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18.—(1) Omit Article 44.
(2) For Article 45 substitute—
1. Any power to make regulations conferred on the Treasury by this Regulation is exercisable by statutory instrument.
2. Such regulations may—
(a)contain incidental, supplemental, consequential and transitional provision; and
(b)make different provision for different purposes.
3. A statutory instrument containing regulations made under this Regulation is subject to annulment in pursuance of a resolution of either House of Parliament.”.
(3) Article 46 is omitted.
(4) In the words following Article 47, omit “This Regulation shall be binding in its entirety and directly applicable in all Member States.”.
(5) After Article 47, insert—
Article 16
1. An MMF which is a UCITS may acquire the units of UCITS or other collective investment undertakings referred to in paragraph 4, provided that no more than 20% of its assets are invested in units of a single UCITS or other collective investment undertaking.
2.—(1) Investments made in units of collective investment undertakings other than UCITS shall not exceed, in aggregate, 30% of the assets of the UCITS.
(2) The assets of the respective UCITS or other collective investment undertakings are not required to be combined for the purposes of the limits laid down in rule 5.2.11 of the Collective Investment Schemes sourcebook.
3.—(1) Where a UCITS invests in the units of other UCITS or collective investment undertakings that are managed, directly or by delegation, by the same management company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding, that management company or other company shall not charge subscription or redemption fees on account of the UCITS’ investment in the units of such other UCITS or collective investment undertakings.
(2) A UCITS that invests a substantial proportion of its assets in other UCITS or collective investment undertakings shall disclose in its prospectus the maximum level of the management fees that may be charged both to the UCITS itself and to the other UCITS or collective investment undertakings in which it intends to invest. It shall indicate in its annual report the maximum proportion of management fees charged both to the UCITS itself and to the other UCITS or collective investment undertaking in which it invests.
4. Investments made by a UCITS may include units of UCITS or other collective investment schemes, whether or not established in the United Kingdom, provided that—
(a)such other collective investment undertakings are authorised under laws which provide that they are subject to supervision considered by the FCA to be equivalent to that provided for by the law of the United Kingdom, and that cooperation between authorities is sufficiently ensured;
(b)the level of protection for unit-holders in the other collective investment undertakings is equivalent to that provided for unit-holders in a UCITS, and in particular that the rules on asset segregation, borrowing, lending, and uncovered sales of transferable securities and money market instruments are equivalent to the requirements of the law of the United Kingdom relating to UCITS;
(c)the business of the other collective investment undertakings is reported in half-yearly and annual reports to enable an assessment to be made of the assets and liabilities, income and operations over the reporting period; and
(d)no more than 10% of the assets of the UCITS or of the other collective investment undertakings, whose acquisition is contemplated, can, according to their fund rules or instruments of incorporation, be invested in aggregate in units of other UCITS or other collective investment undertakings.”
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