Source: http://www.legislation.gov.uk/uksi/2011/1613
Timestamp: 2019-10-17 16:53:16
Document Index: 26976181

Matched Legal Cases: ['art 1', 'art 1', 'ART 1', 'ART 2', 'ART 3', 'art 4', 'art 4', 'ART 4', 'art. 1', 'art 42', 'ART 5', 'art. 1', 'ART 5', 'ART 5', 'ART 6']

Changes over time for: The Undertakings for Collective Investment in Transferable Securities Regulations 2011
The Undertakings for Collective Investment in Transferable Securities Regulations 2011 is up to date with all changes known to be in force on or before 17 October 2019. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
The Treasury are a government department designated F1 for the purposes of section 2(2) of the European Communities Act 1972 F2 in relation to collective investment in transferable securities and other liquid assets, and to measures relating to investment firms and the provision of investment services.
A draft of these Regulations has been laid before and approved by a resolution of each House of Parliament in accordance with paragraph 2 of Schedule 2 to the European Communities Act 1972, and section 429(2) of the Financial Services and Markets Act 2000 F3.
The Treasury, in exercise of the powers conferred on them under section 2(2) of the European Communities Act 1972 and by sections 262, and 428 of the Financial Services and Markets Act 2000, make these Regulations.
F1S.I. 1993/2661; S.I. 2002/2840.
F21972 c. 68. Section 2(2) was amended by section 27(1)(a) of the Legislative and Regulatory Reform Act 2006 (c.51) and the European Union (Amendment) Act 2008 (c.7), Schedule, Part 1. Paragraph 1A of Schedule 2 was inserted by section 28 of the Legislative and Regulatory Reform Act 2006 and amended by the European Union (Amendment) Act 2008, Schedule, Part 1.
F32000 c. 8.
PART 1U.K.Citation and Commencement
1. These Regulations may be cited as the Undertakings for Collective Investment in Transferable Securities Regulations 2011, and come into force on 1st July 2011.
PART 2U.K.Amendments to the Financial Services and Markets Act 2000
Amendment of the Financial Services and Markets Act 2000U.K.
(2) In section 66(2) F4, in paragraph (b)—
(3) After section 90 F5, insert—
(4) In section 140(3)(b) F6, for “Article 1a.2” substitute “ Article 2.1(b) ”.
(5) In section 145 F7, in subsection (3B)(b)—
(6) In section 184(7) F8 for “Article 1a.2” substitute “ Article 2.1(b) ”.
(8) For section 195A F9, and the heading to that section, substitute—
(9) In section 199 F10—
(11) In sections 205 and 206(1) F11—
(12) In section 206A(2) F12, in the definition of “relevant requirement”—
(13) In section 213 F13, for subsection (10), substitute—
“CHAPTER 5AU.K.MASTER-FEEDER STRUCTURES
(27) In section 301E(7) F14 for “Article 1a.2” substitute “ Article 2.1(b) ”.
(29) In subsection (6)(a)(i) of section 380, subsection (9)(a)(i) of section 382, and subsection (7)(a) of section 384 F15, in the definition of “relevant requirement”—
(31) In section 422A(7) F16 for “Article 1a.2” substitute “ Article 2.1(b) ”.
(32) In Schedule 1, in paragraph 6(1) and (3) F17—
(a)for paragraph 4B F18 substitute—
(b)in paragraph 5, for sub-paragraph (f) F19, substitute—
(c)after paragraph 11A F20, insert—
(d)for paragraph 15A F21, substitute—
(j)after paragraph 20(3B) F22, insert—
(k)in paragraph 20(4B) F23 after “markets in financial instruments directive” insert “ or the UCITS directive ”;
(m)after paragraph 20A F24, insert—
(n)After paragraph 25 F25, insert—
F4Section 66(2) was amended by S.I. 2007/126.
F5Section 90 was amended by S.I. 2005/1433.
F6Section 140(3) was inserted by S.I. 2003/2066.
F7Section 145(3B) was inserted by S.I. 2006/2975.
F8Section 184 was substituted by S.I. 2009/534.
F9Section 195A was inserted by S.I. 2007/126.
F10Section 199 was amended by S.I. 2007/126 and 2007/3253.
F11Sections 205 and 206(1) were amended by S.I. 2007/126.
F12Section 206A was inserted by the Financial Services Act 2010 (c.28), section 9, and amended by S.I. 2011/99.
F13Section 213 was amended by the Banking Act 2009 (c.1), s. 170(2).
F14Section 301A was first inserted by S.I. 2007/126, and substituted by S.I. 2009/534.
F15Sections 390, 382 and 384 were amended by S.I. 2007/126.
F16Sections 422 and 422A were substituted for section 422 by S.I. 2009/534.
F17Paragraph 6 of Schedule 1 was amended by S.I. 2007/126.
F18Paragraph 4B of Schedule 3 was inserted by S.I. 2003/2066.
F19Sub-paragraph (f) of paragraph 5 of Schedule 3 was inserted by 2003/2066.
F20Paragraph 11A of Schedule 3 was inserted by S.I. 2007/126.
F21Paragraph 15A of Schedule 3 was inserted by S.I. 2003/2066.
F22Paragraph 20(3B) was inserted by S.I. 2003/1473.
F23Paragraph 20(4B) of Schedule 3 was inserted by S.I. 2001/1376 and amended by S.I. 2007/126.
F24Paragraph 20A of Schedule 3 was inserted by S.I. 2007/126.
F25Paragraph 25 was inserted by S.I. 2003/1473.
PART 3U.K.Amendments to secondary legislation
Amendment of the Open-Ended Investment Companies Regulations 2001U.K.
3.—(1) The Open-Ended Investment Companies Regulations 2001 F26 are amended as follows.
