PS22/8: Protecting investors in authorised funds following the Russian invasion of Ukraine

Consultation opened
Consultation closed
Policy Statement

We respond to feedback to CP22/8. We also set out final rules and guidance which allow authorised fund managers to create separate unit classes (side pockets) for retail investment funds affected by the invasion of Ukraine.

Read PS22/8 (PDF)

What we are changing 

We are finalising Handbook rules to address the potential harm caused by the exposure that UK authorised retail funds have to affected investments. So that these funds can operate fairly and efficiently in the interests of all investors, the rules allow these funds to use side pockets where their Russian, Belarusian and Ukrainian exposures are subject to financial sanctions, or cannot be valued or traded.  

Who this applies to   

This consultation primarily affects:

  • managers of UK authorised retail funds with exposure to affected investments  
  • depositaries of these funds  
  • ancillary service providers to authorised fund managers and depositaries  
  • providers of investment services offering access to these funds, including Self-Invested Personal Pension (SIPP) providers, as well as Individual Savings Account (ISA) managers  
  • distributors of these funds  
  • investment intermediaries who advise on or invest in these funds  
  • insurers who offer unit-linked insurance contracts linked to these funds  
  • discretionary wealth managers, including those who offer model portfolios  
  • other professional or institutional investors  

Consumers who have invested directly in UK authorised retail funds holding affected investments, or who are exposed to these funds through their pension contributions or their long-term life assurance policies, are affected by our proposals.  

Next steps   

The new Handbook rules and guidance will come into force on 11 July 2022.  

We encourage firms looking to implement side pockets to engage with us before applying to modify scheme documents. This is so that we can tell you what specific information we will want you to provide as part of the application. Please initially confirm your intention to submit to [email protected].