The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003

PART 2 Passport Rights of Management Companies

General

2.—(1) For paragraph (a) of subsection (1) of section 425 of the Act (definitions in relation to the single market directives)(1), substitute—

“(a) “banking consolidation directive”, “EEA authorisation”, “EEA firm”, “EEA right”, “EEA State”, “first life insurance directive”, “first non-life insurance directive”, “insurance directives”, “insurance mediation directive”, “investment services directive”, “single market directives” and “UCITS directive” have the meaning given in Schedule 3; and”.

(2) In Part 1 of Schedule 3 to the Act (EEA passport rights—defined terms)(2)—

(a) in paragraph 1 (the single market directives)—

(i) at the end of sub-paragraph (d), omit “and”; and

(ii) at the end of sub-paragraph (e), insert—

“; and

(f) the UCITS directive.”;

(b) after paragraph 4A, insert—

“The UCITS directive

4B.   “The UCITS directive” means the Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No. 85/611/EEC).”(3);

(c) in paragraph 5 (EEA firm)—

(i) at the end of sub-paragraph (d), omit “or”; and

(ii) at the end of sub-paragraph (e), insert—

“; or

(f) a management company (as defined in Article 1a.2 of the UCITS directive) which is authorised (within the meaning of Article 5) by its home state regulator.”.

(3) In regulation 1(2) (interpretation) of the Passport Rights Regulations, after the definition of the “ISD Regulations”, insert—

““management company” means an EEA firm falling within paragraph 5(f) of Schedule 3;”.

Passporting by EEA management companies

3.—(1) In Part 2 of Schedule 3 to the Act (exercise of passport rights by EEA firms)(4)—

(a) in paragraph 13 (establishment), in sub-paragraph (1), for “(c) or (d)”, substitute “(c), (d) or (f)”;

(b) in paragraph 14 (services), in sub-paragraph (1)(b), for “(d) or (e)”, substitute “(d), (e) or (f)”; and

(c) in paragraph 15 (grant of permission), after sub-paragraph (1), insert—

“(1A) Sub-paragraph (1) is to be read subject to paragraph 15A(3).”;

(d) after paragraph 15, insert—

“Power to restrict permission of management companies

15A.— (1) Sub-paragraph (2) applies if—

(a) a firm falling within paragraph 5(f) qualifies for authorisation as a result of paragraph 12(1) (establishment conditions satisfied); but

(b) the Authority determines that the way in which the firm intends to invite persons in the United Kingdom to become participants in any collective investment scheme which that firm manages does not comply with the law in force in the United Kingdom.

(2) The Authority may give a notice to the firm and the firm’s home state regulator of the Authority’s determination under sub-paragraph (1)(b).

(3) Paragraph 15(1) does not give a firm to which the Authority has given (and not withdrawn) a notice under sub-paragraph (2) permission to carry on through the firm’s United Kingdom branch the regulated activity of dealing in units in the collective investment schemes which the firm manages.

(4) Any notice given under sub-paragraph (2) must be given before the end of the period of two months beginning with the day on which the Authority received the consent notice.

(5) Sections 264(4) and 265(1), (2) and (4) apply to a notice given under sub-paragraph (2) as they apply to a notice given by the Authority under section 264(2).

(6) If a decision notice is given to the firm under section 265(4), by virtue of sub-paragraph (5), the firm may refer the matter to the Tribunal.

(7) In sub-paragraph (3)—

(a) “units” has the meaning given by section 237(2); and

(b) the reference to “dealing in” units in a collective investment scheme must be read with—

(i) section 22;

(ii) any relevant order under that section; and

(iii) Schedule 2.”.

(2) In the Passport Rights Regulations—

(a) in regulation 2 (establishment of a branch: contents of consent notice), after paragraph (2), insert—

“(2A) In the case of a management company, the prescribed information is—

(a) a statement that the firm is a management company;

(b) the requisite details of the branch; and

(c) details of any compensation scheme which is intended to protect the branch’s investors.”;

(b) in regulation 3 (provision of services: contents of regulator’s notice), after paragraph (2), insert—

“(2A) In the case of a management company, the prescribed information is—

(a) a statement that the firm is a management company;

(b) particulars of the programme of operations to be carried on in the United Kingdom including a description of the particular EEA activities to be carried on; and

(c) details of any compensation scheme which is intended to protect investors.”;

(c) in regulation 4 (investment firms, credit institutions and financial institutions: changes to branch details)—

(i) in the heading, after “Investment firms”, insert “, management companies”;

(ii) in paragraphs (1) and (6), after “investment firm”, insert “, management company”;

(d) in regulation 5 (investment firms; changes to services)—

(i) in the heading, after “Investment firms”, insert “and management companies”;

(ii) after paragraph (1), insert—

“(1A) A management company which is providing services in the United Kingdom in the exercise of an EEA right must not make a change in any of the matters referred to in regulation 3(2A)(b), unless the relevant requirements have been complied with.”; and

(iii) in paragraph (4), after “investment firm”, insert “or a management company”.

Passporting by UK management companies

4.—(1) In Part 3 of Schedule 3 to the Act (exercise of passport rights by UK firms)—

(a) in paragraph 19 (exercise of rights to establish a branch)—

(i) in sub-paragraph (6), for “the investment services directive or the banking consolidation directive”, substitute “the banking consolidation directive, the investment services directive or the UCITS directive”;

(ii) in sub-paragraph (12)(a), for “within three months beginning with the date when it received the notice of intention”, substitute “within the relevant period”;

(iii) after sub-paragraph (12), insert—

“(12A) In sub-paragraph (12), “the relevant period” means—

(a) if the firm’s EEA right derives from the UCITS directive, two months beginning with the date on which the Authority received the notice of intention;

(b) in any other case, three months beginning with that date.”; and

(b) in paragraph 20 (exercise of rights to provide services), in sub-paragraph (3)—

(i) for “the investment services directive or the banking consolidation directive”, substitute “the banking consolidation directive, the investment services directive or the UCITS directive”;

(ii) after “host state regulator”, insert “with such other information as may be specified”.

(2) In the Passport Rights Regulations—

(a) in regulation 11 (UK investment firms, credit institutions and financial institutions: changes to branch details)—

(i) in the heading, after “investment firms”, insert “, management companies”; and

(ii) in paragraph (1), after “investment services directive”, insert “, the UCITS directive”; and

(b) in regulation 12 (UK investment firms: changes to services)—

(i) in the heading, after “investment firms”, insert “and management companies”; and

(ii) in paragraph (1), after “investment services directive”, insert “or the UCITS directive”.

(1)

Amended by S.I. 2000/2952 and S.I. 2003/1473.

(2)

Amended by S.I. 2000/2952, S.I. 2001/1376 and S.I. 2003/1473.

(3)

OJ L375, 31.12.85, p. 3; amended by Council Directive 88/220/EEC, European Parliament and Council Directive 95/26/EC, European Parliament and Council Directive 2001/107/EC and European Parliament and Council Directive 2001/108/EC.

(4)

Amended by S.I. 2003/1473.