(a)in paragraph (4) insert at the beginning “ Subject to paragraph (4A) ”;
“(4A) Where the application relates to an open-ended investment company which is a UCITS, it must be determined by the Authority before the end of two months beginning with the date on which it receives the application.”
(a)in paragraph (1)(a), insert at the end “ other than one to which regulation 22A applies ”
(b)in paragraph (1)(c), insert at the end “ other than a proposed merger to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2010 applies ”;
(4) After regulation 22, insert—
“The Authority's approval for conversion of a feeder UCITS
22A.—(1) An open-ended investment company must give written notice to the Authority of any proposal to amend its instrument of incorporation to enable it to convert into a UCITS which is not a feeder UCITS.
(2) Any notice given in respect of such a proposal must be accompanied by—
(a)a certificate signed by a solicitor to the effect that the amendment will not affect the compliance of the instrument of incorporation with Schedule 2 to these Regulations and with such of the requirements of FSA rules as relate to the contents of that instrument; and
(a)the notice given under subsection (1) relates to a proposal to amend the instrument of incorporation of an open-ended investment company which is a feeder UCITS to enable it to convert into a UCITS which is not a feeder UCITS following the winding-up of its master UCITS; and
(b)the proceeds of the winding-up are to be paid to the company before the date on which it proposes to start investing in accordance with the new investment objectives and policy provided for in its amended instrument of incorporation.
(4) Where this paragraph applies, the Authority may only approve the proposal subject to the conditions set out in section 283A(5) and (6) of the Act.
(5) The Authority must, within fifteen working days from the date on which it received the notice under paragraph (1), give—
(a)written notice that it approves the proposed amendments to the instrument of incorporation, or
(b)a warning notice under regulation 22 that it proposes to refuse approval of the proposed amendments.
(6) Effect is not to be given to any proposal of which notice has been given under subsection (1) unless the Authority, by written notice, has given its approval to the proposal.
(7) If the Authority proposes to refuse approval of the proposal it must give separate warning notices to the company and to its depositary.
(8) If, having given a warning notice to a person, the Authority decides to refuse approval—
(9) In this regulation, “specified” means specified in—
(a)rules made by the Authority to implement the UCITS directive, or
(b)any directly applicable Community regulation or decision made under the UCITS directive.”
(5) After regulation 29, insert—
“InformationU.K.
Information for home state regulator
29A.—(1) Paragraph (2) applies if, in accordance with rules made by the Authority to implement Article 66 of the UCITS directive, the Authority is informed by an open-ended investment company which is a master UCITS that a feeder UCITS which invests in shares of the master UCITS is an EEA UCITS.
Information for feeder UCITS
29B.—(1) The Authority must immediately inform any authorised open-ended investment company which is a feeder UCITS of an open-ended investment company or authorised unit trust scheme (the master UCITS) of—
(c)any information reported to the Authority pursuant to rules of the Authority made to implement Article 106(1) of the UCITS directive which relates to the master UCITS, or to one or more of its directors, its operator, trustee, depository or auditor.
(2) The Authority must immediately inform any authorised open-ended investment company which is a feeder UCITS of an EEA UCITS of any information received from the home state regulator of the EEA UCITS in relation to—
(a)any failure by the EEA UCITS to comply with any requirement in Chapter VIII on the UCITS directive;
(c)any information reported to the home state regulator pursuant to Article 106(1) of the UCITS directive relating to the EEA UCITS, to one or more of its directors, its management company, trustee, depositary or auditor.
(3) Where the Authority has the information described in paragraph (1)(a), (b) or (c) in relation to an authorised open-ended investment company which is a master UCITS in relation to one or more feeder UCITS which are EEA UCITS, the Authority must immediately give that information to the home state regulator of each feeder UCITS established outside the United Kingdom.”
(6) After regulation 33, insert—
“Winding up of a master UCITS
33A.—(1) Paragraphs (2) and (3) apply if a master UCITS is wound up.
(2) If the Authority considers that an open-ended investment company which is a feeder UCITS of the master UCITS may be wound up under section 221 of the 1986 Act, the Authority must present a petition to the Court for the feeder UCITS to be wound up unless one of the conditions referred to in paragraph (4) is satisfied.
(3) If paragraph (2) does not apply, the Authority must require the directors of any open ended investment company which is a feeder UCITS of the master UCITS to submit a proposal under regulation 21 to wind up the affairs of the company unless one of the conditions referred to in paragraph (4) is satisfied.
(4) The conditions set out in paragraphs (2) and (3) are—
(a)the Authority approves under section 283A of the Act the investment by the feeder UCITS of at least 85% of its assets in units of another UCITS or master UCITS; or
(b)the Authority approves under regulation 22A an amendment of the instrument of incorporation of the company which would enable it to convert into a UCITS which is not a feeder UCITS.
Merger or division of a master UCITS
33B.—(1) Paragraph (2) applies if a master UCITS—
(2) The Authority must require the directors of any open-ended investment company which is a feeder UCITS of the master UCITS to prepare a proposal to wind up the affairs of the feeder UCITS under regulation 21 unless—
(a)the Authority approves under section 283A of the Act the investment by the company of at least 85% of its assets in the units of—
(iii)another UCITS or master UCITS; or
(b)the Authority approves under regulation 22A an amendment of the instrument of incorporation of the company which would enable it to convert into a UCITS which is not a feeder UCITS.”
(7) In regulation 70, insert at the end “ other than mergers within the meaning of Article 2.1(p) of the UCITS directive ”.
(8) After regulation 83, insert—
“Disclosure under the UCITS directive
83A.—(1) This regulation applies in relation to a disclosure made by a person who falls within paragraph (2) to comply with requirements set out in rules made by the Authority to implement Chapter VIII of the UCITS directive.
