“Depositaries of UCITS and AIFs42A.

A person does not carry on an activity of the kind specified by article 40 if the person carries on the activity in relation to—

(a)

a UCITS, and the person has a Part 4A permission to carry on the activity specified in article 51ZB in respect of that UCITS; or

(b)

an AIF, and the person has a Part 4A permission to carry on the activity specified in article 51ZD in respect of that AIF.”.

“Managing a UCITS51ZA.

(1)

Managing a UCITS is a specified kind of activity.

(2)

A person manages a UCITS when the person carries on collective portfolio management of the UCITS within the meaning of the UCITS directive, which includes the functions referred to in Annex 2 to that directive (the text of which is set out in Schedule 6) in relation to a UCITS.

(3)

If a person manages a UCITS and also carries on other activities in connection with or for the purposes of the management of that UCITS, such other activities are also included in the activity specified in paragraph (1).

Acting as trustee or depositary of a UCITS51ZB.

(1)

Acting as—

(a)

the trustee of an authorised unit trust scheme, or

(b)

the depositary of an open-ended investment company or authorised contractual scheme,

where the scheme or company is a UCITS, is a specified kind of activity.

(2)

In paragraph (1), “authorised contractual scheme”, “authorised unit trust scheme”, “trustee” and “depositary” have the meanings given by section 237 of the Act (other definitions).

Managing an AIF51ZC.

(1)

Managing an AIF is a specified kind of activity.

(2)

A person manages an AIF when the person performs at least risk management or portfolio management for the AIF.

(3)

A person does not manage an AIF if the functions they perform for the AIF have been delegated to it by another person, provided that such other person is not an AIFM that has delegated such functions to the extent that it is a letter-box entity.

(4)

Paragraph (5) applies if a person manages an AIF, and also carries on—

(a)

one or more of the additional activities listed in paragraph 2 of Annex 1 to the alternative investment fund managers directive (the text of which is set out in Schedule 7) for that AIF; or

(b)

one or more other activities in connection with or for the purposes of the management of that AIF.

(5)

The additional or other activities are included in the activity specified in paragraph (1).

(6)

Any expression used in this article which is not defined in this Order and is used in the alternative investment fund managers directive has the same meaning as in that directive.

Acting as trustee or depositary of an AIF51ZD.

(1)

Acting as—

(a)

the depositary of an AIF falling within paragraph (2),

(b)

the trustee of an authorised unit trust scheme which is an AIF that does not fall within paragraph (2), or

(c)

the depositary of an open-ended investment company or authorised contractual scheme which is an AIF that does not fall within paragraph (2),

is a specified kind of activity.

(2)

An AIF falls within this paragraph if it is—

(a)

an AIF managed by a full-scope UK AIFM; or

(b)

a UK AIF managed by an EEA AIFM.

(3)

In paragraph (1)(a) “depositary” means—

(a)

a person appointed in compliance with the requirement for the AIFM to appoint a depositary at Article 21.1 of the alternative investment fund managers directive; or

(b)

an Article 36 custodian as defined in regulation 57(5)(a) of the Alternative Investment Fund Managers Regulations 2013.

(4)

In paragraph (1)(b) “authorised unit trust scheme” and “trustee” have the meanings given by section 237 of the Act.

(5)

In paragraph (1)(c) “authorised contractual scheme” and “depositary” have the meanings given by section 237 of the Act.

(6)

Until 22nd July 2017, an AIF also falls within paragraph (2) if the FCA or an authority in another EEA State has permitted a person with its registered office or a branch in the United Kingdom to be appointed as a depositary of the AIF in accordance with Article 61.5 of the alternative investment fund managers directive.

Establishing etc. a collective investment scheme51ZE.

Establishing, operating or winding up a collective investment scheme is a specified kind of activity.

Exclusions

Persons excluded from managing an AIF51ZF.

There is excluded from article 51ZC the activity of managing an AIF if the person carrying on the activity is listed or described in Schedule 8.

Operating a collective investment scheme in relation to a UCITS or an AIF51ZG.

