Related provisions for PERG 6.1.1
Schedule to the Recognition Requirements Regulations, Paragraph 9A-9H3
1(1) |
[A UK RIE] operating a multilateral trading facility or an organised trading facility3 must also operate a regulated market3. |
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(2) |
[A UK RIE] operating a multilateral trading facility or an organised trading facility3 must comply with those requirements of- |
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(a) |
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(b) |
any directly applicable EU legislation made under Chapter I;3 |
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which are applicable to a market operator3 ... operating such a facility. |
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(3) |
The requirements of this paragraph do not apply for the purposes of section 292(3)(a) of the Act (requirements for overseas investment exchanges and overseas clearing houses). |
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(4)3 |
A [UK RIE] operating a multilateral trading facility or organised trading facility must provide the FCA with a detailed description of - |
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(a) |
the functioning of the multilateral trading facility or organised trading facility; |
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(b) |
any links to another trading venue owned by the same [UK RIE] or to a systematic internaliser owned by the same exchange; and |
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(c) |
a list of the facility’s members, participants and users. |
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[Note:MiFID ITS 19 prescribes the content and format of the description of the functioning of a MTF or OTF to be provided to the FCA]3 |
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(5)3 |
Any multilateral trading facility or an organised trading facility operated by the [UK RIE] must have at least three materially active members or users who each have the opportunity to interact with all the others in respect of price formation. |
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Paragraph 9B – Specific requirements for multilateral trading facilities: execution of orders3 |
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(1)3 |
A [UK RIE] must have non-discretionary rules for the execution of orders on a multilateral trading facility operated by it. |
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(2)3 |
A [UK RIE] must not on a multilateral trading facility operated by it - |
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(a) |
execute any client orders against its proprietary capital; or |
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(b) |
engage in matched principal trading. |
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Paragraph 9C – Specific requirements for multilateral trading facilities: access to a facility3 |
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The rules of the [UK RIE] about access to, or membership of, a multilateral trading facility regulated market operated by it must permit the [UK RIE] to give access to or admit to membership to (as the case may be) only -3 |
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(a) |
an investment firm authorised under Article 5 of the markets in financial instruments directive; |
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(b) |
a credit institution authorised in accordance with the capital requirements directive; or |
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(c) |
a person who – |
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(i) |
is of sufficient good repute; |
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(ii) |
has a sufficient level of trading ability, and competence and experience; |
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(iii) |
where applicable, has adequate organisational arrangements; and |
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(iv) |
has sufficient resources for the role it is to perform, taking account of the financial arrangements the [UK RIE] has established in order to guarantee the adequate settlement transactions. |
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Paragraph 9D – Specific requirements for multilateral trading facilities: disclosure3 |
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(1)3 |
The rules of the [UK RIE] must provide that where it, without obtaining the consent of the issuer, admits to trading on a multilateral trading facility operated by it a transferable security which has been admitted to trading on a regulated market, the [UK RIE] may not require the issuer of that security to demonstrate compliance with the disclosure obligations. |
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(2)3 |
The [UK RIE] must maintain arrangements to provide sufficient publicly available information (or satisfy itself that sufficient information is publicly available) to enable users of a multilateral trading facility operated by it to form investment judgements, taking into account both the nature of the users and the types of instruments traded. |
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(3)3 |
In this paragraph, “the disclosure obligations” has the same meaning as in paragraph 9ZB. |
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Paragraph 9E – SME growth markets3 |
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(1)3 |
A [UK RIE] operating a multilateral trading facility which has registered that facility as an SME growth market in accordance with Article 33 of the markets in financial instruments directive (an “exchange-operated SME growth market”) must comply with rules made by the FCA for the purposes of this paragraph. |
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[Note:REC 2.16A.1D]4 |
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(2)3 |
An exchange-operated SME growth market must not admit to trading a financial instrument which is already admitted to trading on another SME growth market unless the issuer of the instrument has been informed of the proposed admission to trading and has not objected. |
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(3)3 |
Where an exchange-operated SME growth market exchange admits a financial instrument to trading in the circumstances of paragraph (2), that exchange-operated SME growth market may not require the issuer of the financial instrument to demonstrate compliance with - |
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(a) |
any obligation relating to corporate governance, or |
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(b) |
the disclosure obligations. |
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(4)3 |