(a)the auditor of an open-ended investment company that is a master UCITS;
(b)the depositary of an open-ended investment company that is a master UCITS;
(c)the auditor of an open-ended investment company that is a feeder UCITS;
(d)the depositary of an open-ended investment company that is a feeder UCITS; or
(e)a person acting on behalf of a person within paragraphs (a), (b), (c) or (d) above.
(3) A disclosure to which this section applies is not to be taken as a contravention of any duty to which the person making the disclosure is subject.”
(9) In Schedule 5, for paragraph 4(5), substitute—
“(5) Subject to sub-paragraph (5A), no rules made under section 340 of the Act (appointment of auditors) apply in relation to open-ended investment companies.
(5A) Rules may be made under section 340 of the Act in relation to open-ended investment companies for the purpose of implementing the UCITS directive or any commission directive made under the UCITS directive.”
(10) In paragraph 1 of Schedule 6, insert at the end “ other than one to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2011 applies ”.
F26S.I. 2001/1228. There have been amendments to this instrument but none is relevant.
Amendment of the Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001U.K.
4.—(1) The Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001 F27 are amended as follows.
(a)in paragraph (c) of the definition of “branch”, for “Article 5f.2” substitute “ Article 12.2 ”;
(b)in paragraph (a) of the definition of “relevant management company”, for “Article 5.3(a)” substitute “ Article 6.3 ”.
(3) Renumber regulation 2 as paragraph (1) of that regulation.
(4) After paragraph (1) of regulation 2, insert—
“(2) The persons mentioned in paragraph (1)(a), (b) and (c) are prescribed in relation to all authorised activities.
(3) A relevant management company is prescribed in relation to all authorised activities other than any collective portfolio management services set out in Annex II to the UCITS directive which it is providing to a UCITS in the United Kingdom.”
F27S.I. 2001/1783 amended by S.I. 2003/1476, 2003/2066, 2006/3221.
Amendment of the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001U.K.
5.—(1) The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 F28 are amended as follows.
(a)in the definition of “directive restrictions” for “Article 50 of the UCITS directive” substitute “ Article 102 of the UCITS directive ”;
(b)insert the following definition in the appropriate place—
“UCITS directive information” means confidential information received by the Authority in the course of discharging its functions as an EEA competent authority under the UCITS directive.”
(a)in paragraph (1), after “(3A)” insert “ , (3C) ”;
(b)in paragraph (2)(e), for “50.4” substitute “ 102.3 ”;
(c)after paragraph (3B), insert—
“(3C) Paragraph (1) does not permit disclosure of UCITS directive information to a person specified in the first column of Schedule 1 other than a person listed in paragraph (3D) where that information—
(a)was obtained from an EEA competent authority under Article 101.2 of the UCITS directive or an overseas regulatory authority under a cooperation agreement referred to in Article 102 of that directive, and
(b)that authority indicated at the time of communication that such information must not be disclosed,
unless that authority has given its express consent to the disclosure.
(3D) The persons are—
(b)the central bank of any country or territory outside the United Kingdom;
(c)a recognised investment exchange;
(d)an auditor exercising functions conferred by or under the Act in relation to insurance undertakings, credit institutions, investment firms or other financial institutions;
(e)an EEA regulatory authority exercising functions in relation to the supervision of credit institutions, investment firms, insurance undertakings or other financial institutions.”
(a)in paragraph (d)(ii), after “competent” insert “ authority ”;
“(e)UCITS directive information, where that information has been received from—
(i)an overseas regulatory authority under a cooperation agreement referred to in Article 102 of the UCITS directive; or
(ii)an EEA competent authority under Article 101.2 of the UCITS directive,
unless that authority has given its express consent for disclosure that is covered by this Part.”
F28S.I. 2001/2188, amended by S.I. 2003/693, 2003/2066, 2003/1473, 2004/1862, 2004/3379, 2006/3221, 2006/3413, 2007/3255 and 2010/2628.
Amendment of the Financial Services and Markets Act 2000 (Collective Investment Schemes Constituted in other EEA States) Regulations 2001U.K.
6.—(1) The Financial Services and Markets Act 2000 (Collective Investment Schemes Constituted in Other EEA States) Regulations 2001 F29 are amended as follows.
(2) In regulation 2, insert after the definition of “the Act”—
““the UCITS 1985 directive” means the Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 85/61/EEC).”
“(b)its prospectus and, subject to regulation 5, the key investor information referred to in Article 78 of the UCITS directive; and”.
(4) After regulation 4, insert—
“5. The notice to be given to the Authority under section 264(1) may be submitted with the simplified prospectus (within the meaning of Section VI of the UCITS 1985 directive) until 30 June 2012.”
F29S.I. 2001/2383 amended by S.I. 2003/2066.