(1)

A person does not carry on an activity of the kind specified by article 51ZE if the person carries on the activity—

(a)

in relation to a UCITS, and—

(i)

at the time the person carries on the activity, the UCITS is managed by a person with a Part 4A permission to carry on the activity specified by article 51ZA in respect of that UCITS; or

(ii)

no more than the permitted period has passed since the UCITS was managed by a person with such a Part 4A permission; or

(b)

in relation to an AIF, and—

(i)

at the time the person carries on the activity, the AIF is managed by—

(aa)

a person with a Part 4A permission to carry on the activity specified by article 51ZC in respect of that AIF; or

(bb)

a person registered as a small registered UK AIFM because the conditions in regulation 10(4) of the Alternative Investment Fund Managers Regulations 2013 are met in respect of that AIF; or

(ii)

no more than the permitted period has passed since the AIF was managed by a person with such a Part 4A permission or registration.

(2)

In this article “the permitted period” means a period calculated as follows—

(a)

subject to sub-paragraphs (b) and (c), the period is 30 days;

(b)

if, before the end of the period, the FCA receives notice of the action being taken to appoint a person with a Part 4A permission or registration to manage the UCITS or AIF, the period is extended by a further 30 days, and may be so extended a second time;

(c)

if, before the end of the period calculated in accordance with sub-paragraphs (a) and (b), the FCA receives notice of a proposal in respect of the UCITS or AIF for a new manager under section 251(3) of the Act, a new operator under section 261Q(5) of the Act or a new director under regulation 21(1)(e) of the Open-Ended Investment Company Regulations 2001, the period is further extended until the earlier of—

(i)

the date on which the FCA gives written notice of its approval to the proposal;

(ii)

the date on which the FCA gives a decision notice refusing the proposal; or

(iii)

one month after the date on which notice of the proposal was given.”.

“Managers of UCITS and AIFs72AA.

(1)

This article applies to a person with a Part 4A permission to carry on the activity of the kind specified by article 51ZA or 51ZC.

(2)

Activities carried on by the person in connection with or for the purposes of managing a UCITS or, as the case may be, managing an AIF, are excluded from the activities specified by this Part, other than the activities mentioned in paragraph (1).”.

“SCHEDULE 6FUNCTIONS INCLUDED IN THE ACTIVITY OF MANAGING A UCITS: ANNEX II TO THE UCITS DIRECTIVE

Article 51ZA

1.

Investment management.

2.

Administration—

(a)

legal and fund management accounting services;

(b)

customer inquiries;

(c)

valuation and pricing (including tax returns);

(d)

regulatory compliance monitoring;

(e)

maintenance of unit-holder register;

(f)

distribution of income;

(g)

unit issues and redemptions;

(h)

contract settlements (including certificate dispatch);

(i)

record keeping.

3.

Marketing.

SCHEDULE 7ADDITIONAL ACTIVITIES INCLUDED IN THE ACTIVITY OF MANAGING AN AIF LISTED IN PARAGRAPH 2 OF ANNEX I TO THE ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE

Article 51ZC

(a)

Administration—

(i)

legal and fund management accounting services;

(ii)

customer inquiries;

(iii)

valuation and pricing, including tax returns;

(iv)

regulatory compliance monitoring;

(v)

maintenance of unit-/shareholder register;

(vi)

distribution of income;

(vii)

unit/shares issues and redemptions;

(viii)

contract settlements, including certificate dispatch;

(ix)

record keeping:

(b)

Marketing;

(c)

Activities related to the assets of AIFs, namely services necessary to meet the fiduciary duties of the AIFM, facilities management, real estate administration activities, advice to undertakings on capital structure, industrial strategy and related matters, advice and services related to mergers and the purchase of undertakings and other services connected to the management of the AIF and the companies and other assets in which it has invested.

SCHEDULE 8PERSONS EXCLUDED FROM REGULATED ACTIVITY OF MANAGING AN AIF

Article 51ZF

Interpretation of this Schedule

1.

Any expression used in this Schedule which is used in the alternative investment fund managers directive has the same meaning as in that directive.

Persons excluded

2.

A small registered UK AIFM, in respect of the AIFs managed by it by virtue of which it is entitled to be registered as a small registered UK AIFM (but not in respect of any other AIFs managed by it).

3.

An AIFM in so far as it manages one or more AIFs whose only investors are—

(a)

the AIFM,

(b)

the parent undertakings of the AIFM,

(c)

the subsidiaries of the AIFM, or

(d)

other subsidiaries of those parent undertakings,

provided that none of the investors is an AIF.

4.

An institution for occupational retirement provision which falls within the scope of Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision M22, including, where applicable, the authorised entities responsible for managing such institutions and acting on their behalf referred to in Article 2.1 of that directive, or the investment managers appointed pursuant to Article 19.1 of that directive, in so far as they do not manage AIFs.

5.

The European Central Bank, the European Investment Bank, the European Investment Fund, a bilateral development bank, the World Bank, the International Monetary Fund, any other supranational institution or similar international organisation, or a European Development Finance Institution, in the event that such institution or organisation manages AIFs and in so far as those AIFs act in the public interest.

6.

A national central bank.

7.

A national, regional or local government or body or other institution which manages funds supporting social security and pension systems.

8.

A holding company.

9.

An employee participation scheme or employee savings scheme.

10.

A securitisation special purpose entity.

11.

An AIFM, the registered office of which is not in an EEA State.”.

“(ga)

article 51ZA (managing a UCITS);

(gb)

article 51ZB (acting as a trustee or depositary of a UCITS);

(gc)

article 51ZC (managing an AIF);

(gd)

article 51ZD (acting as a trustee or depositary of an AIF);

(ge)

article 51ZE (establishing etc. a collective investment scheme);”.

““authorised contractual scheme” has the meaning given at section 237(3) of the Act;”;

““authorised open-ended investment company” has the meaning given at section 237(3) of the Act;”;

““authorised unit trust scheme” has the meaning given at section 237(3) of the Act;”;

““relevant AIFM” means an EEA firm falling within paragraph 5(h) of Schedule 3 to the Act which—

1. (a)

   is authorised by its home state regulator to provide services specified by Annex I to the alternative investment fund managers directive; and

2. (b)

   is providing those services, or services specified by Article 6.4 of that directive (discretionary portfolio management and non-core services), in the United Kingdom;”;

““UK AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.”.

“(ga)

articles 47.2, 47.3, 51, 52 and 53.2 of the alternative investment fund managers directive;”.

“(b)

that UK authorised person has a Part 4A permission to carry on the regulated activity of managing a UCITS”.

“(6)

In the case of an EEA AIFM, the prescribed information is—

(a)

a statement that the firm is an EEA AIFM;

(b)

the identity of the AIFs that the EEA AIFM intends to manage;

(c)

the organisational structure of the branch;

(d)

the address in the home state of each AIF that the EEA AIFM intends to manage from which documents relating to that AIF may be obtained;

(e)

the names and contact details of the persons responsible for the management of the branch.

(7)

In paragraph (6) “home state” in relation to an AIF means—

(a)

the EEA State in which the AIF is authorised or registered, or in the case of multiple authorisations or registrations, the EEA State in which the AIF was first authorised or registered; or

(b)

if the AIF is not authorised or registered in an EEA State, the EEA State in which it has its registered office or head office.”.

“(5)

In the case of an EEA AIFM, the prescribed information is—

(a)

a statement that the firm is an EEA AIFM;

(b)

if the EEA AIFM wishes to manage an AIF in the United Kingdom—

(i)

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

(ii)

the identity of the AIFs that the EEA AIFM intends to manage; and

(c)

if the EEA AIFM wishes to market an AIF in the United Kingdom—

(i)

the documents and information set out in Annex IV to the alternative investment fund managers directive; and

(ii)

a statement to the effect that the AIFM concerned is authorised to manage AIFs with a particular management strategy.”.

“EEA AIFM: changes to branch details or services7A.

(1)

An EEA AIFM which is exercising an EEA right in the United Kingdom deriving from the alternative investment fund managers directive must not make a material change to any of the matters referred to in regulation 2(6)(b) to (e) or 3(5)(b) or (c) unless the relevant requirement has been complied with.

(2)

Where the relevant requirement has been complied with, the EEA AIFM's permission is to be treated as varied accordingly.

(3)

For the purposes of this regulation, the “relevant requirement” is that the home state regulator has informed the appropriate UK regulator that it has approved the proposed change.

(4)

In this regulation “the appropriate UK regulator” has the same meaning as in paragraph 14 of Schedule 3.”.

“Full-scope UK AIFM: changes to branch details or services17A.

(1)

A full-scope UK AIFM which has exercised an EEA right, deriving from the alternative investment fund managers directive, to establish a branch must not change any of the matters referred to in regulation 2(6)(b) to (e) unless the relevant requirements have been complied with.

