The Alternative Investment Fund Managers Regulations 2013

CHAPTER 3 National Private Placement

Marketing under Article 36 of the directive

57.—(1) An AIF falls within this paragraph if it is—

(a) a third country AIF, or

(b) a UK AIF or an EEA AIF that is a feeder AIF, the master AIF of which is either managed by a third country AIFM or is a third country AIF, and

managed by an AIFM falling within paragraph (2).

(2) An AIFM falls within this paragraph if it is—

(a) a full-scope UK AIFM; or

(b) a full-scope EEA AIFM.

(3) An AIFM falling within paragraph (2) must give written notification to the FCA before marketing an AIF managed by it that falls within paragraph (1).

(4) The notification must include a statement confirming that the following conditions are met—

(a) subject to paragraph (5), the AIFM complies with the requirements of the directive;

(b) appropriate cooperation arrangements for the purpose of systemic risk oversight and in line with international standards are in place between the FCA (in the case of a UK AIFM) or the competent authority of the full-scope EEA AIFM (in the case of such an AIFM), and the supervisory authorities of the relevant third country, in order to ensure an efficient exchange of information that enables the FCA or other competent authority to carry out its duties in accordance with the directive;

(c) the relevant third country is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force.

(5) The AIFM need not comply with the requirements of Article 21 of the directive, provided that the AIFM—

(a) ensures that one or more entities, other than the AIFM, are appointed to carry out the duties mentioned in Article 21.7 to 21.9 of the directive (each an “Article 36 custodian”); and

(b) informs the FCA about the identity of such entities.

(6) In this regulation, “the relevant third country” means—

(a) in the case of a third country AIF, the country where the AIF is established; and

(b) in a case falling within paragraph (1)(b), the country where the master AIF is established.

Marketing of AIFs managed by small third country AIFMs

58.—(1) A small third country AIFM must give written notification to the FCA before marketing an AIF managed by it.

(2) The notification must include a statement confirming that the following conditions are met—

(a) the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF; and

(b) the AIFM is a small third country AIFM.

(3) The AIFM must provide the FCA with such information as the FCA directs on—

(a) the main instruments in which the AIFM trades, and

(b) the principal exposures and most important concentrations of the AIFs that it manages,

in order to enable the FCA to monitor systemic risk effectively.

(4) The FCA may not give a direction under paragraph (3) that requires an AIFM to provide information—

(a) if an investor’s acquisition of units or shares of the AIF results from marketing that is permitted because of the notification, after the date on which the final such investor disposes of such units or shares; or

(b) if there is no acquisition of units or shares of the AIF resulting from such marketing, after the date on which the AIFM ceases marketing the AIF.

Marketing under Article 42 of the directive

59.—(1) A third country AIFM that is not a small AIFM must give written notification to the FCA before marketing an AIF managed by it.

(2) The notification must include a statement confirming that the following conditions are met—

(a) the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF;

(b) the AIFM complies with the requirements of Articles 22 to 24 of the directive in so far as such provisions are relevant to the AIFM and the AIF to be marketed;

(c) if applicable, the AIFM complies with Part 5 in relation to the AIF to be marketed;

(d) appropriate cooperation arrangements for the purpose of systemic risk oversight and in line with international standards are in place between—

(i) the FCA and, if applicable, the competent authority of the other EEA State where the AIF is established, and

(ii) the supervisory authorities of the country where the third country AIFM is established and, if applicable, of the third country where the AIF is established,

in order to ensure an efficient exchange of information that enables the FCA and, if applicable, the other competent authority to carry out its duties in accordance with the directive;

(e) the country where the third country AIFM and, if applicable, the third country AIF is established is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force.

(3) During the period specified in paragraph (4), an AIFM that has given a notification under paragraph (1) in respect of an AIF must comply with—

(a) the implementing provisions applicable to full-scope UK AIFMs which relate to the provisions of Articles 22 to 24 of the directive in so far as such provisions are relevant to the AIFM and the AIF; and

(b) Part 5 in respect of that AIF (if applicable).

(4) The period specified in this paragraph starts on the date on which the AIFM gives the notification under paragraph (1) and ends—

(a) if an investor’s acquisition of units or shares of the AIF results from marketing that is permitted because of the notification, on the date on which the final such investor disposes of such units or shares; or

(b) if there is no acquisition of units or shares of the AIF resulting from such marketing, on the date on which the AIFM ceases marketing the AIF.

