PART 2Amendments of the Financial Services and Markets Act 2000
Introductory provisionI13
The 2000 Act is amended in accordance with this Part.
Persons authorised as a result of Schedule 5I24
For section 36 substitute—
36Authorised open-ended investment companies
Schedule 5 makes provision about authorised open-ended investment companies.
Open-ended investment companiesI35
In section 236 (open-ended investment companies), in subsection (4)—
a
omit paragraph (c) (but not the “or” at the end);
b
in paragraph (d), omit “other than an EEA state”.
Meaning of “UCITS”I46
After section 236 insert—
236AMeaning of “UCITS”
1
For the purposes of this Act, and subject to subsection (4), “UCITS” means an undertaking established in the United Kingdom or an EEA State—
a
with the sole object of collective investment, operating on the principle of risk-spreading, in transferable securities or other liquid financial assets mentioned in subsection (3), of capital raised from the public; and
b
with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of the undertaking's assets.
2
A UCITS may consist of several sub-funds (see section 237(4)).
3
The transferable securities or other liquid financial assets referred to in subsection (1)(a) are—
a
in the case of an undertaking established in the United Kingdom, those permitted by section 2 of chapter 5 of the Collective Investment Schemes sourcebook M1; or
b
in the case of an undertaking established in an EEA State, those referred to in Article 50(1) of the UCITS directive M2.
4
For the purposes of subsection (1)(b), action taken by the undertaking to ensure that the price of its units on an investment exchange does not significantly vary from their net asset value is to be regarded as equivalent to the repurchase or redemption of units at the request of holders.
5
An undertaking is not a UCITS if it is any of the following—
a
a collective investment undertaking of the closed-ended type;
b
a collective investment undertaking which raises capital without promoting the sale of its units to the public within the relevant area or any part of it;
c
an open-ended investment company, or other collective investment undertaking, the units of which may, under its fund rules or instruments of incorporation, be sold only to the public in countries or territories outside the relevant area.
6
In subsection (5) “the relevant area” means—
a
in the case of an undertaking established in the United Kingdom, the United Kingdom;
b
in the case of an undertaking established in an EEA State, the EEA States.
Other definitions for Part 17I57
1
Section 237 (other definitions for Part 17) is amended as follows.
2
In subsection (2)—
a
for the definition of “management company” substitute—
“management company” means an undertaking, as defined in section 1161 of the Companies Act 2006 M3, whose regular business is the management of UK UCITS;
b
in the definition of “the operator”M4—
i
at the end of paragraph (ab), insert “
and
”
;
ii
omit the “and” at the end of paragraph (b);
iii
omit paragraph (c).
3
In subsection (3)—
a
after the definition of “an authorised open-ended investment company”M5 insert—
“the Collective Investment Schemes sourcebook” means the Collective Investment Schemes sourcebook made under this Act by the FCA, as it has effect on F1IP completion day;
“EEA UCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State;
b
for the definition of “feeder UCITS”M6 substitute—
“feeder UCITS” means—
a
a UK UCITS which has been approved by the FCA to invest 85% or more of the total property which is subject to the collective investment scheme constituted by the UK UCITS in units of—
i
another UK UCITS,
ii
a sub-fund of another UK UCITS,
iii
an EEA UCITS, or
iv
a sub-fund of an EEA UCITS, or
b
a sub-fund of a UK UCITS which has been approved by the FCA to invest 85% or more of the sub-fund's separate pool of the property of the UK UCITS in units of—
i
another UK UCITS,
ii
another sub-fund of a UK UCITS,
iii
an EEA UCITS, or
iv
a sub-fund of an EEA UCITS;
“master UCITS”, in relation to a feeder UCITS, means (as the case may be)—
a
the other UK UCITS mentioned in paragraph (a)(i) or (b)(i) of the definition of “feeder UCITS”,
b
the EEA UCITS mentioned in paragraph (a)(iii) or (b)(iii) of that definition, or
c
the sub-fund mentioned in paragraph (a)(ii) or (iv) or (b)(ii) or (iv) of that definition;
c
in the definition of “a recognised scheme”M7, omit “264 or”;
d
before the definition of “UK UCITS” insert—
“UCITS-related direct EU legislation” means—
a
Commission Regulation (EU) 2010/583 of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament and of the Council as regards key investor information and conditions to be met when providing key investor information or the prospectus in a durable medium other than paper or by means of a website, or
b
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;
Authorisation orders: unit trust schemesI68
1
Section 243 (authorisation orders) is amended as follows.
