1. (1)

   This chapter applies in relation to 2 types of recognised scheme:1

   1. (a)

      a scheme which is individually recognised under section 272 of the Act; and1

   2. (b)

      an OFR recognised scheme, which is a scheme recognised under section 271A of the Act.1

2. (2)

   If a scheme is eligible to apply for recognition as an OFR recognised scheme, it may not apply for recognition under section 272 of the Act, within (1)(a).1

3. (3)

   This chapter enables current and potential operators of recognised schemes to know what information and documents the FCA requires to enable it to determine whether to recognise the scheme under the Act for marketing in the United Kingdom.1

4. (4)

   This chapter also sets out requirements relating to:1

   1. (a)

      the preparation and maintenance of a prospectus for a recognised scheme; and1

   2. (b)

      the facilities that an operator of a recognised scheme must provide to enable current and potential participants in the scheme who are present in the United Kingdom to obtain information and exercise their rights without undue difficulty or expense.1

1The effect of GEN 2.2.32R to GEN 2.2.36G and COLL TP 1.1R(65) is that the rules in COLL 9.4 on facilities continue to apply to a TP UCITS qualifier in relation to a scheme that is a recognised scheme under Part 6 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019, until such time as that scheme ceases to be a recognised scheme under those Regulations.

The FCA website sets out further information about which categories of overseas collective investment scheme are eligible to apply to the FCA to be recognised schemes under sections 271A and 272 of the Act, how to apply for recognition, and how to give notifications concerning recognised schemes.1

https://www.fca.org.uk/firms/authorised-recognised-funds/apply-fund-recognition 1

1. (1)

   2The PRIIPs Regulation requires the manufacturer of a PRIIP to draw up a key information document in accordance with the PRIIPs Regulation before that PRIIP is made available to retail investors (as defined in the PRIIPs Regulation).

2. (2)

   The requirements of the PRIIPs Regulation are directly applicable.

3. (3)

   As a result, when a 3scheme recognised under section 272 of the Act6 is made available to retail clients in the United Kingdom the operator must draw up a key information document in accordance with the PRIIPs Regulation, unless the operator of such a scheme is otherwise exempt from such a requirement under the PRIIPs Regulation for the time being3.

4An operator of a scheme recognised under section 272 of the Act need not provide a certificate under COLL 9.3.5D if it has already sent the required information to the FCA within the last 12 months as the result of:

1. (1)

   a requirement relating to an application for recognition of the scheme under section 274(2)(c) of the Act;

2. (2)

   a direction relating to a proposed alteration of the scheme or to a change to the operator, trustee or depositary under section 277(5)(b) of the Act; or

3. (3)

   a previous certificate being provided under section 277A of the Act.

4The operator of a scheme recognised under section 272 of the Act should seek advice from professionals with appropriate qualifications or professional knowledge, such as a qualified solicitor, chartered accountant or compliance consultant, before submitting the certificate to the FCA under COLL 9.3.5D.

5Section 277(1) of the Act (Alteration of schemes and changes of operator, trustee or depositary) requires notification by the operator to the FCA of certain proposed alterations to a scheme recognised under section 272 of the Act which, if made, would be a material alteration. The types of alterations that constitute, or are likely to constitute, a material alteration are set out at COLL 9.3.10R and COLL 9.3.11G.

5In accordance with section 277(2) of the Act, effect is not to be given to any such proposed material alteration to the scheme unless:

1. (1)

   the FCA, by written notice, has given its approval to the proposal; or

2. (2)

   one month, beginning with the date the notice was given under section 277(1) of the Act, has expired without the FCA having given written notice to the operator that it has decided to refuse approval.

1. (1)

   5For the purpose of COLL 9.3.10R, a material alteration is likely to include:

   1. (a)

      any material changes to the investment objective or policy;

   2. (b)

      any change to the investment strategy that involves taking exposure to a new class of assets with a different risk profile;

   3. (c)

      any change affecting arrangements for the redemption of units on behalf of participants, including any arrangements to sell units on an investment exchange;

   4. (d)

      any change to the facilities maintained in the United Kingdom, including marketing arrangements, in accordance with COLL 9.4; and

   5. (e)

      any expansion or limitation of the powers and duties of the operator or, if the scheme has a depositary, of the depositary.

2. (2)

   In addition to the particular matters specified in COLL 9.3.10R(1) to (11), COLL 9.3.10R(12) requires the operator of a scheme recognised under section 272 to notify the FCA of any other change which has a material effect on the scheme and its participants. Any change may be a material alteration depending on its degree of materiality and its effect on the scheme and its participants. Consequently, an operator will need to determine whether in each case a particular change is a material alteration or not.

5Section 277 of the Act also requires notification to the FCA of certain other changes in relation to a scheme recognised under section 272 of the Act, such as changes to the operator or depositary. This should be kept in mind when considering any proposed change.

1. (1)

   5Section 282C of the Act (Recognition of parts of schemes under section 272) sets out that section 272(1) of the Act may apply 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 but not necessarily all sub-funds in an umbrella.

2. (2)

   As a result, references to a scheme in COLL 9.3.8G to COLL 9.3.12G include references to a sub-fund in an umbrella.

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’sunits;

   5. (e)

      parties connected to the scheme; and

   6. (f)

      the proposed marketing and distribution arrangements for the scheme.

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.

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.

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.

1[to follow]

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.

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.

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.

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.