PART 4U.K.MERGERS
“the Act” means the Financial Services and Markets Act 2000 F30;
“the Authority” means the [F31Financial Conduct Authority];
“cross-border merger” means a merger of UCITS—
at least two of which are established in different EEA States; or
established in the same Member State into a newly constituted UCITS established in another EEA State;
“depositary” F32... —
in relation to a open-ended investment company means the person appointed under regulation 5 of the Open-Ended Investment Companies Regulations 2001;
[F33in relation to an authorised contractual scheme means the person by whom, or to whose order, the property subject to the scheme is held;]
in relation to an authorised unit trust scheme means the trustee of the scheme; and
includes the depositary of an EEA UCITS;
“domestic merger” means a merger between two or more UK UCITS where at least one of the UCITS involved has given notice to the Authority under paragraph 20B of Schedule 3 to the Act;
[F34“EEA management company” means a management company that is established in an EEA State other than the UK;]
“EEA UCITS” is a UCITS which is established in an EEA State other than the United Kingdom;
[F34“implementing provision” means a requirement that is imposed—
by these Regulations; or
by or under the Act, if the provision implements the UCITS directive;]
“[F35manager]” means—
in relation to an open-ended investment company, the directors of that company,
[F36in relation to an authorised contractual scheme, the operator of that scheme,]
in relation to an authorised unit trust scheme, the manager of that scheme,
in relation to an EEA UCITS, the management company of that UCITS or, if the EEA UCITS is an open ended investment company that has not designated a management company, the EEA UCITS;
“UCITS” means an undertaking for collective investment in transferable securities within the meaning of Article 1.2 of the UCITS directive, or a sub-fund of such an undertaking, and includes an open ended investment company, [F37an authorised contractual scheme] or an authorised unit trust to which the UCITS directive applies;
“UCITS directive” means directive means the Council Directive of 13th July 2009 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 2009/65/EC) [F38, as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23rd July 2014;]
[F34“UK management company” means a management company that is established in the UK;]
“UK UCITS” means a UCITS which is established in the United Kingdom;
“unit-holders” means—
in the case of an open-ended investment company, the shareholders or members of that [F39company];
[F40in the case of an authorised contractual scheme, the unit-holders in that scheme; and]
in the case of an authorised unit trust scheme or an EEA UCITS, the unit-holders in that trust scheme or EEA UCITS;
“units” means—
in the case of an open-ended investment company, shares in the company;
in the case of an authorised unit trust scheme [F41or an authorised contractual scheme], units in the scheme; and
in the case of an EEA UCITS, units in the undertaking.
[F42(2) Expressions used in this Part which are defined in the UCITS directive have the same meaning as in the UCITS directive and, subject to paragraph (1), expressions used in this Part shall have the same meaning as in the Act.]
F302000 c. 8.
F31Words in reg. 7 substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), art. 1(1), Sch. 2 para. 212(a)
F32Word in reg. 7(1) omitted (6.6.2013) by virtue of The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(a)(i) (with reg. 24)
F33Words in reg. 7(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(a)(ii) (with reg. 24)
F34Words in reg. 7(1) inserted (18.3.2016) by The Undertakings for Collective Investment in Transferable Securities Regulations 2016 (S.I. 2016/225), regs. 1, 3(2)(a)
F35Word in reg. 7(1) substituted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(b)(i) (with reg. 24)
F36Words in reg. 7(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(b)(ii) (with reg. 24)
F37Words in reg. 7(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(c) (with reg. 24)
F38Words in reg. 7(1) inserted (18.3.2016) by The Undertakings for Collective Investment in Transferable Securities Regulations 2016 (S.I. 2016/225), regs. 1, 3(2)(b)
F39Word in reg. 7(1) substituted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(d)(i) (with reg. 24)
F40Words in reg. 7(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(d)(ii) (with reg. 24)
F41Words in reg. 7(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(2)(e) (with reg. 24)
F42Reg. 7(2) substituted (18.3.2016) by The Undertakings for Collective Investment in Transferable Securities Regulations 2016 (S.I. 2016/225), regs. 1, 3(2)(c)
8.—(1) This Part applies to any reconstruction or amalgamation involving a UK UCITS which is a cross-border merger or a domestic merger, and which takes the form of a merger by absorption, a merger by formation of a new company [F43, contractual scheme] or unit trust scheme, or a [F44merger by scheme of arrangement].
(2) A “merger by absorption” means an operation in which—
(a)there are one or more transferor EEA UCITS or sub-funds (the “merging UCITS”);
(b)there is an existing transferee UK UCITS or sub-fund (the “receiving UCITS”);
(c)every transferor UCITS or sub-fund is dissolved without going into liquidation and transfers all of its assets and liabilities to the transferee UCITS or sub-fund; and
(d)the consideration for the transfer is units in the receiving UCITS, receivable by unit-holders in the merging UCITS, or members of the sub-fund, with or without a cash payment to unit-holders not exceeding ten per cent of the net asset value of those units.
(3) A “merger by formation of a new UCITS” means an operation in which—
(a)there are two or more transferor EEA UCITS, or sub-funds (the “merging UCITS”);
(b)every transferor EEA UCITS or sub-fund is dissolved without going into liquidation, and on dissolution transfers all of its assets and liabilities to a transferee UK UCITS or sub-fund formed for the purpose of, or in connection with, the operation (the “receiving UCITS”);
(c)the consideration for the transfer is—
(i)units in the receiving UCITS, and
(ii)if so agreed, a cash payment not exceeding 10 per cent of the net asset value of those units,
receivable by members of the transferor UCITS.
(4) A “merger by scheme of arrangement” means an operation in which—
(a)there are one or more transferor UCITS or sub-funds of a UCITS (“the merging UCITS”);
(b)the transferor UCITS or sub-funds continue to exist until their liabilities have been discharged, but transfer their net assets to—
(i)a sub-fund of the same UCITS;
(ii)another existing UCITS or a sub-fund of that UCITS; or
(iii)a UCITS formed for the purposes of the operation
(“the receiving UCITS”).
F43Words in reg. 8(1) inserted (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 14(3) (with reg. 24)
F44Words in reg. 8(1) substituted (24.8.2012) by The Undertakings for Collective Investment in Transferable Securities (Amendment) Regulations 2012 (S.I. 2012/2015), regs. 1, 5
Application for authorisationU.K.
9.—(1) A merging UK UCITS must apply to the Authority for an order authorising a merger (an “authorisation order”).
