Temporary marketing permission regimes

The Government has laid two statutory instruments in Parliament which create regimes allowing fund managers to continue to market funds in the UK for a limited period after exit day.

Temporary marketing permission regime for EEA UCITS

The relevant statutory instrument for operators of EEA UCITS is the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019. These Regulations are not yet in force. Subject to Parliamentary approval, Part 6 of the Regulations will create a temporary extension of the marketing regime applicable to EEA UCITS.

The Regulations will allow the operator of an EEA UCITS to notify us, using our Connect system, before exit day that:

  • in relation to a stand-alone scheme, the operator wishes the scheme to be treated as a ‘recognised scheme’ for the purposes of Part 17 of FSMA in circumstances where the stand-alone scheme is an EEA UCITS recognised under s264 of FSMA immediately before exit day
  • in relation to a sub-fund authorised by the relevant home state regulator before exit day, the operator wishes the sub-fund to be treated as a recognised scheme for the purposes of Part 17 of FSMA in circumstances where the sub-fund is the sub-fund of an EEA UCITS which is recognised under s264 of FSMA immediately before exit day

A notification made by an operator for these purposes must be made in such manner, during such period, and be accompanied by such information as the FCA may direct under regulation 64(1) of the Regulations.

Although the Regulations are not yet in force, the effect of regulation 64(2) is that a notification can be validly made before the Regulations come into force provided it otherwise complies with any directions given by the FCA. We have published a draft of the direction we intend to issue if Parliament approves the Regulations:

The Regulations will also allow the operator of an EEA UCITS which benefits from the temporary extension to the marketing regime to market ‘new sub-funds’ in the United Kingdom after exit day, subject to certain conditions (regulation 63(3)). We will issue directions for this purpose in due course.

Temporary marketing permission regime for EEA AIFs, EuVECAs and EuSEFs

The relevant statutory instrument for managers of AIFs, EuVECAs and EuSEFs is the Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019. These Regulations are not yet in force. Subject to Parliamentary approval, these Regulations will insert a new Part 9A into the Alternative Investment Fund Managers Regulations 2013 and this makes provision for a temporary marketing permissions regime which will enable:

  • an AIF, EuVECA or a EuSEF to be marketed in the United Kingdom on the same terms and subject to the same conditions as it was able to before exit day for a limited period
  • an EEA AIFM which is authorised by its home state regulator under Article 6(1) of the AIFM Directive to continue to market a UK AIF in the United Kingdom on the same terms and subject to the same conditions as it was able to before exit day for a limited period

To benefit from the temporary marketing permissions regime under these Regulations, the manager of the AIF, EuVECA or EuSEF must satisfy certain conditions, including notifying us, via our Connect system, that it wishes the relevant fund to have temporary permission to be marketed in the United Kingdom.

Because of the information which managers of AIFs, EuVECAs and EuSEFs will need to consider, firms can notify us in advance of the Regulations coming into force by using the form in the Connect system.

If the Regulations are approved by Parliament, we will contact any manager of an AIF, EuVECA or EuSEF who notifies us in advance of the Regulations coming into force and ask them to tell us if they do not want us to treat their early notification as a notification for the purposes of the Regulations.

We will issue directions for the purposes of these Regulations once they are in force. In the meantime, we have published a draft of the direction we would propose to issue: