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
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
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.
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:
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
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
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