COLLG 3A
The FSA's
responsibilities under the Act
COLLG 3A.1
Introduction
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COLLG 3A.1.1
See Notes
Part XVII of the Act deals specifically with collective
investment schemes. The main features and practical effects
of Part XVII, and how the
FSA
exercises its responsibilities,
are described below. References to sections are to the numbered sections of
Part XVII.
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Promotion of schemes in the United Kingdom (section 238)
COLLG 3A.1.2
See Notes
(1) Before a scheme can
be promoted to the public in the United Kingdom,
it must be authorised or recognised by the
FSA
as a regulated
collective investment scheme (see COLLG 1A.1.3 G).
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Application for authorisation as an authorised unit trust (sections 242 and 243)
COLLG 3A.1.3
See Notes
(1) The
FSA
requires an application for authorisation
of a unit trust scheme to be
made jointly by the manager and trustee, both of which must be:
(b) independent of each other (see COLL
6.9.2 G (Independence
of depositaries and scheme operators) which provides guidance on
independence).
(2) The application must contain details
of the manager and trustee, of the scheme itself,
and of other persons to whom
functions are to be delegated (e.g. the registrar and
the investment adviser).
(3) Application forms are available
free of charge from the forms page at
http://fsahandbook.info/FSA/form_links.jsp.
(4) A fee is
payable and must be submitted with the application (see FEES
3 Annex 2 R (Application
and notification fees payable in relation to collective investment schemes)).
(5) The following items must be provided
with the application:
(a) a copy of the trust
deed;
(b) a solicitor's certificate
stating that the trust deed complies
with the rules made under section
247 (Trust scheme rules);
(c) a copy of the prospectus,
with a checklist indicating the location of the information required by COLL to be contained in it;
(d) in the case of an application relating
to the authorisation of a UCITS scheme,
a copy of the key investor information document;
and
(e) if applicable, documents evidencing
any guarantee arrangement.
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Determining and refusing applications (sections 244 and 245)
COLLG 3A.1.4
See Notes
(1) Under section 244 (Determination
of applications), the
FSA
has:in which to consider a completed
application following its receipt and must inform the manager and trustee of its decision within that timescale.
In practice, the
FSA
aims to process 75% of completed
applications relating to a UCITS scheme within
6 weeks. If the
FSA
is satisfied with the application, an authorisation order is issued for the scheme.
(2) If the
FSA
proposes to refuse an application,
it must give a warning notice which
will contain the reasons for the refusal. If, having given the warning notice, it decides to refuse the
application, a decision notice will
be sent and the applicant may refer the matter to the Tribunal.
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Revocation of authorisation (section 254)
COLLG 3A.1.5
See Notes
(1) The
FSA
can revoke an authorisation
order if:
(a) the requirements of authorisation
are no longer satisfied; or
(b) the manager or trustee has contravened any provision of
the Act or any rules or
regulations made under it, or has given false or misleading information to
the
FSA
; or
(c) no regulated
activity is being carried on in relation to the scheme and the period of that inactivity
began at least twelve months earlier;
or
(d) it is undesirable for investors
or potential investors that the authorised
unit trust scheme should continue.
(2) The
FSA
may refuse to revoke an authorisation order if it considers that:
(a) any matter should be investigated
prior to revocation; or
(b) revocation would not be in the
interests of investors; or
(c) revocation would be incompatible
with the UCITS Directive.
(3) If the
FSA
proposes to revoke an authorisation order, a separate warning notice will be sent to the manager and trustee.
The same procedures as stated for refusal of authorisation, in relation to
the warning notice and decision notice, will apply.
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Notification of changes to unit trusts (sections 251 and 252A)
COLLG 3A.1.6
See Notes
(1) The manager must
give written notice to the
FSA
when:
(a) an alteration to the authorised unit trust scheme is proposed;
or
(b) it is proposed that the trustee should retire and be replaced.
(2) Any proposal that involves a change
in the trust deed must be accompanied
by a solicitor's certificate stating that the change will not affect
the compliance of the trust deed with
the rules.
(4) The
FSA
has one month following
receipt of notice under section 251 (Alteration of schemes and changes or
manager or trustee) to consider whether or not to refuse the proposal. In
the case of a notice under section 252A (Proposal to convert a non-feeder
UCITS) the period available to the
FSA
is 15 working days.
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Powers of intervention (sections 257 and 281)
COLLG 3A.1.7
See Notes
The
FSA
has powers of intervention if
there is a breach of the Act or COLL, or if it is in the interests of unitholders or potential unitholders in
a scheme. In respect of an AUT, directions can be made for the manager to suspend the issue and redemption of units or
to wind up the scheme.
