Regulation 8 Temporary exemptions

(1)

Before 1 January 2027, designated activity rules made by virtue of regulation 6 do not apply to a person listed in paragraph (2) where the conditions in paragraph (3) are met.

(2)

The persons referred to in paragraph (1) are—

(a)

for UK UCITS—

(i)

the management company (as defined in section 237(2) of FSMA 2000^f1) of a UK UCITS;

(ii)

an authorised open-ended investment company which is a UK UCITS;

(iii)

a person advising on a UK UCITS where the advice is given to—

(aa)

a retail investor located in the United Kingdom, or

(bb)

an agent for that investor;

(iv)

a person offering or selling units of a UK UCITS to a retail investor located in the United Kingdom;

(b)

for EEA UCITS—

(i)

the management company (as defined in point (b) of Article 2(1) of the UCITS Directive) of an EEA UCITS;

(ii)

an investment company referred to in Article 27 of the UCITS Directive (conditions for an investment company);

(iii)

a person advising on an EEA UCITS where the advice is given to—

(aa)

a retail investor located in the United Kingdom, or

(bb)

an agent for that investor;

(iv)

a person offering or selling units of an EEA UCITS to a retail investor located in the United Kingdom;

(c)

for non-UCITS retail schemes—

(i)

the operator or authorised corporate director of a non-UCITS retail scheme;

(ii)

an authorised open-ended investment company which is a non-UCITS retail scheme;

(iii)

a person advising on a non-UCITS retail scheme where the advice is given to—

(aa)

a retail investor located in the United Kingdom, or

(bb)

an agent for that investor;

(iv)

a person offering or selling units of a non-UCITS retail scheme to a retail investor located in the United Kingdom.

(3)

The conditions referred to in paragraph (1) are—

(a)

for UK UCITS, that the operator complies with:

(i)

rules made by the FCA, to the extent they apply to key investor information provided by, or in relation to, a UK UCITS, and

(ii)

the KII regulation;

(b)

for EEA UCITS recognised by virtue of regulation 62 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (temporary recognition for EEA UCITS or sub-fund of EEA UCITS)^f2, that the operator complies with the duties imposed by regulation 66 of those Regulations;

(c)

for EEA UCITS recognised under section 271A or 272 of FSMA 2000 (recognised collective investment schemes)^f3, that the operator complies with duties corresponding to those that, if the United Kingdom were a UCITS host Member State for the purposes of the UCITS Directive, would be imposed on the operator in accordance with Article 94 of that Directive, to the extent it applies to key investor information (referred to in Article 78 of that Directive);

(d)

for non-UCITS retail schemes, the operator complies with:

(i)

rules made by the FCA, to the extent they apply to key investor information provided by, or in relation to, a non-UCITS retail scheme, and

(ii)

where applicable, the KII regulation.

(4)

In this regulation—

(a)

“advising on”, in relation to a unit of a UK UCITS, EEA UCITS or non-UCITS retail scheme, means giving advice on the merits of—

(i)

buying, selling, subscribing for, exchanging, holding or redeeming a unit of a UK UCITS, EEA UCITS or non-UCITS retail scheme,

(ii)

exercising, or not exercising, any right conferred by such an investment to buy, sell, subscribe for, exchange or redeem a unit of a UK UCITS, EEA UCITS or non-UCITS retail scheme, or

(iii)

entering into an agreement relating to a UK UCITS, EEA UCITS or non-UCITS retail scheme;

(b)

“authorised corporate director” means a person who meets the requirements set out in regulation 15(6) of the Open-Ended Investment Companies Regulations 2001 (requirements for a sole director)^f4);

(c)

“key investor information” (other than in paragraph (3)(c)), “long-term asset fund” and “qualified investor scheme” have the meaning given by the Glossary forming part of the Handbook made by the Financial Conduct Authority under FSMA 2000 (as that Handbook has effect from time to time);

(d)

“KII regulation” means Commission Regulation (EU) No 583/2010 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^f5;

(e)

“non-UCITS retail scheme” means an authorised fund which is not a UK UCITS, a qualified investor scheme or a long-term asset fund, and for these purposes “authorised fund” means—

(i)

an authorised unit trust scheme,

(ii)

an authorised contractual scheme, or

(iii)

an authorised open-ended investment company;

(f)

“an authorised unit trust scheme”, “an authorised contractual scheme”, “an authorised open-ended investment company”, “EEA UCITS” (but see sub-paragraph (k)), “the operator”, “sub-fund”, “UK UCITS” and “units” have the meanings given in section 237 of FSMA 2000 (other definitions)^f6;

(g)

“offering”, in relation to a unit of a UK UCITS, EEA UCITS or non-UCITS retail scheme, means communicating sufficient information on—

(i)

the unit, and

(ii)

the terms on which it is offered,

to enable a person to decide to buy, subscribe for or enter into an agreement relating to, the unit;

(h)

“selling”, in relation to a unit of a UK UCITS, EEA UCITS or non-UCITS retail scheme, includes disposing of the unit for valuable consideration, and for these purposes “disposing” includes—

(i)

in the case of a unit consisting of rights under a contract—

(aa)

surrendering, assigning or converting those rights, or

(bb)

assuming the corresponding liabilities under the contract,

(ii)

in the case of a unit consisting of rights under other arrangements, assuming the corresponding liabilities under the arrangements, and

(iii)

in the case of any other unit, granting the rights or interests of which it consists;

(i)

“UCITS Directive” means Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities as it had effect immediately before IP completion day^f7;

(j)

Article 94 of the UCITS Directive is to be read as if—

(i)

references to the UCITS host Member State or such Member State were references to the United Kingdom, and

(ii)

references to the competent authority of the UCITS host Member State were references to the FCA;

(k)

references to an EEA UCITS include a reference to a sub-fund of an EEA UCITS;

(l)

in paragraph (3), references to rules made by the FCA exclude designated activity rules made by virtue of regulation 6.

Annotations

Footnotes

f1: The definition of “management company” was substituted by S.I. 2019/325.
f2: S.I. 2019/325. Regulation 62 was amended by paragraph 14 of Schedule 9 to the Financial Services Act 2021 (c. 22) and S.I. 2020/56.
f3: Section 271A was inserted by paragraph 1 of Schedule 9 to the Financial Services Act 2021 (c. 22). Section 272 was amended by paragraph 9(2)(f) of Schedule 18 to the Financial Services Act 2012 (c. 21), section 25(3) of the Financial Services Act 2021 (c. 22) and S.I. 2013/1388, 2013/1773 and 2019/325.
f4: S.I. 2001/1228. Paragraph (6) was substituted by S.I. 2013/1773 and amended by S.I. 2019/325.
f5: EUR 2010/583.
f6: The definition of “the operator” was substituted by S.I. 2011/1613 and relevant amendments were made by paragraph 5 of Schedule 9 to the Financial Services Act 2021 (c.22) and S.I. 2013/1388, and 2019/325. The definition of “an authorised contractual scheme” was inserted by S.I. 2013/1388. The definition of UK UCITS was inserted by S.I. 2011/1613 and amended by S.I. 2013/1388. The definition of “EEA UCITS” was inserted by S.I. 2019/325. Section 237(4), which deals with the meaning of “sub-fund”, was inserted by S.I. 2011/1613.
f7: OJ L 302 17.11.2009, p. 32.