In this paragraph, “the disclosure obligations” has the same meaning as in paragraph 9ZB. |
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Paragraph 9F – Specific requirements for organised trading facilities: execution of orders3 |
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(1)3 |
[A UK RIE] operating an organised trading facility must - |
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(a) |
execute orders on that facility on a discretionary basis in accordance with sub-paragraph (4); |
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(b) |
not execute any client orders on that facility against its proprietary capital or the proprietary capital of any entity that is part of the same group or legal person as the [UK RIE] unless in accordance with sub-paragraph (2); |
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(c) |
not operate a systematic internaliser within the same legal entity; |
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(d) |
ensure that the organised trading facility does not connect with a systematic internaliser in a way which enables orders in an organised trading facility and orders or quotes in a systematic internaliser to interact; and |
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(e) |
ensure that the organised trading facility does not connect with another organised trading facility in a way which enables orders in different organised trading facilities to interact. |
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(2)3 |
A [UK RIE] may only engage in - |
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(a) |
matched principal trading on an organised trading facility operated by it in respect of- |
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(i) |
bonds, |
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(ii) |
structured finance products, |
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(iii) |
emission allowances, |
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(iv) |
derivatives which have not been declared subject to the clearing obligation in accordance with Article 5 of the EMIR regulation, |
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where the client has consented to that; or |
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(b) |
dealing on own account on an organised trading facility operated by it, otherwise than in accordance with sub-paragraph (a), in respect of sovereign debt instruments for which there is not a liquid market. |
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(3)3 |
If the [UK RIE] engages in matched principal trading in accordance with sub-paragraph (2)(a) it must establish arrangements to ensure compliance with the definition of matched principal trading in article 4.1.38 of the markets in financial instruments directive. |
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(4)3 |
The discretion which the [UK RIE] must exercise in executing a client order may only be the discretion mentioned in sub-paragraph (5) or in sub-paragraph (6) or both. |
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(5)3 |
The first discretion is whether to place or retract an order on the organised trading facility. |
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(6)3 |
The second discretion is whether to match a specific client order with other orders available on the organised trading facility at a given time, provided the exercise of such discretion is in compliance with specific instructions received from the client and in accordance with the [UK RIE’s] obligations under Article 27 of the markets in financial instruments directive. |
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(7)3 |
Where the organised trading facility crosses client orders the [UK RIE] may decide if, when and how much of two or more orders it wants to match within the system. |
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(8)3 |
Subject to the requirements of this paragraph, with regard to a system that arranges transactions in non-equities, the [UK RIE] may facilitate negotiation between clients so as to bring together two or more comparable potentially trading interests in a transaction. |
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(9)3 |
The [UK RIE] must comply with rules made by the FCA as to how Articles 24, 25, 27 and 28 of the markets in financial instruments directive apply to its operation of an organised trading facility. |
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(10)3 |
Nothing in this paragraph prevents a [UK RIE] from engaging an investment firm to carry out market making on an independent basis on an organised trading facility operated by the [UK RIE]provided the investment firm does not have close links with the [UK RIE]. |
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(11)3 |
In this paragraph - “close links” has the meaning given in Article 4.1.1 of the markets in financial instruments directive; “investment firm” has the meaning given in Article 4.1.1 of the markets in financial instruments directive; “non-equities” means bonds, structured finance products, emissions allowances and derivatives traded on a trading venue to which Article 8(1) of the markets in financial instrument regulation applies. |
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Paragraph 9G – Specific requirements for organised trading facilities: disclosure3 |
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(1)3 |
The rules of the [UK RIE] must provide that where it, without obtaining the consent of the issuer, admits to trading on an organised trading facility operated by it a transferable security which has been admitted to trading on a regulated market, the [UK RIE] may not require the issuer of that security to demonstrate compliance with the disclosure obligations. |
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(2)3 |
The [UK RIE] must maintain arrangements to provide sufficient publicly available information (or satisfy itself that sufficient information is publicly available) to enable users of the organised trading facility operated by it to form investment judgements, taking into account both the nature of the users and the types of instruments traded. |
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(3)3 |
In this paragraph, “the disclosure obligations” has the same meaning as in paragraph 9ZB. |
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Paragraph 9H – Specific requirements for organised trading facilities: FCA request for information3 |
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(1)3 |
A [UK RIE] must, when requested to do so, provide the FCA with a detailed explanation in respect of an organised trading facility operated by it, or such a facility it proposes to operate, of - |