(2) The application must be made in such manner as the Authority may direct and must be accompanied by—
(a)the common draft terms of the proposed merger duly approved by the UCITS, any other merging UCITS and the receiving UCITS;
(b)where the receiving UCITS is an EEA UCITS, an up-to-date version of the prospectus and the key investor information referred to in Article 78 of the UCITS directive for that UCITS;
(c)a statement by each of the depositaries or, in the case of an authorised unit trust scheme, the trustee, of the merging UCITS and the receiving UCITS confirming that, in accordance with rules made by the Authority or by the competent authorities of an EEA UCITS involved in the merger to implement Articles 40 and 41 of the UCITS directive, they have verified compliance of the following matters with the requirements of those rules—
(i)the identification of the type of merger and of the UCITS involved;
(ii)the planned effective date of the merger; and
(iii)the rules applicable, respectively, to the transfer of assets and the exchange of units; and
(d)the information on the proposed merger that the merging and the receiving UCITS intend to provide to their respective unit-holders.
(3) Where the proposed merger is a cross-border merger, the information referred to in paragraph (2) must be supplied to the Authority both in English, and in the official language, or one of the official languages of any EEA State in which the merging or receiving EEA UCITS is established, or in a language approved by the competent authorities in that EEA State.
(4) Where the Authority considers that the information supplied under paragraph (2) by the merging UCITS is not complete, the Authority must, within 10 working days of receiving the information, request additional information from the UCITS.
(5) Where the receiving UCITS is an EEA UCITS, the Authority must transmit copies of the information supplied under paragraph (2) to the competent authorities of the receiving EEA UCITS.
(6) The Authority must consider the potential impact of the proposed merger on unit-holders of the merging UCITS to assess whether appropriate information is being provided to unit-holders.
(7) Where the Authority considers it necessary, it may require that the information to be provided to unit-holders of the merging UCITS be clarified.
(8) The Authority must make an authorisation order under paragraph (1) if the following conditions are satisfied—
(a)the requirements set out in this regulation and regulations 10 and 11 and in rules made by the Authority to implement Articles 40 and 41 of the UCITS directive have been complied with;
(b)the merger has been approved by unit-holders of the UK UCITS in accordance with rules made by the Authority;
(c)the receiving UCITS has given the Authority, or, in the case of an EEA receiving UCITS has given the competent authorities of its home Member State, notice of its intention to market its units in another EEA State and that notification has been transmitted under Article 93 of the UCITS directive to the competent authorities of those EEA States in which the merging UCITS is able to market its units; and
(d)the Authority and the competent authorities of any other merging EEA UCITS and of the receiving EEA UCITS are satisfied with the proposed information to be provided to unit-holders, or no indication of dissatisfaction has been received from the competent authorities of the receiving UCITS under paragraph 3 of Article 39 of the UCITS directive.
(9) The Authority must determine an application for authorisation of a merger under this regulation and inform the applicant of its decision within 20 working days of the date on which the Authority received the information required under paragraph (2), or the date on which the Authority received any further information requested under paragraph (4).
(10) The Authority must inform the competent authorities of a receiving EEA UCITS of its decision.
(11) The authorisation order must specify the date on which the merger shall take effect and the dates for calculating the exchange ratio of units of the merging UCITS into units of the receiving UCITS, and, where applicable, for determining the relevant net asset value for cash payments.
Modification of informationU.K.
10.—(1) Where the Authority has received information on a proposed merger as the competent authority for a receiving UK UCITS, it must consider the potential impact of the proposed merger on unit-holders of the receiving UCITS.
(2) Where the Authority considers it necessary, it may require the receiving UCITS to modify the information to be provided to its unit-holders.
(3) Any such requirement must be made in writing, not more than 15 working days after the date on which the Authority received the complete information required under regulation 9(2).
(4) Where the Authority imposes a requirement under paragraph (2), it must notify the competent authorities of the merging EEA UCITS, explaining the reasons for its dissatisfaction.
(5) Within 20 working days of the day on which it receives the modified information, the Authority must inform the competent authorities of the merging EEA UCITS whether it is satisfied with the modified information to be provided to unit-holders.
Report by depositary or auditorU.K.
11.—(1) A report must be drawn up in respect of a merging UK UCITS in accordance with this regulation validating—
(a)the criteria adopted for valuation of the assets and, where applicable, the liabilities on the date for calculating the exchange ratio referred to in Article 47(1) of the UCITS directive;
(b)where applicable, the cash payment per unit; and
(c)the calculation method of the exchange ratio as well as the actual exchange ratio determined at the date for calculating that ratio, as referred to in Article 47(1) of the UCITS directive.
(2) The report must be drawn up by—
(a)a depositary, or
(i)is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006 F45, and
(ii)satisfies the independence requirement in section 936 of the Companies Act 2006.
(3) The auditors of the merging UCITS and the receiving UCITS must be considered to be independent for the purposes of paragraph (2)(b)(ii).
(4) A copy of the report must be made available on request and free of charge to—
(a)the unit-holders of the merging UCITS and of the receiving UCITS, and
(b)the Authority and, in relation to a cross-border merger, the competent authorities of the EEA UCITS concerned.
F452006 c.46.
Right of redemptionU.K.
12.—(1) The unit-holders of the merging and the receiving UCITS may require their UCITS—
(a)to purchase or redeem any units they hold in either the merging or the receiving UCITS; or
(b)to convert any units they hold in either the merging or receiving UCITS into units of another UCITS which—
(i)has similar investment policies to those of the merging or receiving UCITS; and
(ii)is managed by the same manager or by a manager which is associated with that manager within the meaning of section 256 of the Companies Act 2006.
(2) The rights referred to in paragraph (1) shall become effective from the moment when the unit-holder is informed of the proposed merger in accordance with rules made by the Authority to implement Article 43 of the UCITS directive, and must cease five working days before the date on which the exchange ratio must be calculated under Article 47.1 of the directive.
(3) No charge may be made for the exercise of the rights in paragraph (1) except to enable the UCITS to meet disinvestment costs.