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Scheme particulars (section 248)
COLLG 3A.1.8
See Notes
The Act empowers
the
FSA
to require a manager to
publish scheme particulars. COLL 4 (Investor
relations) which refers to the scheme particulars as
a prospectus, sets out details
of the required contents, the timing of publication, and how and when the prospectus must be offered to prospective
investors.
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Recognition of overseas schemes
COLLG 3A.1.9
See Notes
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Recognition of schemes constituted in other EEA states (section 264)
COLLG 3A.1.10
See Notes
(1) Section 264 covers schemes constituted in another EEA State that are certified by their Home State regulator as meeting the requirements
of the UCITS Directive (EEA UCITS schemes). The scheme becomes
recognised as soon as its Home State regulator has
transmitted to the
FSA
the notification of the schemeoperator's intention
to access the market in the United Kingdom,
together with the documents prescribed
in Article 93 of the Directive that the schemeoperator has filed with its Home State regulator.
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Recognition of schemes authorised in designated territories (section 270)
COLLG 3A.1.11
See Notes
(1) Section 270 covers schemes that are managed in and authorised
under the law of a country or territory outside the United
Kingdom that has been designated for this purpose by an order
made by HM Treasury ("the Designation Order"). These include Jersey, Guernsey
and the Isle of Man. It should be noted that HM Treasury:
(a) retains responsibility for the
designation of countries or territories and must be satisfied that their laws
and practices relating to the authorisation and regulation of their collective investment schemes provide a level
of protection at least equivalent to that provided under the Act;
(b) must be content that adequate arrangements
exist for co-operation between regulators in each country or territory and
the
FSA
; and
(c) may request the
FSA
provide a report on the regimes
of regulation in existing or prospective designated territories.
(2) Notification forms are available,
free of charge, at the
FSA
website and COLL 9.3 (Section 270 and
272 recognised schemes) provides further information on the documents to
be supplied to the
FSA. The scheme becomes
recognised on the
FSA's
written approval, or automatically
after two months from notification.
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Recognition of individual overseas schemes (section 272)
COLLG 3A.1.12
See Notes
(1) Section 272 covers overseas schemes that are not recognised by virtue
of section 264 or section 270. The
FSA
may make an order declaring the scheme to be recognised if it is satisfied
that the scheme will afford
adequate protection (i.e. a similar level of protection to that provided under
the Act) for investors, and the
arrangements for the scheme's constitution
and management, and the powers and duties of the operator and
of any trustee or depositary, are also "adequate". In deciding
what is adequate, the
FSA
will consider the rules applicable to AUTs or ICVCs.
(2) A section 272 application requires
detailed and rigorous analysis of all aspects of the scheme and
the level of investor protection provided by the regime under which the scheme operates, so the
FSA
has 6 months in
which to determine a completed application. Details of the information and documents required for a section 272 application
can be found in COLL 9.3 (Section 270 and 272 recognised schemes).
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Subsequent notification in respect of schemes recognised under section 272 of the Act
COLLG 3A.1.13
See Notes
(1) The
FSA
wishes to be informed of changes
in the information supplied by the operator of
a section 272 scheme under COLL
9.3.1 D (Information
and documents to be supplied for a section 270 notification or section 272
application).
(2) Any revised documents sent
under (1) should be certified as true copies of the originals and accompanied,
where relevant, by written evidence of the approval of the overseas
regulator to the change.
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Refusal of approval: schemes recognised under sections 270 and 272 of the Act
COLLG 3A.1.14
See Notes
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Revocation of recognition of overseas schemes
COLLG 3A.1.15
See Notes
(1) If the operator of
a scheme recognised under section
264 gives written notice to the
FSA
under section 264(6) that it desires
the scheme to no longer be
recognised, then the scheme ceases
to be recognised.
(2) Under section 279 (Revocation of
recognition), the
FSA
may direct that a scheme shall cease to be recognised under
section 270, or revoke its recognition under section 272, on similar grounds
to those provided for in the revocation of authorised
funds under section 254 (Revocation of authorisation order otherwise
than by consent).
(3) If the
FSA
proposes to give a direction under
section 279 or to revoke a scheme's recognition,
it will give a warning notice.
Should the
FSA
decide to give a direction or revoke
recognition, it will issue a decision notice.
Thereafter, the matter may be referred to the Tribunal.
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Scheme facilities in the United Kingdom (section 283)
COLLG 3A.1.16
See Notes
This section enables the
FSA
to make rules requiring recognised schemes to maintain scheme facilities in the United
Kingdom and to provide certain information to be supplied on
request. Details are contained in COLL 9.4 (Facilities in the United Kingdom).
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