Investment management update - December 2020

21 December 2020

Welcome to the December 2020 edition of our investment management update. This publication has been tailored to highlight topical news, cases and changes in the law which impact the investment management sector.

Key things to keep an eye out for in this month's update include:

  • joint HM Treasury, FCA and PRA statement on timings for implementing IFPR and CRR II;
  • FCA directory persons data live on Financial Services Register;
  • FCA statements and consultations on approach to new UK BMR powers and LIBOR transition; and
  • FCA responds to Treasury announcement on equivalence.




Official translations of ESMA guidelines on performance fees in UCITS and certain types of AIFs

On 5 November 2020, ESMA published a webpage with official translations, including the English version, of its guidelines on performance fees in UCITS and certain types of alternative investment funds (AIFs). The guidelines apply from two months after the date of their publication on ESMA's website in all EU official languages i.e. 5 January 2021.

The guidelines apply to fund managers and national competent authorities (NCAs). They aim to promote convergence in the way that NCAs supervise performance fee structures and the circumstances in which performance fees can be paid.

Managers of any new funds created after 5 January 2021 with a performance fee, or any funds existing before that date that introduce a performance fee for the first time after that date, should comply with the guidelines immediately in respect of those funds. Managers of funds with a performance fee existing before 5 January 2021 should apply the guidelines in respect of those funds by the beginning of the financial year following six months from 5 January 2021.

NCAs must notify ESMA whether they comply, or intend to comply, with the guidelines by 5 January 2021.

FCA speech on the climate challenge and regulatory initiatives

On 9 November 2020, the FCA published a speech by Nikhil Rathi, FCA Chief Executive, about rising to the climate challenge. Mr Rathi explained that the FCA wants green and sustainable finance to be at the heart of growing London as a global financial centre and that good financial regulation will be key to facilitating the transition to a less carbon-intensive economy. He indicated that the FCA is ready to support the UK Government to fulfil its commitment to at least match the ambition of the EU sustainable finance action plan in the UK.

Key themes from the speech include:

  • transparency – the FCA confirmed that it will introduce a new rule that will require premium listed companies to include statements about Task Force on Climate-related Financial Disclosures (TCFD) recommendations from 1 January 2021 following its March 2020 consultation. Work will be done in 2021 to extend the scope of the rule to move towards mandatory disclosure. The FCA is also aiming to bring in TCFD-related rules for asset managers, life insurers and FCA-regulated pension providers by 2022, following a consultation in the first half of 2021;
  • trust – the FCA wants to ensure that consumers can trust sustainable products. The FCA has been considering measures to combat potential “greenwashing” in the investment funds space. It has also developed a set of principles to help firms interpret existing rules requiring that disclosures are fair, clear and not misleading, including when they submit new products to the FCA for authorisation. The FCA plans to discuss these principles with industry with a view to finalising them in early 2021. The FCA also plans to run consumer experiments to better understand what information influences consumers choices in sustainable products; and
  • tools – over the next year, the Climate Financial Risk Forum will look to refine and develop the recommendations contained in its June 2020 guide. Thematic work on metrics, data and methodologies is planned.

The Government has announced that it intends to make it mandatory for large companies and financial institutions across the UK economy to make climate-related disclosures aligned with the recommendations of the TCFD by 2025.

The TCFD has published an interim report and roadmap setting out an indicative path over the next five years towards mandatory climate-related disclosures. It anticipates that a significant part of the mandatory requirements will be in place by 2023.

ESMA consults on guidelines for funds' marketing communications

On 9 November 2020, ESMA published a consultation paper on draft guidelines for funds' marketing communications under Article 4 of the Regulation on the cross-border distribution of collective investment undertakings. The draft guidelines are set out in Annex IV to the consultation paper. Comments can be made until 8 February 2021. ESMA will issue the final guidelines by 2 August 2021.

The purpose of the draft guidelines is to specify the requirements for marketing communications sent to investors to promote UCITS and AIFs, including European social entrepreneurship funds (EuSEFs), European venture capital funds (EuVECAs) and European long-term investment funds (ELTIFs).

The requirements are that the material must:

  • be identifiable as marketing material;
  • describe the risks and rewards of purchasing units or shares of an AIF, or units of a UCITS, in an equally prominent manner; and
  • contain information that is fair, clear and not misleading.