2
In subsection (5) M8—
a
omit “or another EEA State”;
b
for “country in which it is incorporated” substitute “
United Kingdom
”
.
3
For subsection (5A) substitute—
5A
The manager and the trustee must each have a place of business in the United Kingdom.
4
Omit subsection (6).
Certificates: unit trust schemesI79
In section 246 (certificates), in subsection (1) M9, for the words from “enjoy” to “instrument” substitute “
be a UK UCITS
”
.
Proposal to convert to a non-feeder UCITS: unit trust schemesI810
1
Section 252A M10 (proposal to convert to a non-feeder UCITS) is amended as follows.
2
In subsection (1)(b), after “convert into a” insert “
UK
”
.
3
In subsection (7)(a), after “convert into a” insert “
UK
”
.
4
In subsection (9), for paragraphs (a) and (b) substitute—
a
specified in rule 11.6.3(2) of the Collective Investment Schemes sourcebook, or
b
specified in UCITS-related direct EU legislation.
Requests for revocation of authorisation order: unit trust schemesI911
In section 256 M11 (requests for revocation of authorisation order), in subsection (3)(b), omit “or would be incompatible with an EU obligation”.
Directions: unit trust schemesI1012
In section 257 M12 (directions), in subsection (1)(b)—
a
in sub-paragraph (ii), for the words from “any” to “UCITS directive” substitute “
UCITS-related direct EU legislation;
”
;
b
in sub-paragraph (iii), after “that Regulation” insert “
which constitutes retained direct EU legislation
”
.
Winding up or merger of master UCITS: unit trust schemesI1113
1
Section 258A M13 (winding up or merger of master UCITS) is amended as follows.
2
In subsection (2)(b), after “convert into a” insert “
UK
”
.
3
In subsection (4)(b), after “convert into a” insert “
UK
”
.
Information for home state regulator: unit trust schemesI1214
Omit section 261A M14 (information for home state regulator).
Information for feeder UCITS: unit trust schemesI1315
1
Section 261B M15 (information for feeder UCITS) is amended as follows.
2
In subsection (1)(a), after “made” insert “
by or under any enactment
”
.
3
Omit subsections (2) and (3).
Authorisation orders: contractual schemesI1416
1
Section 261D M16 (authorisation orders) is amended as follows.
2
In subsection (5)—
a
omit “or another EEA State”;
b
for “country in which it is incorporated” substitute “
United Kingdom
”
.
3
For subsection (6) substitute—
6
The operator and the depositary must each have a place of business in the United Kingdom.
4
Omit subsection (7).
Authorisation orders: holding of unitsI1517
In section 261E M17 (authorisation orders: holding of units), in the definition of “professional investor” in subsection (4), for “(1) to (4) of Section I of Annex II to the markets in financial instruments directive (professional clients for the purpose of that directive)” substitute “
(a) to (d) of paragraph 3 of Schedule 1 to the markets in financial instruments regulation
”
M18
.
Certificates: contractual schemesI1618
In section 261H M19 (certificates), in subsection (1), for “enjoy the rights conferred by any relevant EU instrument” substitute “
be a UK UCITS
”
.
Proposal to convert to a non-feeder UCITS: contractual schemesI1719
1
Section 261S M20 (proposal to convert to a non-feeder UCITS) is amended as follows.
2
In subsection (1)(b), after “convert into a” insert “
UK
”
.
3
In subsection (7)(a), after “convert into a” insert “
UK
”
.