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(a) |
why the organised trading facility does not correspond to and cannot operate as a multilateral trading facility, a regulated market or a systematic internaliser; |
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(b) |
how discretion will exercised in executing client orders, and in particular when an order to the organized trading facility may be retracted and when and how two or more client orders will be matched within the facility; and |
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(c) |
its use of matched principal trading. |
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(2)3 |
Any information required under sub-paragraph (1) must be provided to the FCA in the manner which it considers appropriate. |
This table belongs to COLL 3.2.4 R (Matters which must be included in the instrument constituting the fund14)
14Name of scheme |
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1 |
A statement of: |
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(1) |
the name of the authorised fund; and |
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(2) |
whether the authorised fund is a UCITS scheme or a non-UCITS retail scheme. |
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Investment powers in eligible markets |
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2 |
A statement that, subject to any restriction in the rules in this sourcebook or the instrument constituting the fund14, the scheme has the power to invest in any eligible securities market or deal on any eligible derivatives market to the extent that power to do so is conferred by COLL 5 (Investment and borrowing powers). 14 |
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Unitholder's liability to pay |
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3 |
A provision that a unitholder in an AUT, ICVC or co-ownership scheme12 is not liable to make any further payment after he has paid the price of his units and that no further liability can be imposed on him in respect of the units which he holds. |
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3A |
A provision that a unitholder in a limited partnership scheme is not liable for the debts or obligations of the limited partnership scheme beyond the amount of the scheme property which is available to the authorised contractual scheme manager to meet such debts or obligations, provided that the unitholder does not take part in the management of the partnership business.12 |
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3B |
A provision that the exercise of rights conferred on limited partners by FCArules does not constitute taking part in the management of the partnership business.12 |
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Base currency |
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4 |
A statement of the base currency of the scheme. |
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Valuation and pricing |
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5 |
A statement setting out the basis for the valuation and pricing of the scheme. |
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Duration of the scheme |
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6 |
If the scheme is to be wound up after a particular period expires, a statement to that effect. |
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Object of the scheme |
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7 |
A statement: |
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(1) |
as to the object of the scheme, in particular the types of investments and assets in which it and each sub-fund (where applicable) may invest; and |
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(2) |
that the object of the scheme is to invest in property of that kind with the aim of spreading investment risk and giving unitholders the benefits of the results of the management of that property. |
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27A |
Where the authorised fund is a qualifying money market fund, a statement to that effect and a statement that the authorised fund's investment objectives and policies will meet the conditions specified in the definition of qualifying money market fund. |
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[deleted]13 13 |
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Government and public securities: investment in one issuer |
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8 |
Where relevant, for a UCITS scheme, a statement in accordance with COLL 5.2.12 R (Spread: government and public securities) with the names of 15the individual states, local authorities 15or public international bodies issuing or guaranteeing the transferable securities or approved money-market instruments15in which more than 35% in value of the scheme property may be invested15. |
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Classes of unit |
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9 |
A statement: |
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(1) |
specifying the classes of unit that may be issued, and for a scheme which is an umbrella, the classes that may be issued in respect of each sub-fund; and |
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(2) |
if the rights of any class of unit differ, a statement describing those differences in relation to the differing classes. |
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Authorised fund manager's charges and expenses |
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10 |
A statement setting out the basis on which the authorised fund manager may make a charge and recover expenses out of the scheme property. |
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Issue or cancellation directly through the ICVC or depositary of an AUT or ACS12 |
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11 |
Where relevant, a statement authorising the issue or cancellation of units to take place through the ICVC or depositary of an AUT or ACS directly.12 12 |
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In specie issue and cancellation |
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12 |
Where relevant, a statement authorising payment for the issue or cancellation of units to be made by the transfer of assets other than cash. |
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Restrictions on sale and redemption |
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13 |
Where relevant, the restrictions which will apply in relation to the sale and redemption of units under COLL 6.2.16 R (Sale and redemption). |
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Voting at meetings |
