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This chapter enables potential operators of recognised schemes to know what information and documents the FCA wish to receive to enable it to consider whether to recognise the scheme under the Act for marketing in the United Kingdom.
If the operator of a scheme makes an application under section 272 of the Act (Individually recognised overseas schemes), the application must include the information in paragraph (4).
11The documents must be in English or accompanied by a translation in English.
The documents must be certified by the operator to be true copies of the originals.
The operator of the scheme must provide the following information and documents with the application:
1the name of the scheme;
the legal form of the scheme;
the name and address of the operator;
the address of the place in the United Kingdom for service on the operator of notices or other documents;
whether the operator intends to market the scheme in the United Kingdom in a manner which will involve it carrying on a regulated activity in the United Kingdom;
the name and address of any person to whom the property subject to the scheme is entrusted for safekeeping;
the address of the place in the United Kingdom where scheme facilities (see COLL 9.4) will be maintained;
details of the arrangements for the marketing of units in the United Kingdom, namely:
the proposed commencement date;
whether the units will be sold by or through any employed sales force, authorised persons, or unsolicited calls;
a copy of the instrument constituting the fund;1
1a copy of the prospectus or any similar document giving details of the scheme;
a copy of the latest annual report and any subsequent half-yearly report;2
1a copy of any other document affecting the rights of participants in the scheme; and2
1(where applicable) a copy of the key information document (see COLL 9.3.4G).2
An operator of a recognised scheme3 must ensure the prospectus:
contains a statement that "Complaints about the operation of the scheme may be made to the FCA."; and
states whether or not investors in the scheme would be covered by the compensation scheme, and if so, it must state how they are covered and who they would need to contact for further information.
An operator of 3a recognised scheme 3 must comply with the requirements set out in COLL 4.2 (Pre-sale notifications).
11Where a recognised scheme3is managed and authorised in Guernsey, Jersey, or the Isle of Man, the prospectus need not comply with the requirements of COLL 4.2.5 R (Table: contents of prospectus), providing it contains corresponding matter required under the law in its home territory.
112The PRIIPs Regulation requires the manufacturer of a PRIIP to draw up a key information document in accordance with the PRIIPs Regulation before that PRIIP is made available to retail investors (as defined in the PRIIPs Regulation).
The requirements of the PRIIPs Regulation are directly applicable.
As a result, when a recognised scheme 3 is made available to retail clients in the United Kingdom the operator must draw up a key information document in accordance with the PRIIPs Regulation, unless the operator of such a scheme is otherwise exempt from such a requirement under the PRIIPs Regulation for the time being3.
4An operator of a scheme recognised under section 272 of the Act must provide a certificate to the FCA in writing that:
sets out what steps it has taken to inform itself of any changes to the regulatory requirements for the relevant type of comparable authorised scheme taking effect during the most recent financial year of the scheme; and
explains whether, and if so how, any such changes, together with any changes to the scheme that have occurred during this period, may affect the scheme’s ability to satisfy the requirements referred to in section 272(1)(d) of the Act.
The certificate must be provided to the FCA no later than:
one month following the publication of the annual report and accounts of the scheme; or
if the publication of the annual report and accounts of the scheme is delayed, one month after the last day on which the publication of the annual report and accounts of the scheme was due.
The certificate must be signed by an authorised signatory of the operator.
The certificate may apply to multiple sub-funds in an umbrella that are recognised under section 272 of the Act, if the names of each relevant sub-fund and of the umbrella are clearly stated.
The certificate must be delivered to the FCA by:
sending a copy by email addressed to recognisedcis@fca.org.uk, including the subject line: “S.277A Certificate – [insert full name(s) of scheme]”; or
by post to: Financial Conduct Authority, attn. S.277A Certificates, Fund Authorisations Team, Asset Management Department, Wholesale Supervision, 12 Endeavour Square, London E20 1JN, United Kingdom.
4An operator of a scheme recognised under section 272 of the Act need not provide a certificate under COLL 9.3.5D if it has already sent the required information to the FCA within the last 12 months as the result of:
a requirement relating to an application for recognition of the scheme under section 274(2)(c) of the Act;
a direction relating to a proposed alteration of the scheme or to a change to the operator, trustee or depositary under section 277(5)(b) of the Act; or
a previous certificate being provided under section 277A of the Act.
