The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019

PART 3 Amendments of the Undertakings for Collective Investment in Transferable Securities Regulations 2011

Introductory provision

33.  The Undertakings for Collective Investment in Transferable Securities Regulations 2011(1) are amended in accordance with this Part.

Interpretation of Part 4 (mergers)

34.—(1) Regulation 7(2) is amended as follows.

(2) In paragraph (1)—

(a) omit the definition of “cross-border merger”;

(b) in the definition of “depositary”(3)—

(i) at the end of sub-paragraph (aa), insert “and”;

(ii) at the end of sub-paragraph (b), omit “and”;

(iii) omit sub-paragraph (c);

(c) omit the definition of “domestic merger”;

(d) omit the definition of “EEA management company”(4);

(e) for the definition of “EEA UCITS” substitute—

““feeder UCITS” has the meaning given in section 237(3) of the Act;”;

(f) in the definition of “implementing provision”(5), in paragraph (b), for “implements” substitute “implemented”;

(g) in the definition of “manager”(6) omit sub-paragraph (c);

(h) after the definition of “manager” insert—

““master UCITS” has the meaning given in section 237(3) of the Act;

“merger” means an operation whereby one or more UK UCITS, or sub-funds (otherwise referred to as investment compartments) of UK UCITS ((the “merging UCITS”) (which continue to exist until the liabilities have been discharged)) transfer their net assets to—

(a)

another sub-fund of the same UK UCITS;

(b)

a UK UCITS which they form;

(c)

another existing UK UCITS; or

(d)

a sub-fund of another existing UK UCITS;

(the “receiving UCITS”);”;

(i) omit the definition of “UK management company”(7);

(j) for the definition of “UK UCITS” substitute—

““UK UCITS” has the meaning given in section 237(3) of the Act;”;

(k) in the definition of “unit-holders”(8) in sub-paragraph (b) omit—

(i) “or an EEA UCITS”;

(ii) “or EEA UCITS”;

(l) in the definition of “units”(9)—

(i) at the end of sub-paragraph (a) insert “and”;

(ii) at the end of sub-paragraph (b) omit “and”;

(iii) omit sub-paragraph (c).

(3) In paragraph (2)(10) omit the words from “Expressions used in this Part” to “as in the UCITS directive and,”.

(4) After paragraph (2), insert—

“(3) Any reference in these Regulations to the Collective Investment Schemes sourcebook is a reference to the Collective Investment Schemes sourcebook made under the Act by the Authority, as it has effect on exit day.”.

Reconstruction or amalgamation

35.—(1) Regulation 8 is amended as follows.

(2) In paragraph (1)(11), for the words from “involving” to the end substitute “which is a merger where the UK UCITS involved (or, if two or more are involved, at least one of them) has given notice to the Authority under paragraph 20B of Schedule 3 to the Act(12), and which takes the form of a merger by scheme of arrangement”.

(3) Omit paragraphs (2) and (3).

(4) In paragraph (4)—

(a) in sub-paragraph (a)—

(i) after “transferor” insert “UK”;

(ii) after “of a” insert “UK”;

(b) in sub-paragraph (b)—

(i) in paragraph (ii) after “existing” insert “UK”;

(ii) in paragraph (iii) after “a” insert “UK”.

Application for authorisation

36.—(1) Regulation 9 is amended as follows.

(2) In paragraph (1) omit “UK”.

(3) In paragraph (2)—

(a) omit sub-paragraph (b);

(b) in sub-paragraph (c)—

(i) omit “or by the competent authorities of an EEA UCITS involved in the merger”;

(ii) in paragraph (i) omit “the type of merger and of”.

(4) Omit paragraphs (3) and (5).

(5) In paragraph (8)—

(a) in sub-paragraph (b) for “UK” substitute “merging”;

(b) for sub-paragraph (c) substitute—

“(c) the receiving UCITS gave the Authority notice of its intention to market its units in another EEA State and, before exit day, that notification was transmitted under Article 93 of the UCITS directive to the competent authorities of those EEA States in which the merging UCITS was able to market its units; and”;

(c) for sub-paragraph (d), substitute—

“(d) the Authority is satisfied with the proposed information to be provided to unit-holders.”.

(6) Omit paragraph (10).

Modification of information

37.  In regulation 10—

(a) in paragraph (1), omit “as the competent authority for a receiving UK UCITS”;

(b) omit paragraphs (4) and (5).

Report by depositary or auditor

38.  In regulation 11—

(a) in paragraph (1)—

(i) in the opening words omit “UK”;

(ii) in sub-paragraph (a) omit “referred to in Article 47(1) of the UCITS directive”;

(iii) in sub-paragraph (c) omit “, as referred to in Article 47(1) of the UCITS directive”;

(b) in paragraph (4)(b) omit “and, in relation to a cross-border merger, the competent authorities of the EEA UCITS concerned”.

Right of redemption

39.  In regulation 12—

(a) in paragraph (1)(b), in the opening words, after “another” insert “UK”;

(b) in paragraph (2), omit “under Article 47.1 of the directive”;

(c) in paragraph (4) for “within the meaning of section 237(3) of the Act, the master UCITS” substitute “it”.