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14 |
The manner in which votes may be given at a meeting of unitholders under COLL 4.4.8 R (Voting rights). |
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Certificates |
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15 |
A statement: |
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(1) |
for ICVCs15, authorising the issue of bearer certificates if any, and how such holders are to identify themselves; and 12 |
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(2) |
authorising the person responsible for the register to charge for issuing any document recording, or for amending, an entry on the register, other than on the issue or sale of units. |
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Income |
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16 |
A statement setting out the basis for the distribution or re-investment of income. |
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Income equalisation |
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17 |
Where relevant, a provision for income equalisation. |
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Redemption or cancellation of units on breach of law or rules |
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18 |
A statement that where any holding of units by a unitholder is (or is reasonably considered by the authorised fund manager to be) an infringement of any law, governmental regulation or rule, those units must be redeemed or cancelled. |
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ICVCs: larger and smaller denomination shares |
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19 |
A statement of the proportion of a larger denomination share represented by a smaller denomination share for any relevant unit class. |
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ICVCs: resolution to remove a director |
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20 |
A statement that the ICVC may (without prejudice to the requirements of regulation 21 of the OEIC Regulations (The Authority's approval for certain changes in respect of a company), by a resolution passed by a simple majority of the votes validly cast for and against the resolution at a general meeting of unitholders, remove a director before his period of office expires, despite anything else in the ICVC's instrument of incorporation or in any agreement between the ICVC and that director. |
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ICVCs: unit transfers |
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21 |
A statement that the person designated for the purposes of paragraph 4 of Schedule 4 to the OEIC Regulations (Share transfers) is the person who, for the time being, is the ACD of the ICVC.1 7 |
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ICVCs and ACSs: Charges and expenses12 |
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22 |
A statement that charges or expenses of the ICVCor ACS12 may be taken out of the scheme property.10 |
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10ICVCs: Umbrella schemes - principle of limited recourse |
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1022A |
For an ICVC which is an umbrella, a statement that the assets of a sub-fund belong exclusively to that sub-fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the umbrella, or any other sub-fund, and shall not be available for any such purpose. |
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Co-ownership schemes: umbrella schemes - principle of limited recourse |
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22B |
For a co-ownership scheme which is an umbrella, a statement that the property subject to a sub-fund is beneficially owned by the participants in that sub-fund as tenants in common (or, in Scotland, is the common property of the participants in that sub-fund) and must not be used to discharge any liabilities of, or meet any claims against, any person other than the participants in that sub-fund.12 |
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AUTs: governing law for a trust deed |
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23 |
A statement that the trust deed is made under and governed by the law of England and Wales, Wales or Scotland or Northern Ireland. |
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AUTs: trust deed to be binding and authoritative |
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24 |
A statement that the trust deed: |
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(1) |
is binding on each unitholder as if it had been a party to it and that it is bound by its provisions; and |
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(2) |
authorises and requires the trustee and the manager to do the things required or permitted of them by its terms. |
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AUTs: declaration of trust |
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25 |
A declaration that, subject to the provisions of the trust deed and all rules made under section 247 of the Act (Trust scheme rules) and for the time being in force: |
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(1) |
the scheme property (other than sums standing to the credit of the distribution account) is held by the trustee on trust for the unitholders according to the number of units held by each unitholder or, where relevant, according to the number of undivided shares in the scheme property represented by the units held by each unitholder; and |
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(2) |
the sums standing to the credit of the distribution account are held by the trustee on trust to distribute or apply them in accordance with COLL 6.8 (Income: accounting, allocation and distribution). |
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AUTs: trustee's remuneration |
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26 |
Where relevant, a statement authorising payments to the trustee by way of remuneration for its services to be paid (in whole or in part) out of the scheme property. |
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AUTs: responsibility for the register |
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27 |
A statement identifying the person responsible under the rules for the maintenance of the register. |
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ACSs: governing law for a contractual scheme deed |
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1227A |
A statement that the contractual scheme deed is made under and governed by the law of England and Wales, or Scotland or Northern Ireland. |