(4) Where one of the merging or receiving UCITS is a master UCITS within the meaning of section 237(3) of the Act, the master UCITS must enable its feeder UCITS to repurchase or redeem all the units of the master UCITS in which they have invested before the consequences of the merger become effective, unless the Authority approves the continued investment by the feeder UCITS in the UCITS resulting from the merger.
Consequences of a mergerU.K.
13.—(1) A merger by absorption must have the following consequences—
(a)all the assets and liabilities of the merging EEA UCITS are transferred to the receiving UK UCITS, or, where applicable, to the depositary of the receiving UK UCITS;
(b)all the unit-holders of the merging EEA UCITS become unit-holders of the receiving UK UCITS, and where applicable, they are entitled to a cash payment not exceeding 10 per cent of the net asset value of their units in the merging EEA UCITS; and
(c)the merging UCITS shall cease to exist on the entry into effect of the merger.
(2) A merger by formation of a new UCITS shall have the following consequences—
(a)all the assets and liabilities of the merging EEA UCITS are transferred to the newly constituted receiving UK UCITS, or, where applicable, to the depositary of the receiving UK UCITS;
(b)all the shareholders or members of the merging EEA UCITS become unit-holders of the newly constituted receiving UK UCITS and, where applicable, they are entitled to a cash payment not exceeding 10% of the net asset value of their units in the merging EEA UCITS; and
(c)the merging EEA UCITS shall cease to exist on the entry into effect of the merger.
(3) A merger by scheme of arrangement shall have the following consequences—
(a)the net assets of the merging UCITS are transferred to the receiving UCITS or, where applicable, the depositary of the receiving UCITS;
(b)all the shareholders or members of the merging UCITS become unit-holders in the receiving UCITS; and
(c)the merging UCITS continues to exist until all the liabilities have been discharged.
(4) Subject to paragraph (6) the consequences take effect—
(a)where an order has been made by the Authority under regulation 9, on the date specified in that order; or
(b)where an order authorising the merger has been made by the competent authority of another EEA State, on the date fixed in accordance with the law of that state.
(5) The receiving UCITS, or where applicable, the depositary of the receiving UCITS, must take such steps as are required by law (including by the law of another EEA State) to give effect to the transfer of the assets and liabilities of the merging UCITS.
(6) Where one of the merging or receiving UCITS is a master UCITS, the merger shall not take effect unless the master UCITS has provided the information specified under regulation 9(2) together with any additional information requested under regulation 9(4) (“the required information”) to all its unit-holders and to the competent authorities of each of its feeder UCITS at least 60 days before the planned effective date.
(7) A master UCITS will have complied with the obligation in paragraph (6) to provide information to all its unit-holders if it has sent the required information to each of the unit-holders (or in the case of joint unit-holders, to the first named unit-holder) whose name is entered in the register of unit-holders at the date on which the information is provided.
Publication of a mergerU.K.
14. The entry into effect of the merger must be published by the Authority in the record kept by the Authority under section 347 of the Act.
PART 5U.K.DIVISIONS
Division of a master UCITSU.K.
15.—(1) The interpretive provisions in regulation 7 shall apply to this Part.
(2) This Part applies where a master UCITS which has one or more feeder UCITS is divided into two or more UCITS.
(3) The division shall not take effect unless the master UCITS has provided information comparable to the information specified in regulation 9(2) in relation to the division (“the required information”) to all its unit-holders and to the competent authorities of each of its feeder UCITS at least sixty days before the day on which the division is planned to take effect.
(4) A master UCITS will have complied with the obligation in paragraph (3) to provide information to all its unit-holders if it has sent the required information to each of the unit-holders (or in the case of joint unit-holders, to the first named unit-holder) whose name is entered in the register of unit-holders at the date on which the information is provided.
(5) The master UCITS must enable its feeder UCITS to repurchase or redeem all the units of the master UCITS in which they have invested before the division becomes effective, unless the [F46Financial Conduct Authority] approves the continued investment by the feeder UCITS in the UCITS resulting from the division.
F46Words in reg. 15(5) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), art. 1(1), Sch. 2 para. 212(b)
[F47PART 5AU.K.DEPOSITARIES
F47Pts. 5A, 5B inserted (18.3.2016) by The Undertakings for Collective Investment in Transferable Securities Regulations 2016 (S.I. 2016/225), regs. 1, 3(3)
15A. The interpretative provisions in regulation 7 shall apply to this Part.
Depositary liability: general provisionsU.K.
15B.—(1) This regulation, and regulations 15C and 15D, apply in relation to the depositary of a UCITS.
(2) Any liability of the depositary to the UCITS, or to unit-holders of the UCITS, under regulation 15C or 15D is not affected by—
(a)any delegation by the depositary of its functions as referred to in Article 22a of the UCITS directive;
(b)any contractual provision that purports to exclude or limit the depositary’s liability for losses under regulation 15C or 15D; or
(c)any exclusion or limitation by agreement of the depositary’s liability for losses under regulation 15C or 15D.
(3) Any provision or agreement that falls within paragraph (2)(b) or (c) will be void.
(4) Any obligation or liability of a depositary under regulation 15C or 15D to the unit-holders of the UCITS may be invoked either directly or indirectly through the management company provided that this does not lead to a duplication of redress or to unequal treatment of unit-holders.
Depositary liability for loss of financial instruments held in custodyU.K.
15C.—(1) This regulation applies where a financial instrument held in custody in accordance with Article 22.5(a) of the UCITS directive by—
(a)the depositary, or
(b)a third party to whom custody of the financial instrument has been delegated or sub-delegated,
has been lost in the conditions or circumstances described in any directly applicable regulation made under Article 26b(f) of the UCITS directive.
(2) Subject to paragraph (3), the depositary is liable to the UCITS and to the unit-holders of the UCITS for loss of the financial instrument and must return a financial instrument of an identical type or the corresponding amount to the UCITS, or to the management company acting on behalf of the UCITS, without undue delay.
