useful to investors.

  2. (2)

    Further information likely to be useful to investors would at least include details as to:

    1. (a)

      whether investors are able to make a complaint or request for compensation in English to the respective bodies referred to in COLL 9.5.6R(3);

    2. (b)

      whether there is a cost to make a complaint or request for compensation to the respective bodies referred to in COLL 9.5.6R(3);

    3. (c)

      whether investors would be exposed to any requirement to pay costs by either of the respective bodies referred to in COLL 9.5.6R(3) – for example, if their complaint or request for compensation should be unsuccessful;

    4. (d)

      what the maximum financial limits are for awards of redress or compensation by the respective bodies referred to in COLL 9.5.6R(3); and

    5. (e)

      whether the decision by the body referred to in COLL 9.5.6R(3)(a), such as the amount of redress that should be paid in relation to the complaint, is binding on the operator or depositary (as applicable) if accepted by the investor.

  3. (3)

    Where the prospectus of the scheme is provided electronically, such further information could be provided via a hyperlink to a website or another document.

Guidance on the UK retail disclosure regime

COLL 9.5.8G

1[to follow]

Obligations on an operator of an OFR recognised scheme to notify the FCA

COLL 9.5.9G
  1. (1)

    1Section 271I(1) of the Act (Obligations of an operator of a section 271A scheme) requires an operator of an OFR recognised scheme to notify the FCA if it has contravened, or expects to contravene, a requirement imposed on it by or under the Act.

  2. (2)

    Section 271I(2) of the Act requires an operator of an OFR recognised scheme to notify the FCA of certain changes relating to the scheme, such as changes to the operator or depositary. This should be kept in mind when considering any proposed change.

  3. (3)

    Section 271I(3) of the Act requires a notification under (1) or (2) to be made in writing as soon as reasonably practicable.

COLL 9.5.10G
  1. (1)

    1Section 271J of the Act provides that the operator of an OFR recognised scheme must provide to the FCA such information as the FCA may direct, and in such form and at such times as it may direct. The FCA will publish such directions on the FCA website.

  2. (2)

    The information must be provided as soon as reasonably practicable, in the manner directed on the website. In a few cases, listed on the website, the FCA’s direction requires the operator to notify the FCA by email at the address specified for that purpose. In all other cases, the information should be provided by submitting a standard form.

COLL 9.5.11D

1The operator of an OFR recognised scheme must notify the FCA as soon as reasonably practicable when the operator of an OFR recognised scheme:

  1. (1)

    decides to terminate or wind up the scheme, or becomes aware that the scheme is or will be terminated or wound up; or

  2. (2)

    decides to cease marketing the scheme in the United Kingdom.

COLL 9.5.12G

1Where COLL 9.5.11D(2) applies, the operator should request the FCA to withdraw recognition as an OFR recognised scheme. The operator should ensure that UK investors are given adequate written notice of the decision before the date on which the request takes effect.

Facilities for investors in the United Kingdom for OFR recognised schemes

COLL 9.5.13R
  1. (1)

    1The operator of an OFR recognised scheme must maintain facilities for any person in the United Kingdom to:

    1. (a)

      inspect (free of charge) up-to-date copies in English of:

      1. (i)

        the instrument constituting the fund, as amended from time to time;

      2. (ii)

        the prospectus;

      3. (iii)

        the latest annual report and (if more recent) the half-yearly report; and

      4. (iv)

        the key investor information document or equivalent disclosure document;

    2. (b)

      obtain paper copies of any of the documents in (a), at no more than a reasonable charge in the case of (i), and free of charge in the other cases; and

    3. (c)

      obtain the latest prices of units in the scheme, or information about where they can be obtained free of charge.

  2. (2)

    The operator of an OFR recognised scheme must maintain facilities for any unitholder of the scheme in the United Kingdom to:

    1. (a)

      submit orders to subscribe for and redeem units in the scheme in accordance with the terms of its prospectus;

    2. (b)

      obtain information about how any payment due to the unitholder will be made;

    3. (c)

      provide information to enable the operator to maintain a record of each unitholder’s full name and address and any other required details; and

    4. (d)

      submit a complaint about the operation of the scheme to the operator and obtain information about arrangements for the resolution of the complaint.

COLL 9.5.14R
  1. (1)

    1The operator may provide the facilities in COLL 9.5.13R through an electronic medium where:

    1. (a)

      the prospectus states that the operator will normally communicate with all unitholders and their representatives through such a medium;

    2. (b)

      unitholders have consented to the operator communicating with them in this way; and

    3. (c)

      all services to unitholders are provided in English, free of charge.

  2. (2)

    If the conditions in (1)(a) and (b) are not fulfilled, the operator may provide the facilities in COLL 9.5.13R through an electronic medium at the unitholder’s choice but must additionally provide those facilities at a place in the United Kingdom which is open to members of the public during business hours.

  3. (3)

    The operator may use its own place of business in the United Kingdom if it has one, or else it must appoint a person with a place of business in the United Kingdom to provide the facilities on its behalf.

  4. (4)

    The prospectus of the scheme must state the address of the place at which facilities are provided or explain how they can be accessed through an electronic medium.

  5. (5)

    In relation to notices and documents sent by operators and depositaries to and from the United Kingdom, COLL 4.4.12R (Notice to unitholders) and COLL 4.4.13R (Other notices) apply.

COLL 9.5.15G
  1. (1)

    1Under section 271F(1)(b) of the Act, the operator of an OFR recognised scheme must notify the FCA of an address in the United Kingdom at which notices and other documents may be served on the operator. This may be the same address specified for the purpose of COLL 9.5.14R(2), or another address.

  2. (2)

    Where the operator of an OFR recognised scheme intends to communicate a financial promotion relating to the scheme, the financial promotion will need to be approved unless the financial promotion benefits from an exemption in the Financial Promotion Order.

  3. (3)

    If the financial promotion does not benefit from an exemption in the Financial Promotion Order, an authorised person will only be able to approve a financial promotion relating to an OFR recognised scheme if:

    1. (a)

      that person is a permitted approver in relation to the financial promotion; or

    2. (b)

      an approver permission exemption applies.

  4. (4)

    Where a financial promotion relating to an OFR recognised scheme needs to be approved by an authorised person, that authorised person does not need to be the person who provides unitholder facilities, or whose address is notified for the service of notices.