4
In subsection (9), for paragraphs (a) and (b) substitute—
a
specified in rule 11.6.3(2) of the Collective Investment Schemes sourcebook, or
b
specified in UCITS-related direct EU legislation.
Requests for revocation of authorisation order: contractual schemesI1820
In section 261W M21 (requests for revocation of authorisation order), in subsection (3)(b), omit “or would be incompatible with an EU obligation”.
Directions: contractual schemesI1921
In section 261X M22(directions), in subsection (1)(b)—
a
in sub-paragraph (ii), for the words from “any” to “UCITS directive” substitute “
UCITS-related direct EU legislation;
”
;
b
in sub-paragraph (iii), after “that Regulation” insert “
which constitutes retained direct EU legislation
”
.
Winding up or merger of master UCITS: contractual schemesI2022
1
Section 261Z M23 (winding up or merger of master UCITS) is amended as follows.
2
In subsection (2)(b), after “convert into a” insert “
UK
”
.
3
In subsection (4)(b), after “convert into a” insert “
UK
”
.
Information for home state regulator: contractual schemesI2123
Omit section 261Z4 M24 (information for home state regulator).
Information for feeder UCITS: contractual schemesI2224
1
Section 261Z5 M25 (information for feeder UCITS) is amended as follows.
2
In subsection (1)(a), after “made” insert “
by or under any enactment
”
.
3
Omit subsections (2) and (3).
Schemes constituted in other EEA StatesI2325
Omit sections 264 to 269 (schemes constituted in other EEA States).
Individually recognised overseas schemesI2426
In section 272 (individually recognised overseas schemes), in subsection (1)—
a
at the end of paragraph (a) insert “
and
”
;
b
omit paragraph (b) and the “and” immediately following it.
Master-feeder structuresI2527
1
Section 283A M26 (master-feeder structures) is amended as follows.
2
In subsection (1), for the words from “rules made” to “directive” substitute “
rule 5.2.11(9) of the Collective Investment Schemes sourcebook
”
.
3
In subsection (3)(a)—
a
for “that the UCITS” substitute “
that the UK UCITS
”
;
b
in sub-paragraph (i) for “Chapter VIII of the UCITS directive,” substitute “
the Chapter 8 provisions,
”
.
4
After subsection (3) insert—
3A
In subsection (3)(a)(i) “the Chapter 8 provisions” means—
a
in relation to a UK UCITS or its operator, trustee or depositary, or auditor, any provision made by or under an enactment in implementation of Chapter 8 of the UCITS directive, and
b
in relation to an EEA UCITS or its operator, Chapter 8 of the UCITS directive.
Reports on derivative instrumentsI2628
1
Section 283B M27 (reports on derivative instruments) is amended as follows.
2
In subsection (1), after “in relation to a” insert “
UK
”
.
3
In subsection (4), for paragraphs (a) and (b) substitute—
a
in rules 6.12.3 and 6.12.3A, and annex 2R to chapter 6, of the Collective Investment Schemes sourcebook, or
b
in UCITS-related direct EU legislation.
FCA's and PRA's proceduresI2729
In section 395 (procedures of the FCA and PRA), omit subsection (13)(e).
DefinitionsI2830
In section 417 (definitions), in subsection (1), in the definition of “UCITS”M28, for “Article 1.2 of the UCITS directive” substitute “
section 236A
”
.
Expressions relating to authorisation elsewhere in the single marketI2931
In section 425 (expressions relating to authorisation elsewhere in the single market), in subsection (1), omit paragraph (aa) (but not the “and” at the end).
Persons concerned in collective investment schemesI3032
1
Schedule 5 (persons concerned in collective investment schemes) is amended as follows.
2
In paragraph 1 M29—
a
omit sub-paragraphs (1) and (2), and
b
in sub-paragraph (4), for paragraph (b) substitute—
b
which is a UCITS as defined in section 236A,
3
In paragraph 2, omit sub-paragraph (1).