Firms are reminded that a UCITS management company can be either:

1. (1)

   a UCITS firm; or

2. (2)

   a UCITS investment firm.

This sourcebook only applies to UCITS firms. UCITS investment firms may be either:4

1. (1)

   4BIPRU firms (see BIPRU 1.1.7A G) and the prudential requirements for those firms are set out in;

   1. (a)

      the Prudential sourcebook for Banks, Building Societies and Investment Firms and the General Prudential sourcebook.; and

   2. (b)

      the Interim Prudential sourcebook for Investment Businesses; or

2. (2)

   4IFPRU limited licence firms and the prudential requirements for those firms are set out in the Prudential sourcebook for Investment Firms and the EU CRR.

The difference between the two types of UCITS management companies is that a UCITS investment firms in addition to carrying on the activities permitted by Article 6(2) of the UCITS Directive (scheme management), may also carry on the activities permitted by Article 6(3) such as portfolio management.

3 IPRU (INV) TP 5 allows a UCITS firm that is authorised as such on or before 21 July 2013 to continue to comply, if it so wishes, with UPRU rather than IPRU (INV) 11 until 21 July 2014 or the date it becomes a UK AIFM (if earlier).

3This sourcebook will be deleted in its entirety on 22 July 2014 and, from this date, a UCITS firm must comply with IPRU (INV) 11.

1. (1)

   The purpose of this sourcebook is to amplify Principle 4 (Financial prudence) which requires a firm to maintain adequate financial resources to meet its designated investment business commitments and to withstand the risks to which its business is subject. This assists in the achievement of the statutory objectives4 of consumer protectionand protecting and enhancing the integrity of the UK financial system.4

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2. (2)

   This sourcebook also implements certain requirements of the UCITS Directive which among other matters imposes capital requirements on a UCITS management company.

   2
3. (3)

   The UCITS Directive incorporates references to provisions of the Banking Consolidation Directive and the Capital Adequacy Directive in relation to initial capital, own funds and fixed overheads. However, in line with article 163 of the CRD, the Banking Consolidation Directive and the Capital Adequacy Directive are repealed from 1 January 2014 and references to these directives are replaced with references to the CRD and the EU CRR in line with the correlation table set out in Annex II to the CRD and in Annex IV to the EU CRR.3