Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

COLL 1.2 Types of authorised fund

Types of authorised fund

COLL 1.2.1RRP

An application for an authorisation order must propose that the scheme be one of the following types:

  1. (1)

    a UCITS scheme;

  2. (2)

    a non-UCITS retail scheme, including:3

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    1. (a)

      a non-UCITS retail scheme operating as a fund of alternative investment funds (FAIF); and3

    2. (b)

      a non-UCITS retail scheme which is an umbrella with sub-funds operating as:3

      1. (i)

        FAIFs;3

      2. (ii)

        standard non-UCITS retail schemes; or3

      3. (iii)

        a mixture of (i) and (ii); or3

  3. (3)

    a qualified investor scheme.

Umbrella schemes

COLL 1.2.1AGRP

2Any authorised fund, except for an ACS that is a limited partnership scheme,4 may be structured as an umbrella with separate sub-funds.

[Note: article 1(2) second paragraph of the UCITS Directive]

Types of authorised fund - explanation

COLL 1.2.2GRP
  1. (1)

    UCITS schemes 6must in particular comply with:

    1. (a)

      COLL 3.2.8 R (UCITS obligations); and

    2. (b)

      the investment and borrowing powers rules for UCITS schemes set out in COLL 5.2 to COLL 5.5 .

  2. (2)
    1. (a)

      5Non-UCITS retail schemes are schemes that do not comply with all the conditions necessary to be a UCITS scheme6.

    2. (b)

      5A non-UCITS retail scheme is an AIF and must be managed by an AIFM.

    3. (c)

      5The UK may, under the legislation which implemented6 article 43 of AIFMD, 6impose stricter requirements on an AIFM or an AIF marketed to retail clients6 than the requirements that apply to an AIF marketed only to professional clients.

    4. (d)

      5This sourcebook contains the stricter requirements for an AIF which is6 a non-UCITS retail scheme.

    5. (e)

      5A full-scope UK AIFM must also comply with the requirements in FUND and any other applicable provisions of AIFMD.

    6. (f)

      5Non-UCITS retail schemes could become UCITS schemes, provided they are changed, so as to comply with the necessary conditions6.

    7. (g)

      5Non-UCITS retail schemes operating as FAIFs have wider powers to invest in collective investment schemes than other non-UCITS retail schemes.

    1
  3. (2A)

    A non-UCITS retail scheme may also be structured as an umbrella with sub-funds operating as:3

    1. (a)

      FAIFs;3

    2. (b)

      standard non-UCITS retail schemes; or3

    3. (c)

      a mixture of (a) and (b).3

      In these cases, rules relating to investment powers and borrowing limits apply to each sub-fund as they would to a scheme.3

  4. (3)
    1. (a)

      5Qualified investor schemes may only be promoted to:

      1. (i)

        5professional clients; and

      2. (ii)

        5retail clients who are sophisticated investors,

      5on the same terms as non-mainstream pooled investments.

    2. (b)

      5A qualified investor scheme is an AIF and must be managed by an AIFM.

    3. (c)

      [deleted]6

      5
    4. (d)

      5This sourcebook contains the stricter requirements for an AIF which is6 a qualified investor scheme.

    5. (e)

      5A full-scope UK AIFM must also comply with the requirements in FUND and any other applicable provisions of AIFMD.

    6. (f)

      5Qualified investor schemes could change to become non-UCITS retail schemes or UCITS schemes.

  5. (4)

    The changes referred to in (2) and (3) require approval by the FCA and further information on that process is provided in4COLLG 3A.1.6 G4 (Notification of changes to unit trusts (sections 251 and 252A4)) and 4COLLG 4A.1.3 G4 (Notification of changes to ICVCs (Regulations 21 and 22A4)).

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UCITS schemes

COLL 1.2.3RRP

2A UCITS scheme is deemed to be established in the United Kingdom, irrespective of whether it has been established under the laws of England and Wales, Scotland or Northern Ireland.

[Note: article 4 of the UCITS Directive]

Master UCITS

COLL 1.2.4RRP

2A master UCITS that has two or more feeder UCITS as its only unitholders satisfies the requirement that a UCITS scheme must invest capital raised from the public.

[Note: article 58(4) of the UCITS Directive]

Pension feeder funds

COLL 1.2.5GRP
  1. (1)

    5Except for (2), all provisions of the Handbook that apply:

    1. (a)

      to a feeder UCITS are also applicable to a pension feeder fund that is constituted as a UCITS scheme; and

    2. (b)

      to a feeder NURS are also applicable to a pension feeder fund that is constituted as a non-UCITS retail scheme.

  2. (2)

    A pension feeder fund may not invest in units of an EEA UCITS scheme unless that scheme is a recognised scheme 6(see COLL 5.6.27R and COLL 5.8.2AR).