Only fund managers will be subject to the guidelines. Distributors, such as investment firms, will not be subject to the guidelines as such, although they may have to apply other rules governing the information issued to investors or potential investors.

ESMA annual reports on penalties and measures issued under UCITS Directive and AIFMD: November 2020

On 12 November 2020, ESMA published its third annual report on penalties and measures issued under the UCITS Directive in 2019, and its first annual report on penalties and measures issued under the AIFMD in 2018 and 2019.

In the report on sanctions imposed under the UCITS Directive, ESMA provided an overview of the applicable legal framework and information on the sanctions imposed by NCAs from 1 January 2019 to 31 December 2019. Overall, 11 NCAs imposed a total of 43 penalties. The total aggregated value of financial penalties imposed amounted to approximately 4,155,000. Nine NCAs imposed a total of 19 measures. 16 NCAs did not impose any sanction (penalty or measure) during this period.

In the report on sanctions imposed under the AIFMD, ESMA provided information on the penalties and measures imposed by NCAs from 1 January 2018 to 31 December 2018 and from 1 January 2019 to 31 December 2019. During the 2018 reporting period, 11 NCAs imposed a total of 63 penalties. The total aggregated value of financial penalties imposed amounted to approximately 4,459,000. Ten NCAs imposed a total of 34 measures. 17 NCAs did not impose any sanction during this period. During the 2019 reporting period, 13 NCAs imposed a total of 45 penalties. The total aggregated value of financial penalties imposed amounted to approximately 9,000,000. 12 NCAs imposed a total of 42 measures. 14 NCAs did not impose any sanction during this period.

In both reports, ESMA commented that the data gathered shows that the sanctioning powers are not equally used among NCAs and, apart from a few NCAs, the number and amount of sanctions issued at national level seems relatively low.

Joint HM Treasury, FCA and PRA statement on timings for implementing IFPR and CRR II

On 16 November 2020, HM Treasury published a statement made jointly with the FCA and the PRA on the introduction of the Investment Firms Prudential Regime (IFPR) and the implementation of Basel standards reflecting the CRR II Regulation.

HM Treasury, the FCA and the PRA (the Authorities) have decided to set a target implementation date of 1 January 2022 for these reforms. They indicate that the target implementation date for the final Basel III reforms will remain 1 January 2023.

The Authorities had previously indicated that the IFPR and CRR II reforms would be implemented in summer 2021, in line with their EU equivalents. They state that they decided to set the revised implementation date in response to feedback from industry relating to these specific proposals and in response to the September 2020 Regulatory Initiatives Grid, where industry raised concerns about the general volume of regulatory reform in 2021.

FCA warns firms to comply with client data responsibilities

On 18 November 2020, the FCA published a press release warning firms of the need to be responsible when handling client data. Although the FCA’s warning comes in the context of firms potentially leaving the market or merging with other firms in response to the current economic climate, it is of general value for all firms handling client data.

The FCA reminded firms of the need to consider the Principles for Businesses, in particular Principles 3 (Management and control), 6 (Customers' interests) and 7 (Communications with clients).

The FCA stated that firms should also ensure that they comply with their obligations under data protection legislation including the Data Protection Act 2018, the General Data Protection Regulation and the Privacy and Electronic Communications Regulations. They should also comply with related guidance published by the Information Commissioner's Office.

The FCA explained that it will act where it identifies breaches of the FCA Handbook requirements. It also indicated that it expects firms that intend to transfer or receive personal client data to be able to demonstrate how they have considered the fair treatment of consumers and how their actions comply with data protection and privacy laws.

FCA consults on changes to policy on raising regulated fees and levies from 2021/22

On 19 November 2020, the FCA published a consultation paper on proposed policy changes to the way it will raise regulated fees and levies rates for 2021/22 (CP20/22). The consultation applies to any businesses considering applying for FCA authorisation or registration, and any existing fee-payers which may vary their permissions, are considering a change in control or are making appointments subject to the senior managers regime.

Among other things, the FCA proposes to introduce new charges for change in control applications (£500), and applications under the Senior Managers Regime (£250).

The deadline for comments on CP20/22 is 22 January 2021. The FCA plans to publish its response and the final fee rates and levy rules in a Handbook Notice in March 2021.

