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COLL 8 Annex 1 Qualified Investor Schemes: eligible investors


This Annex belongs to COLL 8.1.3R1

1rulefirmunitsqualified investor scheme

Issue or transfer of units to:

Issue or transfer of units (see Note 1) in a qualified investor scheme which is:

Category 1 person

A person:

(1) who is already a participant in an unregulated collective investment scheme or a qualified investor scheme; or

(2) who has been, in the last 30 months, a participant in an unregulated collective investment scheme or a qualified investor scheme.

(1) that collective investment scheme; or

(2) any other collective investment scheme whose underlying property and risk profile are both 'substantially similar' (see Note 2) to those of that collective investment scheme; or

(3) a collective investment scheme which is intended to absorb or take over the assets of that collective investment scheme; or

(4) a collective investment scheme, units in which are being offered by its operator as an alternative to cash on the liquidation of that collective investment scheme.

Category 2 person

A person:

(1) for whom the authorised fund manager or an associate has taken reasonable steps to ensure that investment in the collective investment scheme is suitable; and

(2) who is an 'established' or 'newly accepted' client of the authorised fund manager or of an associate (see Notes 3 & 4).

that collective investment scheme.

Category 3 person

A person who is eligible to participate in a scheme constituted under:

(1) the Church Funds Investment Measure 1958;

(2) section 96 of the Charities Act 2011; or 2

(3) section 25 of the Charities Act (Northern Ireland) 1964.


any such collective investment scheme

Category 4 person

An eligible employee, that is, a person who is:

(1) an officer;

(2) an employee;

(3) a former officer or employee; or

(4) a member of the immediate family of any of (1)-(3);

of an employer which is (or is in the same group as) the firm, or which has accepted responsibility for the activities of the firm in carrying out the designated investment business in question.

(1) A collective investment scheme of which the instrument constituting the scheme:

(a) restricts the scheme property, apart from cash and near cash, to:

(i) (where the employer is a company) shares in and debentures of the company or any other connected company (see Note 5);

(ii) (in any case), any property, provided that the scheme takes the form of a trust which the firm reasonably believes not to contain any risk that any eligible employee may be liable to make any further payments (other than charges) for investment transactions earlier entered into, which the eligible employee was not aware of at the time he entered into them; and

(b) (in a case falling within A(1) above) restricts participation in the scheme to eligible employees, the employer and any connected company.

(2) Any collective investment scheme provided that the participation of eligible employees is to facilitate their co-investment:

(a) with one or more companies in the same group as their employer (which may include the employer); and/or

(b) with one or more clients of such a company.

Category 5 person

An exempt person (other than a person exempted only by section 39 of the Act (Exemption of appointed representatives)) if the issue or transfer of units relates to a regulated activity in respect of which the person is exempt from the general prohibition.

Any collective investment scheme.

Category 6 person

An eligible counterparty or a professional client.

Any collective investment scheme in relation to which the client is categorised as a professional client or eligible counterparty.

Category 7 person

A person:

(1) in relation to whom the authorised fund manager or an associate has undertaken an adequate assessment of his expertise, experience and knowledge and that assessment gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the person is capable of making his own investment decisions and understanding the risks involved;

(2) to whom the authorised fund manager or an associate has given a clear written warning of the protections he may lose; and

(3) who has stated in writing, in a separate document from the contract, that he is aware of the consequences of losing such protections.

Any collective investment scheme covered by the assessment.

The following Notes explain certain words and phrases used in the table above.

Note 1

Issue or transfer of units to a category of person includes any nominee company acting for such a person.

Note 2

The risk profile of a scheme will be substantially similar to that of another scheme only if there is such similarity in relation to both liquidity and volatility.

Note 3

A person is an 'established client' of another person if he has been and remains an actual client of that person in relation to designated investment business done with or through that other person.

Note 4

A person is a 'newly accepted' client of a firm if:


a written agreement relating to designated investment business exists between the client and the firm (or, if the client is normally resident outside the United Kingdom, an oral or written agreement); and


that agreement has been obtained without any contravention of any rule in COBS applying to the firm or (as far as the firm is reasonably aware) any other authorised person.

Note 5

A company is 'connected' with another company if:


they are in the same group; or


one company is entitled either alone or with another company in the same group, to exercise or control the exercise of a majority of the voting rights attributable to the share capital, which are exercisable in all circumstances at any general meeting of the other company or of its holding company.