FG14/4 - Changing customers to post-RDR unit classes

This guidance sets out our expectations of firms which are involved in the transfer of investors from pre-RDR unit classes to post-RDR unit classes.

This guidance relates to the following rules in our Handbook:

  • Collective Investment Schemes sourcebook (COLL) 6.4.8R
  • Conduct of Business sourcebook (COBS) 2.1.1R (1), 6.1E and 14.2.1R(7)
  • The definition of ‘unitholder’ within the Glossary of definitions in the Handbook

We have set out our approach following queries from stakeholders and some evidence of uncertainty about how to convert investors to the new unit classes.  The final version takes into account comments made in the consultation, summarised in the summary of feedback.

FG14/4 - Changing customers to post-RDR unit classes

A summary of feedback to the consultation 

This guidance is likely to be of most relevance to platforms and nominees, product providers and financial advisers.

Summary of the key issues

This guidance addresses:

  • whether a conversion to a clean unit class should be treated in the same way as a switch of units
  • whether conversions can happen in bulk rather than individually
  • if conversions can happen without express consent of the relevant unitholder(s)
  • whether advice is needed
  • the role of advisers in the conversion process, and
  • whether a new disclosure document (e.g. a Key Investor Information Document (KIID) for a UCITS scheme) needs to be issued to each relevant unitholder before conversion