Collective Investment Schemes - FCA Handbook

1 Collective InvestmentSchemesCOLL ContentsCollective Investment SchemesCOLL and of authorised fundCOLL 2 Authorised fund fund applicationsCOLL instrument constituting the 4 Investor and of Unitholders and service of and Prospectus provisions [deleted] investor information and marketing for UCITS master-feeder arrangements4 Annex 1 Total expense ratio calculation [deleted]4 Annex 2 Portfolio turnover calculation [deleted]COLL 5 Investment and borrowing Investment powers and limits for UCITS , borrowing, lending and other powers and borrowing limits for non-UCITS retail powers and borrowing limits for NURS operating as powers and borrowing limits for feeder UCITSn Release 22l Aug iCOLL ContentsCOLL 6 Operating duties and and and and and replacement of the authorised fund manager and and duties of the scheme, the authorised fund manager, and of AFMs in relation to UCITS Schemes and EEA UCITS : accounting, allocation and , names and UCITS business personnel control and internal management policy and risk keeping6 Annex 2UK UCITS management company of UCITS Schemes : Derivative UseReport (FSA042.)

2 UCITS)6 Annex 3 Guidance notes on UK UCITS management company of UCITS Schemes :Derivative Use Report (FSA042: UCITS)COLL 7 Suspension of dealings, termination of authorised funds and and restart of up a solvent ICVC and terminating or winding up a sub-fund ofan up an AUT and terminating a sub-fund of an up a solvent ACS and terminating a sub-fund of a or sub-funds that are not commercially of pockets7 Annex 1 Matters to be considered by the authorised fund manager beforecreating a side pocket classCOLL 8 Qualified investor and borrowing and , suspension, and Schemes of arrangement8 Annex 2 ACS Qualified Investor Schemes : eligible investorsn Release 22l Aug iiCOLL ContentsCOLL 9 Recognised and general 272 recognised in the United KingdomCOLL 10 FeesCOLL 11 Master-feeder arrangements for UCITS of a feeder and information exchange for master and feeder up, merger and division of master UCITS11 Annex 1 Contents of the standard master-feeder agreement11 Annex 2 Contents of the internal conduct of business rulesCOLL 12 Management company and product passports under the UCITSD irective [deleted]

3 COLL 13 Operation of feeder requirements for feeder NURSCOLL 14 Charity authorised Investment with the Charity allocation and distributionCOLL 15 Long-term asset to act as the authorised fund and other pre-sale report and investor and borrowing and responsibilities of the authorised fund manager and , pricing, dealing and requirements for feeder LTAFsn Release 22l Aug iiiCOLL , suspension, and Schemes of arrangement15 Annex 1 ACS Long-term asset funds: Eligible investorsCOLLA ppendixKII RegulationAppendix 1 UKKII RegulationCOLLA ppendix 2 Modifications to the KII Regulation for KII-compliant NURSA ppendix 2 Modifications to the KII Regulation for KII-compliant NURST ransitional provisions and SchedulesTP 1 Transitional ProvisionsSch 1 Record keeping requirementsSch 2 Notification requirementsSch 3 Fees and other required paymentsSch 4 Powers exercisedSch 5 Rights of action for damagesSch 6 Rules that can be waivedn Release 22l Aug ivCOLL Contentsn Release 22l Aug vCollective Investment SchemesChapter 1 Introductionn Release 22l Aug 1/1 COLL 1 : IntroductionSection Release 22l Aug 1 and (1) This sourcebook, except for n COLL 9 (Recognised Schemes ), applies to.

4 (a) Investment companies with variable capital (ICVCs);(b) ACDs, other directors and depositaries of ICVCs;(c) managers and trustees of authorised unit trust Schemes (AUTs);and(cA) authorised fund managers, depositaries and nominated partnersof authorised contractual Schemes (ACSs).(d) [deleted](2) n COLL 9 applies to operators of Schemes that are recognised schemesand to those seeking to secure recognised status for such Schemes .(3) n COLL (Auditors) also applies to auditors of master UCITS andfeeder UCITS which are UCITS Schemes .(4) [deleted](5) n COLL TP (48) contains transitional provisions that apply in relationto any scheme that will need to become a regulated money marketfund in accordance with the Money Market Funds Regulation, andwhich operates as a scheme prior to 21 July 2018.

5 [deleted][deleted][deleted] (1) The general purpose of this sourcebook is to contribute to the FCAmeeting its statutory objectives of the protection of consumers. Itprovides a regime of product regulation for authorised funds, whichsets appropriate standards of protection for investors by specifying anumber of features of those products and how they are to 1 : IntroductionSection Release 22l Aug 1/3(2) In addition, this sourcebook implemented part of the requirements ofthe UCITS Directive relevant to authorised funds and managementcompanies, along with other requirements implemented in otherparts of the management company and product [deleted]The Collective Investment Schemes Information Collective Investment Schemes Information Guide COLLG provides somegeneral background material on the regulatory structure surroundingscheme regulation in the 1 : IntroductionSection.

6 Types of authorised Release 22l Aug 1 of authorised fundTypes of authorised application for an authorisation order must propose that the scheme beone of the following types:(1) a UCITS scheme;(2) a non-UCITS retail scheme, including:(a) a non-UCITS retail scheme operating as a fund of alternativeinvestment funds (FAIF); and(b) a non-UCITS retail scheme which is an umbrella with sub-fundsoperating as:(i) FAIFs;(ii) standard non-UCITS retail Schemes ; or(iii) a mixture of (i) and (ii);(3) a qualified investor scheme; or(4) a long-term asset authorised fund, except for an ACS that is a limited partnership scheme,may be structured as an umbrella with separate sub-funds.[Note: article 1(2) second paragraph of the UCITS Directive]Types of authorised fund - (1) UCITS Schemes must in particular comply with:(a) n COLL R (UCITS obligations); and(b) the Investment and borrowing powers rules for UCITS Schemes setout in n COLL to n COLL.

7 (2) (a) Non-UCITS retail Schemes are Schemes that do not comply with allthe conditions necessary to be a UCITS scheme.(b) A non-UCITS retail scheme is an AIF and must be managed by anAIFM.(c) The UK may, under the legislation which implemented article 43of AIFMD, impose stricter requirements onCOLL 1 : IntroductionSection : Types of authorised fund1n Release 22l Aug 1/5an AIFM or an AIF marketed to retail clients than therequirements that apply to an AIF marketed only to professionalclients.(d) This sourcebook contains the stricter requirements for an AIFwhich is a non-UCITS retail scheme.(e) A full-scope UK AIFM must also comply with the requirements inFUND and any other applicable provisions of AIFMD.(f) Non-UCITS retail Schemes could become UCITS Schemes , providedthey are changed, so as to comply with the necessary conditions.

8 (g) Non-UCITS retail Schemes operating as FAIFs have wider powersto invest in Collective Investment Schemes than other non-UCITS retail Schemes .(2A) A non-UCITS retail scheme may also be structured as an umbrella withsub-funds operating as:(a) FAIFs;(b) standard non-UCITS retail Schemes ; or(c) a mixture of (a) and (b).In these cases, rules relating to Investment powers andborrowing limits apply to each sub-fund as they would to ascheme.(3) (a) Qualified investor Schemes may only be promoted to:(i) professional clients; and(ii) retail clients who are sophisticated investors,on the same terms as non-mainstream pooled investments.(b) A qualified investor scheme is an AIF and must be managed by anAIFM.(c) [deleted](d) This sourcebook contains the stricter requirements for an AIFwhich is a qualified investor scheme.

9 (e) A full-scope UK AIFM must also comply with the requirements inFUND and any other applicable provisions of AIFMD.(f) Qualified investor Schemes could change to become non-UCITS retail Schemes or UCITS Schemes .(3A) (a) A long-term asset fund may be promoted only to:(i) professional clients; and(ii) retail clients who are sophisticated investors or certified highnet worth investors,on the same terms as non-mainstream pooled investments.(b) A long-term asset fund is an AIF and must be managed by a full-scope UK AIFM (see n COLL (Authorised fund manager tobe a full-scope UK AIFM)).(c) Under the Act and the UK AIFM regime, the FCA is able toimpose stricter requirements on an AIFM or an AIF marketed toCOLL 1 : IntroductionSection : Types of authorised Release 22l Aug 1/6retail clients than the requirements that apply to an AIFmarketed only to professional clients.

10 This sourcebook containsstricter requirements for an AIF which is a long-term asset fund.(d) A full-scope UK AIFM must also comply with the requirements inFUND and any other applicable provisions of the UK AIFM regime.(e) A long-term asset fund could change to become a qualifiedinvestor scheme, a non-UCITS retail scheme or a UCITS scheme,provided it complies with the necessary conditions. Theauthorised fund manager of an LTAF may need to makesignificant changes to the LTAF s constitution, objectives andinvestment powers for it to become a UCITS scheme or a non-UCITS retail scheme.(f) A qualified investor scheme could become authorised as a long-term asset fund if the authorised fund manager operates, orproposes to operate, the scheme in accordance with the rules inn COLL 15 (Long-term asset funds).