4The operator of a scheme recognised under section 272 of the Act should seek advice from professionals with appropriate qualifications or professional knowledge, such as a qualified solicitor, chartered accountant or compliance consultant, before submitting the certificate to the FCA under COLL 9.3.5D.
5Section 277(1) of the Act (Alteration of schemes and changes of operator, trustee or depositary) requires notification by the operator to the FCA of certain proposed alterations to a scheme recognised under section 272 of the Act which, if made, would be a material alteration. The types of alterations that constitute, or are likely to constitute, a material alteration are set out at COLL 9.3.10R and COLL 9.3.11G.
5For the purposes of section 277(1), a material alteration is an alteration which:
changes the purpose or nature of the scheme;
alters the risk profile of the scheme;
may materially prejudice a participant in the scheme;
affects the ability of participants in the scheme to exercise their rights in relation to their investments;
introduces any new type of payment or materially increases other types of payment that a participant in the scheme would have to pay out of scheme property;
changes the legal form of the scheme;
changes the name of the scheme or the name of the umbrella of which a sub-fund is a part;
will result in the restructuring of the scheme or a merger with another scheme;
changes the regulatory status of the scheme;
changes the regulatory status of the operator or, if the scheme has a depositary, of the depositary;
changes the composition of the board of directors, committee of management or other governing body of the scheme, if it has one; or
otherwise has a material effect on the scheme and its participants.
5For the purpose of COLL 9.3.10R, a material alteration is likely to include:
any material changes to the investment objective or policy;
any change to the investment strategy that involves taking exposure to a new class of assets with a different risk profile;
any change affecting arrangements for the redemption of units on behalf of participants, including any arrangements to sell units on an investment exchange;
any change to the facilities maintained in the United Kingdom, including marketing arrangements, in accordance with COLL 9.4; and
any expansion or limitation of the powers and duties of the operator or, if the scheme has a depositary, of the depositary.
In addition to the particular matters specified in COLL 9.3.10R(1) to (11), COLL 9.3.10R(12) requires the operator of a scheme recognised under section 272 to notify the FCA of any other change which has a material effect on the scheme and its participants. Any change may be a material alteration depending on its degree of materiality and its effect on the scheme and its participants. Consequently, an operator will need to determine whether in each case a particular change is a material alteration or not.
5Section 282C of the Act (Recognition of parts of schemes under section 272) sets out that section 272(1) of the Act may apply in relation to part of a collective investment scheme as it applies in relation to such a scheme. In our view, this means that the FCA is able to recognise one or more but not necessarily all sub-funds in an umbrella.
As a result, references to a scheme in COLL 9.3.8G to COLL 9.3.12G include references to a sub-fund in an umbrella.
The operator of a recognised scheme5must maintain facilities in the United Kingdom in order to satisfy the requirements of COLL 9.4.2 R to COLL 9.4.6 R.
4In this section, a facility is a place of business that complies with COLL 9.4.6 R (Place of facilities).
The operator of a recognised scheme must maintain facilities in the United Kingdom for any person, for inspection (free of charge) and for the obtaining (free of charge, in the case of the documents at (c), (d) and (e)3, and otherwise at no more than a reasonable charge) of copies in English of:
3the instrument constituting the fund;4
4any instrument amending the instrument constituting the fund;4
4the latest prospectus (which must include the address where the facilities are maintained and details of those facilities);
for a recognised scheme which is an EEA UCITS scheme5, the EEA key investor information document;1 and
1the latest annual and half-yearly reports.
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2In relation to notices and documents sent by operators and depositaries to and from the United Kingdom, COLL 4.4.12 R (Notice to Unitholders) and COLL 4.4.13 R (Other notices) apply.
The operator must maintain facilities in the United Kingdom for any person where:
information in English can be obtained about prices of units in the scheme; and
a participant may redeem or arrange for redemption of units in the scheme and obtain payment.
An operator is treated as complying with paragraph (1) if it ensures participants may sell their units on an investment exchange at a price not significantly different from net asset value; and if so, must inform participants of the investment exchange.
The address of the facilities maintained by the operator in accordance with this section and the details of the facilities so maintained must be stated in the prospectus of the scheme.
The address of the facilities referred to in (1) must be the address of the operator's principal place of business in the United Kingdom, or, if there is no such address,such other address in the United Kingdom where the operator can be contacted.4
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