FCA clarifies investment managers' options for reporting income for FSCS levy calculations

On 19 November 2020, the FCA published a new webpage for investment managers, clarifying the process for reporting income for Financial Services Compensation Scheme (FSCS) levy calculations under Chapter 6 of the Fees manual (FEES 6). The clarification comes as the FCA has become aware that some firms may be reporting income for the FSCS levy that they do not need to report. The FCA webpage provides an example to illustrate the requirements.

The FCA explained that, when calculating annual eligible income there are two options: to only include such annual income if it is attributable to business in respect of which the FSCS may pay compensation, or include all such annual income. This means that firms must include income they know relates to eligible claimants, and income that may relate to eligible claimants. If the firm cannot identify whether the underlying beneficiary is an eligible claimant, income derived from that business must be included, because the FSCS may pay compensation in relation to it.

The FCA further clarified that, if the firm can identify income that relates to beneficiaries who are not eligible claimants, that income can be excluded. In any case, a firm can report all income if it chooses to do so.

HM Treasury, BoE and FCA to convene working group to facilitate investment in productive finance

On 20 November 2020, the FCA published a press release announcing that it, HM Treasury and the Bank of England (BoE) intend to convene a working group to facilitate investment in productive finance.

The FCA stated that investment in productive finance refers to investment that expands productive capacity, furthers sustainable growth and can make an important contribution to the real economy, such as plant and equipment, research and development, technologies, infrastructure and unlisted equities related to these sectors.

The working group's mandate will be to agree the necessary foundations that could be implemented by firms and investment platforms to facilitate investment in long-term assets by a wide range of investors. Its aim is to propose:

  • solutions for barriers to investment to be implemented by industry participants. This includes considering potential fund structures, such as the long-term asset fund, that will invest viably in long-term assets and that meet the demands of a wide range of investors, including defined contribution pension funds; and
  • a roadmap, timetable and set of actions to implement those solutions.

The working group’s membership will be drawn from market participants including banks, asset management firms, pension funds, insurance companies, investment platforms and trade associations representing relevant sectors and markets.

FCA directory persons data live on Financial Services Register

On 23 November 2020, the FCA updated its webpage on the Financial Services Register to confirm that the directory persons data submitted by dual-regulated firms under the Senior Managers and Certification Regime is now live.

The FCA reminded solo-regulated firms that they must submit their directory persons data via Connect by 31 March 2021 using the single-entry submission form. Earlier dates will apply if solo-regulated firms wish to use the multiple entry submission form, or if they wish their data to appear from earlier dates starting in December 2020. In particular, firms submitting:

  • before the earliest publication date should submit their data between 26 November and 4 December 2020. Firms can use the single submission form to submit up to 9 December 2020 and their data will appear from mid-December 2020; and
  • after the earliest publication date, but before the 31 March 2021 deadline, should submit data between 11 January and 18 March 2021.

The FCA will begin to display incrementally data from solo-regulated firms as it is submitted, starting from 14 December 2020.

FCA speech on building trust in sustainable investments

On 23 November 2020, the FCA published a speech by Richard Monks, FCA Director of Strategy, on building trust in sustainable investments.

In the speech, Mr Monks explained how sustainability factors are increasingly influencing consumer decision-making. Consumers should be able to trust the products they are offered and rely on them to perform as they expect.

Mr Monks explained that the FCA is considering whether it would be helpful to articulate a set of guiding principles to help firms with environmental, social and governance (ESG) product design and disclosure. This could help address the FCA's concerns and ensure that consumers are protected from potential greenwashing. The FCA has five areas for potential principles in mind.

  • Consistency in messaging and approach: a product's ESG focus should be clearly stated in its name, and then reflected consistently in its objectives, investment strategy and holdings.
  • A product's ESG focus should be clearly and fairly reflected in its objectives: where a product claims to target certain sustainability characteristics, or a real-world sustainability impact, its objectives should set these out in a clear and measurable way.
  • A product's documented investment strategy should set out clearly how it will meet its sustainability objectives: this should describe clearly any constraints on the investible universe, including any screening criteria and anticipated portfolio holdings. This should also include the fund's stewardship approach and actions the fund manager will take if investee companies are failing to make the desired progress.
  • The firm should report on an ongoing basis its performance against its sustainability objectives: this is to give consumers the information they need to understand whether the stated objectives have been achieved in a quantifiable and measurable way.
  • The firm should ensure ESG data quality, understand its source and derivation, and articulate clearly and accessibly how it is used.
FCA speech on business of social purpose

On 26 November 2020, the FCA published a speech by Jonathan Davidson, FCA Executive Director of Supervision: Retail and Authorisations, on the business of social purpose.

