Following our previous market update on the UK's Overseas Fund Regime ("OFR") we can now confirm that the UK Government has published the Financial Services Act 2021 (Commencement No. 4) Regulations 2022 (the "Regulations") bringing the OFR into effect on 23 February 2022.
The OFR will allow collective investment schemes authorised in approved countries, including EU UCITS to market in the UK based on a comparison of HM Treasury’s overall view of the other country’s regulatory regime. We expect that both Ireland and Luxembourg will qualify with the equivalence regime and that the OFR will be the immediate route to allow Irish and Luxembourg domiciled UCITS to target retail investors.
The Financial Conduct Authority ("FCA") have not yet published any additional information surrounding the process for applying to the OFR (including allocation of landing slots for UCITS opted into the Temporary Permissions Regime) or indeed a list of approved countries. As such, notwithstanding the publication of the Regulations, the full requirements remain outstanding and the OFR regime is therefore not yet fully operational.
The Regulations have brought into effect the following provisions of the Financial Services Act 2021:
- (a) Section 24 and Schedule 9 (Collective investment schemes authorised in approved countries);
- (b) Section 25 (Individually recognised overseas collective investment schemes)*; and
- (c) Section 26 (Money market funds authorised in approved countries).
*The Regulations have provided that section 25(4)(a) of the Financial Services Act 2021 will come into force on 1st January 2023.