(2)

A full-scope UK AIFM which is providing services in exercise of an EEA right deriving from the alternative investment fund managers directive, other than the EEA right to market an AIF, must not change—

(a)

the programme of operations, or the EEA activities, to be carried out in exercise of that right,

(b)

the EEA States, other than the United Kingdom, in which it manages AIFs, or

(c)

the identity of the AIFs it manages in those States,

unless the relevant requirements have been complied with.

(3)

A full-scope UK AIFM which is marketing an AIF in exercise of an EEA right deriving from the alternative investment fund managers directive, must not make a material change to any of the following matters, unless the relevant requirements have been complied with—

(a)

the programme of operations identifying the AIF the AIFM intends to market and information on where the AIF is established;

(b)

the AIF rules or instruments of incorporation;

(c)

identification of the depositary of the AIF;

(d)

the description of, or any information on, the AIF available to investors;

(e)

where the master AIF is established, if the AIF is a feeder AIF;

(f)

any additional information referred to in Article 23.1 of the alternative investment fund managers directive, for each AIF the AIFM intends to market;

(g)

the EEA States, other than the United Kingdom, in which the AIFM intends to market the units or shares of the AIF to professional investors;

(h)

information about arrangements made for the marketing of the AIF and, where relevant, arrangements established to prevent the AIF from being marketed to retail investors, including in the case where the AIFM relies on the activities of independent entities to provide investment services in respect of the AIF.

(4)

For the purposes of this regulation, the “relevant requirements” in the case of a planned change are that—

(a)

the AIFM has given written notice of the change to the appropriate UK regulator at least one month before implementing the change; and

(b)

either—

(i)

the appropriate UK regulator has consented to the change; or

(ii)

the appropriate UK regulator has not objected to the change in the period of one month beginning on the day on which the firm gave notice.

(5)

For the purposes of this regulation, the “relevant requirements” in the case of an unplanned change are that—

(a)

the AIFM has given written notice of the change to the appropriate UK regulator as soon as reasonably practicable and, at the latest, immediately after an unplanned change has occurred; and

(b)

the appropriate UK regulator has not objected to the change.

(6)

If a planned change would mean the AIFM no longer complied with an implementing provision, the appropriate UK regulator must inform the AIFM without undue delay that—

(a)

the FCA objects to the change; and

(b)

the AIFM must not implement the change.

(7)

If—

(a)

a planned change is implemented, or

(b)

an unplanned change takes place,

as a result of which the AIFM no longer complies with an implementing provision, the appropriate UK regulator must take steps to ensure that the AIFM complies with that provision or ceases to exercise the EEA right.

(8)

If a change notified under paragraph (4)(a) or (5)(a) does not affect compliance with an implementing provision, the appropriate UK regulator must—

(a)

give a notice to the host state regulator informing it of the change; and

(b)

inform the firm that it has given the notice, stating the date on which it did so.

(9)

If the appropriate UK regulator objects to a change under paragraph (6), takes steps under paragraph (7) or refuses to give notice to the host state regulator under paragraph (8)—

(a)

the AIFM may refer the matter to the Tribunal; and

(b)

the appropriate UK regulator must give notice to the AIFM of the reasons for its decision to object, to take such steps or to refuse to give such notice.

(10)

In this regulation—

“depositary” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;

“feeder AIF” has the meaning given in Article 4.1(m) of the alternative investment fund managers directive;

“implementing provision” means a provision implementing the alternative investment fund managers directive or a provision of any directly applicable EU regulation made under that directive;

“master AIF” has the meaning given in Article 4.1(y) of that directive;

“retail investor” has the meaning given in Article 4.1(aj) of that directive.”.

““alternative investment fund manager” means—

1. (a)

   any EEA firm falling within paragraph 5(h) of Schedule 3 to the Act M40; or

2. (b)

   any UK firm whose EEA right derives from the alternative investment fund managers directive”.

“(6)

Where a regulator has, for the purposes of Article 30a of the conglomerates directive (alternative investment fund managers), included an alternative investment fund manager in the scope of supervision of a credit institution in a third-country group, each reference in this regulation to a “credit institution” is to be treated as including a reference to that alternative investment fund manager.”.

“(7)

Where a regulator has, for the purposes of Article 30a of the conglomerates directive, included an alternative investment fund manager in the scope of supervision of—

(a)

credit institutions and investment firms in a third-country group; or

(b)

investment firms in a third-country group,

each reference in this regulation to an “investment firm” is to be treated as including a reference to that alternative investment fund manager.”.

““EuSEF Regulation” means Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds;

“EuVECA Regulation” means Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds;”.