Points of interest in Mr Davidson's speech include:

  • culture remains a key area of focus for the FCA. There is a growing consensus that healthy cultures are purposeful, diverse and inclusive. Diversity and inclusion are multi-faceted issues that require serious thought and attention. It is clear effective action must be taken quickly for financial services to become an industry that is truly reflective of the people it serves;
  • in recent years, the FCA has increased its focus on non-financial misconduct because a culture where this is tolerated is not healthy, safe or acceptable;
  • many firms across the sector have embraced purpose, from the CEO to the front-line. Employee trust in senior management has been reciprocated by senior management trust and empowerment of middle management. Firms have successfully acted quickly and responsively to the unprecedented need for radical changes, including the move to home working; and
  • this crisis has shown that the financial services sector can be trusted to fulfil its purpose of providing support to consumers and small businesses and keeping the economy going. Financial services firms are in the business of social purpose, which increasingly matters to consumers, employees and shareholders: people want to engage with, work for and invest in, firms that are purposeful.


FCA updates information on senior manager accountability and working from home

On 9 November 2020, the FCA published updated information about the Covid-19 pandemic and workplace arrangements.

The FCA's statement explained that firms should continue to follow relevant Covid-19 pandemic guidance from the Government to ensure they comply with any restrictions. In particular, firms should refer to the guidance about working from home if possible and ensuring safe workplaces for those who cannot work from home.

The statement recommended that the chief executive officer senior management function (SMF1) is accountable for ensuring an adequate process for following and adhering to government guidance. For firms that do not have an SMF1, this will be the most relevant member of the senior management team.

ECON publishes report on proposed Directive amending MiFID II Directive

On 18 November 2020, the European Parliament's Committee on Economic and Monetary Affairs (ECON) published its report on the proposal for a Directive amending the MiFID II Directive as regards information requirements, product governance and position limits to help the recovery from the Covid-19 pandemic.

The proposal aims to amend the information requirements in the MiFID II Directive by reducing some of the administrative burden around the provision of information to clients and also relaxes product governance requirements. Changes are also proposed to the commodity derivatives markets regime and the research regime.

While the main objective of the proposed changes is to create the best environment for European economies to recover from the Covid-19 pandemic, the European Commission explained in its legislative proposal for the draft Directive that a number of the existing rules were already unnecessary or perceived as overly burdensome. The Covid-19 pandemic has therefore made it even more important to reduce regulatory burdens on firms where they are not strictly necessary.

ECON announced that it had adopted the report on 29 October 2020. The procedure file for the legislative initiative indicates that the report will be considered by the European Parliament in its plenary session between 23 and 26 November 2020.

Asset Management Taskforce report on integrating stewardship into investment process

On 24 November 2020, the Investment Association published a report, produced by the Asset Management Taskforce, on placing stewardship at the heart of sustainable growth post-Covid-19.

The report set out 20 recommendations, which apply across the investment chain, designed to further enhance the UK's stewardship regime. In particular, the recommendations aim to ensure that asset managers are focused on delivering long-term, sustainable benefits for investors, the economy, the environment and society.

The proposals are designed to help market participants, such as investment managers and asset owners, to expand their stewardship activity across different asset classes (including bonds), and create a Council of UK Pensions Schemes to support higher standards of pension stewardship. The Taskforce explained that achieving the aims set out in the report will require action across three main pillars:

  • strengthening stewardship behaviour, which includes practical steps to further develop how stewardship works in practice;
  • stewardship for clients and savers, by generating sustainable value and achieving savers' goals; and
  • creating an economy wide-approach to stewardship.

The recommendations highlighted the connection between investment decisions and climate change and sustainability considerations. They also strengthen the relationship between savers' broader investment goals and their financial returns.


FCA statements and consultations on approach to new UK BMR powers and LIBOR transition

On 18 November 2020, the FCA published a statement on amendments to be made to the UK Benchmarks Regulation (UK BMR) by the Financial Services Bill 2019-21. It also published consultations on its proposed approach to designating benchmarks under new Article 23A of the UK BMR and imposing requirements on the administrator of a critical benchmark under new Article 23D.