Manner and content of notifications

60.  A notification under regulation 57, 58 or 59 must—

(a) be made in such manner as the FCA may direct; and

(b) contain or be accompanied by such information as the FCA may direct.

Material change to information

61.  If there is a material change to the information provided in a notification under regulation 57, 58 or 59, the AIFM must give written notice of the change to the FCA—

(a) in the case of a change planned by the AIFM (“planned change”), at least one month before implementing the change; or

(b) in other cases, immediately after an unplanned change has occurred.

Revocation of entitlement to market

62.—(1) The FCA may revoke an AIFM’s entitlement to market an AIF following a notification under regulation 57, 58 or 59 if it appears to the FCA that—

(a) the AIFM, or the Article 36 custodian of that AIF, has contravened an implementing provision which applies to it;

(b) the AIFM, or the Article 36 custodian of that AIF, has in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(c) one or more of the conditions confirmed in the notification as being met is no longer satisfied;

(d) the AIF is wound up; or

(e) none of sub-paragraphs (a) to (d) applies, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(2) If the FCA proposes to revoke an AIFM’s entitlement to market an AIF on a ground mentioned in paragraph (1)(a), (b), (c) or (e), it must give a warning notice to the AIFM and, in the case of an entitlement to market following a notification under regulation 57, to the Article 36 custodian of that AIF.

(3) If the FCA decides to revoke an AIFM’s entitlement to market an AIF under paragraph (1)—

(a) it must give a decision notice to the AIFM and, in the case of an entitlement to market following a notification under regulation 57, to the Article 36 custodian of that AIF; and

(b) the AIFM or the Article 36 custodian may refer the matter to the Tribunal.

Suspension of entitlement to market

63.—(1) If one of the grounds in paragraph (2) is met, the FCA may suspend any entitlement of an AIFM to market an AIF arising out of a notification under regulation 57, 58 or 59 for a specified period, until the occurrence of a specified event or until specified conditions are complied with.

(2) The grounds are that it appears to the FCA that—

(a) the AIFM, or the Article 36 custodian of that AIF, has contravened, or is likely to contravene, an implementing provision that applies to it;

(b) the AIFM, or the Article 36 custodian of that AIF, has in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(c) one or more of the conditions confirmed in the notification as being met is no longer satisfied; or

(d) none of paragraphs (a) to (c) applies, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(3) In this regulation “specified” means specified by the FCA in a notice given under regulation 64.

Procedure on suspension

64.—(1) A suspension under regulation 63 takes effect—

(a) immediately, if the notice given under paragraph (3) states that that is the case;

(b) on such date as may be specified in the notice; or

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A suspension may be expressed to take effect immediately (or on a specified date) only if the FCA, having regard to the ground on which it is suspending the AIFM’s entitlement to market, considers that it is necessary for the suspension to take effect immediately (or on that date).

(3) If the FCA proposes to suspend an AIFM’s entitlement to market an AIF, or suspends such entitlement with immediate effect—

(a) it must give separate written notice to the AIFM and (if applicable) the Article 36 custodian of that AIF; and

(b) the AIFM or the Article 36 custodian may refer the matter to the Tribunal.

(4) A notice under paragraph (3)(a) must—

(a) give details of the suspension;

(b) inform the person to whom it is given of when the suspension takes effect;

(c) state the FCA’s reasons for giving the suspension and for its determination as to when the suspension takes effect;

(d) inform the person to whom it is given that it may make representations to the FCA within such period as may be specified in it (whether or not it has referred the matter to the Tribunal); and

(e) inform the person to whom it is given of its right to refer the matter to the Tribunal.

(5) The FCA may extend the period allowed under the notice for making representations.

(6) Paragraph (7) applies if, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) to make the suspension in the way proposed,

(b) to make the suspension in a way other than that proposed, or

(c) if it has been made, not to revoke the suspension.

(7) If this paragraph applies—

(a) the FCA must give separate written notice to the AIFM and (if applicable) the Article 36 custodian; and

(b) the AIFM or the Article 36 custodian may refer the matter to the Tribunal.

(8) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) not to make the suspension in the way proposed,

(b) to revoke a suspension,

it must give separate written notice to the AIFM and (if applicable) the Article 36 custodian.

(9) For the purposes of paragraph (1)(c), section 391(8) of the Act (publication) applies as if a notice under paragraph (3)(a), (7)(a) or (8) were a supervisory notice.