Consequences of a merger

40.—(1) Regulation 13 is amended as follows.

(2) Omit paragraphs (1) and (2).

(3) For paragraph (4) substitute—

“(4) Subject to paragraph (6) the consequences take effect on the date specified in the order made by the Authority under regulation 9 (application for authorisation).”.

(4) In paragraph (5) omit “(including by the law of another EEA State)”.

(5) in paragraph (6) for “the competent authorities of each of its feeder UCITS” substitute “the Authority”.

Division of a master UCITS

41.—(1) Regulation 15 is amended as follows.

(2) In paragraph (2)—

(a) after “a master UCITS” insert “which is a UK UCITS and”;

(b) after “two or more” insert “UK”.

(3) In paragraph (3) for “competent authorities of each of its feeder UCITS” substitute “Authority”.

(4) In paragraph (5)(13) after “feeder UCITS in the” insert “UK”.

Depositary liability: general provisions

42.  In regulation 15B(14)—

(a) in paragraph (1) after “depositary of a” insert “UK”;

(b) in paragraph (2)(a) for “Article 22a of the UCITS directive” substitute “rules 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook”.

Depositary liability for loss of financial instruments held in custody

43.  In regulation 15C, in paragraph (1)—

(a) for “Article 22.5(a) of the UCITS directive” substitute “rule 6.6B.18 of the Collective Investment Schemes sourcebook”;

(b) for “any directly applicable regulation made under Article 26b(f) of the UCITS directive” substitute “Article 18 of Commission Delegated Regulation (EU) 2016/438 of 17 December 2015 supplementing Directive 2009/65/EC of the European Parliament and of the Council with regard to obligations of depositaries”.

Depositary liability for other losses

44.  In regulation 15D—

(a) after “If a” insert “UK”;

(b) after “unit-holders of a” insert “UK”.

Omission of Part 5B

45.  Omit Part 5B (regulations 15E to 15I).

Amendment of regulation 16

46.  In regulation 16, for “The Schedule” substitute “Schedule 1”.

Transfer of UCITS directive functions

47.—(1) After regulation 17, insert—

“PART 7

Transfer of UCITS directive functions

18.   The Authority may make technical standards for the purposes set out in Schedule 2 to this Regulation.”.

(2) Renumber the Schedule as Schedule 1, and after that Schedule insert—

Regulation 18

“SCHEDULE 2 Directive functions transferred to the Authority

1.   The purposes mentioned in regulation 18 are as follows.

2.   To specify the information to be provided to the Authority in the application for authorisation of a UCITS.

3.   To specify—

(a) the information to be provided to the Authority in the application for the authorisation of the management company, including the programme of activity;

(b) the requirements applicable to the management company in relation to paragraph 2C(1)(f) of Schedule 6 to the Act and the information to be included in the notification by the Authority as to whether or not authorisation has been granted as provided for in sections 55V(1), 55X(1), (2) and (4), 387(1) and 388(1) of the Act; and

(c) the requirements applicable to shareholders and members with qualifying holdings, as well as obstacles which may prevent effective exercise of the supervisory functions of the Authority, as provided for in section 55U(4) of the Act and in paragraph 2C and 3B of Schedule 6 to the Act, in accordance with Part 12 of the Act.

5.   To determine standard forms, templates and procedures for the notification or provision of information provided for in paragraphs 3(a) and (b).

6.   To specify the information to be provided to the Authority in the application for the authorisation of the contractual scheme, unit trust scheme, or open-ended investment company as a UK UCITS, including the programme of operations.

7.   To establish standard forms, templates and procedures for the provision of information referred to in paragraph 6.

8.   To specify the provisions concerning the content of the prospectus, the annual report and the half-yearly report, and the format of those documents.

9.   To specify the conditions which need to be met by the UCITS after the adoption of the temporary suspension of the re-purchase or redemption of the units of the UCITS, once the suspension has been decided.”.

(1)

S.I. 2011/1613.

(2)

Regulation 7(1) was amended by S.I. 2013/1388 and S.I. 2016/225; there are other amendments but none is relevant.

(3)

The definition of “depository” was amended by S.I. 2013/1388.

(4)

The definition of “EEA management company” was inserted by S.I. 2016/225.

(5)

The definition of “implementing provision” was inserted by S.I. 2016/225.

(6)

The definition of “manager” was substituted by S.I. 2013/1388.

(7)

The definition of “UK management company” was inserted by S.I. 2016/225.

(8)

The definition of “unit-holders” was amended by S.I. 2013/1338.

(9)

The definition of “units” was amended by S.I. 2013/1388.

(10)

Regulation 7(2) was substituted by S.I. 2016/225.

(11)

Regulation 8(1) was amended by S.I. 2012/2015 and S.I. 2013/1388.

(12)

Paragraph 20B of Schedule 3 was inserted by S.I. 2011/1613; amended by Schedule 4 to the Financial Services Act 2012 and S.I. 2013/1773.

(13)

Paragraph 5 was amended by S.I. 2013/472.

(14)

Regulations 15B-15I were inserted by S.I. 2016/225.