Under new Article 23A, the FCA would have the ability to designate a critical benchmark as an Article 23A benchmark, which would result in a general prohibition on use of the benchmark by supervised entities. New Article 23A also gives the FCA the power to exempt some or all existing use of the benchmark from this general prohibition. The provisions of Article 23D grants the FCA the ability, in certain circumstances, to impose requirements on the administrator of a critical benchmark designated under new Article 23A.

Following the announcement by ICE Benchmark Administration, also made on 18 November 2020, that it will consult on its intention that the euro, sterling, Swiss franc and yen LIBOR panels will cease at the end of 2021, the FCA has also published a statement on its approach to the use of its powers under UK BMR to ensure an orderly wind down of LIBOR.

New FCA webpage on UK benchmarks register

On 1 December 2020, the FCA published a new webpage on the UK benchmarks register.

As the FCA has previously announced, in preparation for the end of the Brexit transition period on 31 December 2020, it has developed a new UK benchmarks register to replace the ESMA benchmarks register for UK supervised users, and UK and third country-based benchmark administrators that want their benchmarks to be used in the UK.

The UK benchmarks register will be accessible from 11.00pm on 31 December 2020, in the "Other registers" section of the Financial Services Register. It will have a search facility to help locate a specific administrator or benchmark. It will also be possible to download details of third country benchmarks as .csv documents.

The UK benchmarks register will comprise the following two sections:

  • the benchmark administrator register: a public record of all benchmark administrators that are authorised, registered or recognised by the FCA, or that benefit from an equivalence decision adopted by the UK; and
  • the third country benchmarks register: a public record of all benchmarks provided by third country benchmark administrators that are recognised by the FCA, endorsed by a UK-authorised or registered benchmark administrator (or other supervised entity) for use in the UK, or provided by benchmark administrators that have notified the FCA they benefit from an equivalence decision adopted by the UK.


FCA statement on approach to share trading obligation under MiFIR after transition period

On 4 November 2020, the FCA published a statement about its approach to the share trading obligation under the Markets in Financial Instruments Regulation (MiFIR) after the end of the transition period.

The FCA will use its temporary transitional power (TTP) to allow firms to continue trading all shares on EU trading venues and systematic internalisers (SIs) where they choose to do so, and where the regulatory status of those venues and SIs permits such activity. However, it will monitor market developments closely and review its use of the TTP if conditions change. It also remains open to dialogue with ESMA.

The FCA explained that this approach will preserve UK-based firms' ability to execute their share trades at the venues where they can get the best outcomes for themselves and their customers. It will also mean firms do not have to change their systems for trading shares during a period where minimising unnecessary operational disruption will be important.

Under this approach, all EU trading venues that continue to have UK participants or undertake relevant regulated activity in the UK from the end of the transition period will need to be:

  • a UK recognised overseas investment exchange;
  • using the temporary permissions regime; or
  • certain that their activities meet all the conditions required to benefit from the overseas persons exclusion.

The FCA will discuss with market participants and trading venues the future steps that may be needed to protect the integrity of UK markets and to ensure that UK participants can continue to achieve high standards of execution for their clients, including when trading EU-27 shares. These discussions will include whether the MiFID II calibrations remain appropriate for the UK in the absence of its current equivalence being recognised.

On 2 December 2020, the FCA published a draft transitional direction, together with an explanatory note, for the share trading obligation MiFIR. The direction will take effect from the end of the transition period (that is, 11.00pm on 31 December 2020) and may be varied or revoked.

New FCA webpage with Brexit information from EEA regulators

On 6 November 2020, the FCA published a new webpage providing links to dedicated Brexit websites hosted by NCAs in EEA member states.

The FCA suggested that if firms do business in the EEA, they may also want to check with the relevant EEA regulators whether the NCAs in that jurisdiction are planning any transitional measures or discuss the implications of any of the schemes listed with them.

The FCA stressed that it cannot comment on the accuracy or completeness of the information on the websites, given these are matters for the NCAs in EEA member states. It therefore suggested that firms check with their trade association or get independent legal advice for further clarification.

The FCA noted that the list is not exhaustive, and it will update it when it has more information.

FCA responds to Treasury announcement on equivalence

On 9 November 2020, the FCA responded to the Treasury’s intention to take equivalence decisions in respect of EEA states across a number of financial services areas. These decisions will come into effect at the end of the transition period.

The FCA summarised the decisions where it is the lead regulator as well as what the decisions means for firms.

