The Long-Term Asset Fund (LTAF) is a new category of authorised open-ended fund. Read our final rules and guidance following consultation.
What are we changing
We are proceeding with final rules generally as consulted in CP22/14 which recategorises a unit in an LTAF from a Non-Mass Market Investment (NMMI) to a Restricted Mass Market Investment (RMMI).
This means that distribution will be extended so that mass market retail investors, as well as self-select DC pension schemes and Self-Invested Personal Pensions (SIPPs) will be able to invest into an LTAF.
We are also consulting in chapter 4 on whether excluding Financial Services Compensation Scheme (FSCS) cover for the LTAF would be appropriate, as a first step toward change before the broader (and previously flagged) consideration of FSCS coverage for higher risk investments as part of the Compensation Framework Review.
Who this applies to
This Policy Statement will primarily be of interest to:
- consumer groups
- asset managers with experience of managing illiquid, long-term assets
- potential investors in long term asset funds, like pension providers and trustees of DC or hybrid pension schemes, and sophisticated or wealthy investors
- investment advisers and private wealth managers
- insurers who write unit linked long-term insurance contracts
- fund distributors
We encourage firms who are considering making an authorisation application for an LTAF to engage with us prior to submitting an application.
Any LTAFs already authorised that are structured as an Authorised Contractual Schemes (ACS) must, if they intend to continue distributing to professional, sophisticated or high net worth individuals only, alter the contractual scheme deed accordingly.
Subject to the responses received, we will look to publish a consultation paper on whether to remove FSCS coverage from LTAF products and draft Handbook rules later in 2023.