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ACSs: contractual scheme deed to be binding and authoritative |
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1227B |
A statement that the contractual scheme deed: |
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(1) |
is binding on each unitholder as if it had been a party to it and that it is bound by its provisions; and |
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(2) |
authorises and requires the depositary and the authorised contractual manager to do the things required or permitted of them by its terms. |
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ACSs: ownership of scheme property |
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1227C |
A statement that, subject to the provisions of the contractual scheme deed and all rules made under section 261I of the Act (Contractual scheme rules) and for the time being in force: |
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(1) |
the scheme property (other than sums standing to the credit of the distribution account) is held by, or to the order of, the depositary for and on behalf of the unitholders according to the number of units held by each unitholder or, where relevant, according to the number of undivided shares in the scheme property represented by the units held by each unitholder; |
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(2) |
the sums standing to the credit of the distribution account are held by the depositary to distribute or apply them in accordance with COLL 6.8 (Income: accounting, allocation and distribution); and |
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(3) |
the scheme property of a co-ownership scheme is beneficially owned by the participants as tenants in common (or, in Scotland, is the common property of the participants). |
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ACSs: responsibility for the register |
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1227D |
A statement identifying the person responsible under the rules for the maintenance of the register. |
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ACSs: UCITS and NURS eligible investors |
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1227E |
For an ACS which is a UCITS scheme or a non-UCITS retail scheme, a statement that units may not be issued to a person other than a: |
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(1) |
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(2) |
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(3) |
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1227F |
A statement that the authorised contractual scheme manager must redeemunits as soon as practicable after becoming aware that those units are vested in anyone (whether as a result of subscription or transfer of units) other than a person meeting the criteria in paragraph 27E. |
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ACSs: UCITS and NURS transfer of units |
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1227G |
(1) |
A statement whether the transfer of units in the ACSscheme is either: |
(a) prohibited; or |
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(b) allowed |
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(2) |
Where transfer of units is allowed in accordance with (1)(b), a statement that units may only be transferred in accordance with the conditions specified by FCArules, including that units may not be transferred to a person other than a: |
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(b) large ACS investor; or |
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(3) |
For a co-ownership scheme which is an umbrella, a statement in accordance with (1)(a) or (1)(b) and, where appropriate, a statement in accordance with (2), must also be made for the sub-funds. Where individual sub-funds have differing policies in relation to transfer of units, separate statements are required. |
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Co-ownership schemes: constitution |
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1227H |
For a co-ownership scheme, a statement that the arrangements constituting the scheme are intended to constitute a co-ownership scheme as defined in section 235A(2) of the Act. |
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Co-ownership schemes: operator's powers |
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1227I |
A statement that the operator of a co-ownership scheme is authorised to: |
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(1) |
acquire, manage and dispose of the scheme property; and |
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(2) |
enter into contracts which are binding on unitholders for the purposes of, or in connection with, the acquisition, management or disposal of scheme property. |
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Co-ownership schemes: winding-up |
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1227J |
A statement that the operator and depositary of a co-ownership scheme are required to wind up the scheme if directed to do so by the FCA in exercise of its power under section 261X (Directions) or section 261Z (Winding up or merger of master UCITS) of the Act. |
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Limited partnership schemes: participants |
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1227K |
A statement that the limited partners, other than the nominated partner, are to be the participants in the scheme. |
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Limited partnership schemes: resignation of limited partners |
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1227L |
A statement that the scheme is not dissolved on any person ceasing to be a limited partner or nominated partner provided that there remains at least one limited partner. |
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Limited partnership schemes: inability to operate as an umbrella |
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1227M |
A statement that the limited partnership scheme prohibits pooling as is mentioned in section 235(3)(a) of the Act in relation to separate parts of the scheme property, with the effect that the scheme cannot be an umbrella. |
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3Investment in overseas4 property through an intermediate holding vehicle |
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328 |
3If investment in an overseas4 immovable is to be made through an intermediate holding vehicle or a series of intermediate holding vehicles, a statement that the purpose of that intermediate holding vehicle or series of intermediate holding vehicles will be to enable the holding of overseas4 immovables by the scheme. |