These decisions include:

  • EMIR (Article 13) – Intragroup transactions exemption. Under this decision, UK firms will be able to apply for the margining and/or clearing exemption for intragroup transactions where their intragroup counterparty is located in the EEA and, if granted, may benefit from the exemption on a non-time limited basis. However, UK firms will still need to be aware that their EEA intragroup counterparties may not be entitled to reciprocal exemptions under the EU EMIR requirements and should check the position on this;
  • EMIR (Article 2A) – Regulated markets. Under this decision, UK firms will be able to consider EEA trading venues as regulated markets under Article 2A of UK EMIR. This confirms the classification of derivative transactions on these markets in relation to requirements under UK EMIR; and
  • Short Selling Regulation (SSR) (Article 17) – Market making exemption. Under this decision, EEA firms who have not previously submitted a notification for a market maker exemption under UK SSR can now do so without needing to be a member of a UK trading venue and can, instead, submit a notification to us based on being a member of an EEA trading venue.

In some cases, firms will have to take action to benefit from the equivalence provisions. The FCA’s response sets out the steps firms need to take.

The Treasury also published a guidance document for the UK’s equivalence framework for financial services.

FCA expectations of EEA firms preparing for end of Brexit transition period

On 11 November 2020, the FCA updated its webpage on firms' preparations for the end of the transition period to set out considerations for EEA firms conducting business in the UK.

The FCA stated that it expects EEA firms that are not intending to take advantage of the temporary permissions regime or the financial services contracts regime to notify the FCA of their plans by contacting it directly or through their usual supervisory contacts. It also emphasised that it expects firms to treat customers fairly, including when considering what notice to provide and what support customers need to make alternative arrangements.

FCA speech on getting ready for a new environment at the end of the transition period

On 12 November 2020, Nausicaa Delfas, Executive Director of International, delivered a speech on the future challenges and priorities facing the FCA. The FCA noted that, even if a deal is agreed with the EU, it should not be assumed that it will mitigate outstanding risks in financial services.

Key highlights from the speech include:

  • a summary of the preparatory measures put in place by the FCA, such as its approach to the share trading obligation, its response to the Treasury’s equivalence decisions, updates to the Handbook and use of the TTP;
  • the need for a “resetting” of financial services regulation in the UK, as evidenced by the Treasury’s review of the future regulatory framework and the introduction of the Financial Services Bill;
  • the FCA’s commitment to remaining at the forefront of developing and maintaining high-quality international standards; and
  • the FCA’s commitment to ensuring the UK’s regime remains robust and open and continues to allow trade and market access internationally.

On 1 December 2020, the FCA published a press release reminding firms to be ready for the end of the Brexit transition period and setting out the key issues they need to focus on, in particular, preparing for the end of passporting and for the new UK financial services landscape.

New FCA webpage on adding new sub-fund to umbrella scheme in TMPR

On 3 December 2020, the FCA published a new webpage on adding a new sub-fund to an umbrella scheme that will be in the temporary marketing permissions regime (TMPR). The new regime applies to sub-funds authorised on or after 31 December 2020. Sub-funds authorised by their relevant home state regulator before this date must be included in a fund manager's TMPR notification.

The Collective Investment Schemes (Amendment etc) (EU Exit) Regulations 2019 (CIS Regulations) create a UK-wide TMPR for UCITS funds that were already passporting into the UK before 11.00pm on 31 December 2020. The CIS Regulations also extend this regime to new sub-funds.

To use the regime, a sub-fund must satisfy the conditions specified in regulation 63(3) of the CIS Regulations, namely:

  • the new sub-fund must become authorised by its home state regulator on or after 31 December 2020;
  • when the new sub-fund becomes authorised by its home state regulator, at least one other sub-fund of the new sub-fund's umbrella scheme must be a recognised scheme in the TMPR;
  • after the new sub-fund becomes authorised by its home state regulator and while at least one other sub-fund of the umbrella scheme continues to be so authorised, the operator of the new sub-fund must have notified the FCA that they wish the new sub-fund to enter the TMPR; and
  • the notification must be given before the start of the period specified by the FCA directing the new sub-fund's umbrella scheme to apply for individual recognition under section 272 of the Financial Services and Markets Act 2000.

The FCA plans to give a direction on 31 December 2020, under regulation 64 of the CIS Regulations, setting out the information required to make a valid notification of a new sub-fund.

The webpage includes links to the draft direction and draft notification letter published by the FCA. These documents are subject to change and for information purposes only.