(3) The depositary is not liable under paragraph (2) nor is it required to comply with the obligation in that paragraph if it can prove that the loss has arisen as a result of an external event beyond the depositary’s reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary.
Depositary liability for other lossesU.K.
15D. If a UCITS, or unit-holders of a UCITS, have suffered losses other than a loss of a financial instrument referred to in regulation 15C, the depositary is liable to the UCITS or to the unit-holders of the UCITS for those losses, if the losses are as a result of the depositary’s negligent or intentional failure to comply with any implementing provision that applies to it.
PART 5BU.K.REQUIREMENTS ON THE FINANCIAL CONDUCT AUTHORITY
15E. The interpretative provisions in regulation 7 shall apply to this Part.
FCA requirement to share depositary informationU.K.
15F. If the FCA receives information—
(a)from the depositary of—
(i)an EEAUCITS managed by a UK management company or an EEA management company, or
(ii)a UKUCITS managed by an EEA management company;
(b)which the depositary has obtained while performing its duties as the depositary of the EEAUCITS or UKUCITS; and
(c)which may be necessary for the competent authority of the EEAUCITS or the EEA management company;
the FCA must share such information with that competent authority without delay.
FCA’s ability to refuse to act on requests for informationU.K.
15G. The FCA may only refuse to act on a request for information or a request to cooperate with an investigation into possible infringements of the UCITS directive from a competent authority of an EEAUCITS or an EEA management company, where—
(a)communication of the relevant information may adversely affect the security of the United Kingdom, in particular the fight against terrorism or other serious crimes;
(b)compliance with the request is likely to affect adversely the FCA’s own investigation, enforcement activities, or where applicable, a criminal investigation;
(c)judicial proceedings have already been initiated in respect of the same actions and against the same persons before the courts of the United Kingdom; or
(d)a final judgment has already been delivered in relation to such persons for the same actions in the United Kingdom.
Reporting of infringementsU.K.
15H. The FCA must establish specific procedures for the receipt and follow-up of reports on potential or actual infringements of any implementing provision, in accordance with Article 99d of the UCITS directive.
Disclosure of information regarding penaltiesU.K.
15I. The FCA must provide ESMA annually with aggregated information regarding all penalties and measures imposed in accordance with Article 99 of the UCITS directive.]
PART 6U.K.CONSEQUENTIAL AMENDMENTS AND REVIEW
16. The Schedule contains consequential amendments.
17.—(1) Before the end of each review period, the Treasury must—
(a)carry out a review of regulations 2 to 15,
(2) In carrying out the review the Treasury must, so far as is reasonable, have regard to how the UCITS Directive is implemented in other Member States.
(a)set out the objectives intended to be achieved by the regulatory system established by regulations 2 to 15,
(a)the period of five years beginning with the day on which regulations 2 to 15 come into force, and
SCHEDULEU.K.CONSEQUENTIAL AMENDMENTS
The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001U.K.
1.—(1) The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 F48 is amended as follows.
(2) In article 3(1), for the definition of “management company” substitute—
“management company” has the meaning given by Article 2.1(b) of the UCITS directive;”.
(3) In article 83(4)(b), for “Article 5(3)” substitute “ Article 6(3) ”.
(4) In article 84(1D)(b) for “Article 5(3)” substitute “ Article 6(3) ”.
(5) In article 85(4)(b) for “Article 5(3)” substitute “ Article 6(3) ”.
F48S.I. 2001/544, amended by S.I. 2006/3384; there are other amending instruments but none are relevant.
The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001U.K.
2.—(1) The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes)(Exemptions) Order 2001 F49 is amended as follows.
(2) In article 10A(3), for “Article 4” substitute “ Article 5 ”.
(3) In article 30, for the words “(notice indicating” to the end of the article, substitute “ (notice indicating the existence of grounds for refusal of an application for authorisation) ”.
F49S.I. 2001/1060, amended by S.I. 2002/2157 and 2003/2067. There are other amending instruments but none are relevant.
The Electronic Commerce Directive (Financial Services and Markets) Regulations 2002U.K.
3.—(1) The Electronic Commerce Directive (Financial Services and Markets) Regulations 2002 F50 are amended as follows.
(a)in the definition of “UCITS Directive” for “Directive 85/611/EEC of the Council of the European Communities of 20 December 1985” substitute “ Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 ”;
(b)in the definition of “UCITS Directive Scheme” for “Article 4” substitute “ Article 5 ”.
F50S.I. 2002/1775. There are amending instruments but none are relevant.
The Reporting of Savings Income Information Regulations 2003U.K.
4.—(1) The Reporting of Savings Income Information Regulations 2003 F51 are amended as follows.
(2) In regulation 2(1), in the definition of “the UCITS Directive”, for “Council Directive 85/611/EEC of 20th December 1985” substitute “ Council Directive 2009/65/EC of 13th July 2009 ”.
F51S.I. 2003/3297. There are amending instruments but none are relevant.
The Financial Conglomerates and Other Financial Groups Regulations 2004U.K.
5.—(1) The Financial Conglomerates and Other Financial Groups Regulations 2004 F52 are amended as follows.
(2) In regulation 1(2), in paragraph (c) of the definition of “regulated entity”—
(a)for “Article 1a(2)” substitute “ Article 2.1(b) ”, and
(b)for “Article 5”, substitute “ Article 6 ”.
F52S.I. 2004/1862, amended by S.I. 2004/1862, 2006/3221, 2007/126.
The Montserrat Reporting of Savings Income Information Order 2005U.K.
6.—(1) The Montserrat Reporting of Savings Income Order 2005 F53 is amended as follows.
