Content Options

Content Options

View Options

CIS 5A.1 Introduction


CIS 5A.1.1R
  1. (1)

    This chapter applies in relation to ICVCs and AUTs which:

    1. (a)

      are not UCITS schemes; or

    2. (b)

      were UCITS schemes when their authorisation order was made and operate under Transitional provision 14.

  2. (2)

    This section (CIS 5A.1) applies to authorised fund managers and depositaries of schemes within (1).1

Application guidance

CIS 5A.1.2G

This chapter applies to non UCITS schemes which are geared futures and options schemes, property schemes, money market schemes, futures and options schemes, fund of funds schemes, umbrella schemes which do not comply with the requirements of the UCITS Directive and feeder fund schemes. This chapter also applies to UCITS schemes within transitional provision 14 (securities schemes, warrant schemes, or an umbrella scheme consisting of sub-funds which would, if separately authorised be a securities scheme or a warrant scheme). Therefore, only the sections relevant to these fund types and the cross references contained within are of application. Cross references to other rules in the relevant section for each fund type should be applied in respect only of that relevant fund type.1


CIS 5A.1.3G

This chapter helps in achieving the regulatory objective of protecting consumers by laying down minimum standards for the investments that may be held by an authorised fund. In particular:

  1. (1)

    the proportion of transferable securities and derivatives that may be held by an authorised fund is restricted if those securities and derivatives are not listed on an eligible market; the intention of this is to restrict investment in transferable securities or derivatives that cannot be accurately valued and readily disposed of; and

  2. (2)

    authorised funds are required to comply with a number of investment rules that require the spreading of risk.

Explanation of this chapter

CIS 5A.1.4G
  1. (1)

    Product Distinctiveness - CIS 2.1.4 R (Types of authorised fund) sets out the types of scheme. Each of these authorised fund types has distinct characteristics and can therefore only hold certain types of investments. The rules in this chapter outline the permitted investments for non UCITS schemes which are of the geared futures and options, property, money market, futures and options, fund of funds, non-UCITS compliant umbrella and feeder fund scheme type and for UCITS schemes within transitional provision 14. This ensures that the distinct character of each authorised fund is maintained.

  2. (2)

    Investment and borrowing powers. This chapter sets out investment and borrowing rules with which the following types of authorised fund must comply:

    1. (a)

      geared futures and options schemes;

    2. (b)

      property schemes;

    3. (c)

      money market schemes;

    4. (d)

      futures and options schemes;

    5. (e)

      fund of funds schemes;

    6. (f)

      feeder funds;

    7. (g)

      umbrella schemes which do not comply with the UCITS Directive; and

    8. (h)

      UCITS schemes under transitional provision 14.

  3. (3)

    Transitional provision 14 specifies the periods allowed under UCITS Amending Directive 2001/108/EC for UCITS schemes to continue under the narrower range of UCITS investment powers and more restricted disclosures and thus applies to:

    1. (a)

      UCITS schemes authorised on or before the entry into force (13 February 2002) of UCITS Amending Directive 2001/108/EC for a period of 5 years from that entry into force; or

    2. (b)

      UCITS schemes authorised after the entry into force of UCITS Amending Directive 2001/108/EC but before the entry into force of the rules in CIS 5A, for a period of two years from entry into force of the UCITS Amending Directive 2001/108/EC; or

    3. (c)

      UCITS schemes authorised under the rules in CIS 5A until 2 years from the entry into force of UCITS Amending Directive 2001/108/EC.1

Distinct meaning of certain terms

CIS 5A.1.5G

Terms used in this sourcebook should be interpreted and applied as they are defined. However, because of the distinct nature of investments in which an authorised fund is permitted to invest, some of these terms are not always used in a way that corresponds with their usage in certain markets, for example, the term "warrants". In the CIS sourcebook "warrants" has a slightly wider meaning than is usually attributed to it in warrant markets. The definition of warrants reflects this distinction (see also CIS 5A.9.2 G(2))1

CIS 5A.1.6G