Paragraph 2 Amendments to the principal regulations

The principal regulations are amended as follows.

In regulation 2(1) (interpretation)—

At the end of regulation 2 insert—

“(4)

Any reference in these Regulations to cancellation of a Part 4A permission to carry on the regulated activity of managing an AIF includes reference to the variation of a Part 4A permission to remove the regulated activity of managing an AIF from those activities to which the permission relates.”.

In regulation 5 (applications for Part 4A permission)—

After regulation 5 insert—

“Applications by AIFMs from third countries

5A

F10(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

In the case of an applicant for Part 4A permission whose registered office is in a third country, the regulator must not give the Part 4A permission unless, in addition to the conditions specified in regulation 5(3) being met—

F11(a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

the applicant has appointed a legal representative who—

(i)

is the point of contact for the FCAF12... and investors in relation to the AIFs managed or to be managed by the applicant;

(ii)

is sufficiently equipped to perform the compliance function F13pursuant to the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of EU retained law in relation to those AIFs; and

(iii)

if an individual, is domiciled in the United Kingdom, or if not an individual, has a registered office or a branch in the United Kingdom;

F14(c)

appropriate co-operation arrangements are in place between the FCA, the competent authority in relation to any EEA AIF managed by the applicant and the supervisory authorities of the third country in which the applicant has its registered office, in order to ensure an efficient exchange of information that enables the FCA to carry out its duties in accordance with the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of EU retained law;

(d)

the third country in which the applicant has its registered office is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force;

(e)

the third country in which the applicant has its registered office has signed an agreement with the United Kingdom, which fully complies with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and on Capital and ensures an effective exchange of information on tax matters, including any multilateral tax agreements; and

(f)

the effective exercise by the FCA F15of its supervisory functions under the Financial Services and Markets Act 2000, these Regulations and any EU tertiary legislation made under the directive which forms part of EU retained law is not prevented by the laws, regulations or administrative provisions of a third country which apply to the applicant, nor by limitations in the supervisory and investigatory powers of that country's supervisory authorities.

(4)

Notwithstanding regulation 5(3)(b), the regulator may give the Part 4A permission to an applicant whose registered office is in a third country if the regulator is satisfied that—

(a)

it is impossible for the applicant to comply with an implementing provision applicable to a full-scope UK AIFM which has its registered office in a third country because of a mandatory provision in the law that applies to the applicant or a third country AIF that the applicant intends to market in F16the United Kingdom or in Gibraltar,

(b)

the law that applies to the applicant or the third country AIF provides for a rule that is equivalent to that implementing provision, has the same regulatory purpose as that provision and offers the same level of protection to the investors of the AIFs managed by the applicant or, as the case may be, the investors of that AIF, and

(c)

the applicant or, as the case may be, the AIF complies with that equivalent rule.

F17(5)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)

In the case of an applicant whose registered office is in a third country, the application is complete if, in addition to containing the information mentioned in regulation 5(8), it contains—

F18(a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

a list of any implementing provisions with which it is impossible for the applicant to comply because of a mandatory provision in the law that applies to the applicant or a third country AIF that the applicant intends to market in F19the United Kingdom or in Gibraltar, or confirmation that there are no such provisions;

(c)

if any provision is included in a list provided under sub-paragraph (b), written evidence that—

(i)

the law that applies to the applicant or the third country AIF provides for a rule that is equivalent to the provision;

(ii)

the equivalent provision has the same regulatory purpose as the provision included in the list provided under sub-paragraph (b);

(iii)

the equivalent provision offers the same level of protection to the investors of the AIFs managed by the applicant or, as the case may be, the investors of the third country AIF; and

(iv)

the applicant or, as the case may be, the third country AIF complies with that equivalent rule,

such evidence being based on regulatory standards developed by F20the FCA;

(d)

if evidence is provided under sub-paragraph (c), a legal opinion in support of the evidence on the existence of the relevant mandatory provision, and a description of the regulatory purpose of and the nature of the investor protection pursued by the equivalent rule;

(e)

the name of the legal representative of the applicant and the place where the legal representative has its registered office or a branch (in the case of a legal person) or where he or she is domiciled (in the case of an individual).”.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For regulation 10(2)(c) (small registered UK AIFMs) substitute—

“(c)

either—

(i)

in the case of an AIFM with its registered office in the United Kingdom, grounds do not exist which would permit or require a court to make a disqualification order within the meaning of section 1(1) of the Company Directors Disqualification Act 1986 M1 against an individual responsible for the management or operation of the AIFM; or

(ii)

in the case of an AIFM with its registered office in a third country, such grounds would not exist if the AIFM were a company incorporated in the United Kingdom.”.

For regulation 29(1) (depositary liability: general provisions) for the words from “in relation to” to the end substitute—

“in relation to—

(a)

the depositary of a UK AIF managed by a full-scope UK AIFM or F22a Gibraltar AIFM; or

(b)

the depositary of a third country AIF managed by a full-scope UK AIFM if—

(i)

the depositary has its registered office or a branch in the United Kingdom; and

(ii)

the AIF is marketed otherwise than pursuant to F23regulations 57 or 59 of these Regulations.”.

In regulation 33 (management of third country AIFs) after “full-scope UK AIFM” insert “ that has its registered office in the United Kingdom ”.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the table in regulation 50 (marketing by AIFMs of other AIFs) substitute the following table—

“

A – AIFM	B – AIF	C – Condition
Full-scope UK AIFM with its registered office in the United Kingdom	An AIF that is not a third country AIF or a third country feeder AIF	The FCA has approved marketing of the AIF in accordance with regulation 54.
Full-scope UK AIFM with its registered office in the United Kingdom	A third country AIF or a third country feeder AIF	The FCA has approved marketing of the AIF in accordance with regulation 54; or the AIFM has notified the FCA in accordance with regulation 57 and meets the conditions at regulation 57(4)(a) to (c), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope UK AIFM with its registered office in a third country	Any AIF	The FCA has approved marketing of the AIF in accordance with regulation 54; or the AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope F25Gibraltar AIFM with its registered office in Gibraltar	A third country AIF or a third country feeder AIF	The marketing is permitted under regulation 49; or the AIFM has notified the FCA in accordance with regulation 57 and meets the conditions at regulation 57(4)(a) to (c), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope F26Gibraltar AIFM with its registered office in a third country	Any AIF	The marketing is permitted under regulation 49; or the AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Small third country AIFM that is not a full-scope UK AIFM F27or a Gibraltar AIFM	Any AIF	The AIFM is a small registered UK AIFM or a small authorised UK AIFM; or the AIFM has notified the FCA in accordance with regulation 58 and meets the conditions at regulation 58(2)(a) and (b), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Third country AIFM that is not a small AIFM, a full-scope UK AIFM F28or a Gibraltar AIFM	Any AIF	The AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.

”

In regulation 54 (FCA approval for marketing)—

In regulation 57 (marketing under Article 36 of the directive)—

In regulation 58 (marketing of AIFs managed by small third country AIFMs)—

In regulation 59 (marketing under Article 42 of the directive)—