(2) In article 3(1), in the definition of “the European UCITS Directive”, for “Council Directive 85/611/EEC of 20th December 1985” substitute “ Council Directive 2009/65/EC of 13th July 2009 ”.
F53S.I. 2005/1466.
7.—(1) The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 F54 is amended as follows.
(2) In article 20B, for paragraph (3), substitute—
“(3) In this article, “UCITS directive scheme” means an undertaking for collective investment in transferable securities which is subject to Directive 2009/65/EC of the European Parliament and of the Council of 13th July 2009 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities and has been authorised in accordance with Article 5 of that Directive.”
(3) In Schedule 1, in paragraph 21(4)(b), for “Article 5(3)” substitute “ Article 6(3) ”.
F54S.I. 2005/1529. Article 20B was inserted by S.I. 2002/2157.
The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009U.K.
8.—(1) The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 F55 is amended as follows.
(2) In article 2, in paragraph (c) of the definition of “relevant UK authorised person”, for “Article 1a.2” substitute “ Article 2.1(b) ”.
F55S.I. 2009/774.
F56F57F58These Regulations implement in part Directive 2009/65/EC of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS”) (“the UCITS directive”), and certain of the obligations in Commission Directives 2010/43/EU (and 2010/44/EU ). A transposition note setting out how the main elements of these Directives will be transposed into UK law will be available on HM Treasury's website (www.hm-treasury.gov.uk).
Regulation 2 of these Regulations amends the Financial Services and Markets Act 2000 as it applies to collective investment schemes which are UCITS.
Paragraph (3) inserts a new section limiting the liability which may arise in relation to key investor information (section 90ZA).
Paragraph (8) revises the conditions which must be satisfied before the Financial Services Authority (“FSA”) is able to exercise its powers of intervention in relation to a EEA management company or UCITS, by substituting section 195A.
Paragraph (10) inserts section 199A, imposing an obligation on the FSA to take action to safeguard investors in the United Kingdom where the authorisation of an EEA management company is withdrawn.
Paragraph (13) clarifies the definition of “relevant person” for the purposes of section 213 of the Financial Services and Markets Act 2000.
Paragraph (14) inserts new definitions into section 237.
Paragraphs (15) and (16) amend sections 243 and 244 respectively, to revise the conditions which must be satisfied before a UCITS may be authorised and require the FSA to determine applications for authorisation of unit trust schemes which are UCITS within two months.
Paragraphs (19), (21), (23) and (26) make provision for master and feeder UCITS. Paragraph (19) sets out the procedure which will apply to any proposal by a UCITS to cease being a feeder UCITS (new section 252A). Paragraph (21) provides for the consequences where a master UCITS which has one or more feeder UCITS is wound up (new section 258A). Paragraph (23) inserts new sections 261A and 261B, which set out the circumstances in which the FSA is required to provide information to home state regulators of EEA UCITS, or the operators of authorised unit trust schemes which are feeder UCITS. Paragraph (26) inserts new section 283A, requiring approval of significant investments by a UCITS in another UCITS (the master UCITS), and new section 283B, requiring management companies to provide periodic reports to the FSA about any investment in derivative instruments made by UCITS under their management.
Paragraph (28) inserts new section 351A, which enables depositaries and auditors of master and feeder UCITS to enter into information sharing agreements as required by the UCITS directive, and ensures that they are exempt from liability in relation to disclosures made under those agreements.
Paragraph (30) repeals section 409(1)(e) of the Act, removing the Treasury's power to provide for the Authority to give notice under section 264(2) on grounds relating to the law of Gibraltar.
Paragraph (33) amends Schedule 3 to set out the circumstances in which the FSA may reject an application by an EEA management company to manage a UK UCITS, the procedure applying to such applications, and what information must be given to the home state regulator of the management company (paragraphs 15A, 15B and 15C). Paragraphs 19 and 20 are amended (and paragraph 20ZA inserted) to set out the conditions which must be satisfied by a UK management company wishing to provide services in another Member State, and the obligations the FSA must meet in such a case. New paragraphs 26 to 28 impose obligations on the FSA to provide information to the home state regulator of the EEA UCITS managed by a UK management company in certain circumstances, and to consult with that regulator before withdrawing authorisation from the management company. New paragraph 20B sets out the conditions to be satisfied before a UK UCITS is able to market its units in another Member State.
Regulation 3 amends the Open-ended Investment Companies Regulations 2001 to ensure that the amendments made to the Financial Services and Markets Act 2000 in relation to authorised unit trusts also apply in relation to open-ended investment companies.
Regulation 4 amends the Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001 to ensure that the definitions in those Regulations reflect the provisions of the UCITS directive, and to clarify the authorised activities in relation to which an EEA management company exercising rights in this country is subject to the compensation scheme.
Regulation 5 amends the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 to ensure that those Regulations apply to information received by the Authority in the course of the exercise of its functions as competent authority under the UCITS directive.
Regulation 6 amends the Financial Services and Markets Act 2000 (Collective Investment Schemes Constituted in Other EEA States) Regulations 2001 to make transitional provision for the use of simplified prospectuses until 30th June 2012.
Regulations 7 to 14 implement the UCITS directive provisions in relation to mergers of UCITS. Regulation 15 makes provision in relation to divisions. Regulation 16 and the Schedule make consequential amendments to other secondary legislation.
Regulation 17 requires the Treasury to review the operation and effect of these Regulations within five years after they come into force and within every five years after that. Following a review it will fall to the Treasury to consider whether the Regulations should remain as they are, or be revoked or be amended. A further instrument would be needed to revoke the Regulations or to amend them.
An Impact Assessment of the effect that these Regulations will have on the costs of business and the voluntary sector is available on HM Treasury's website (hm-treasury.gov.uk) and is published with the Explanatory Memorandum alongside these Regulations on the legislation.gov.uk website.