Chapter IEIM401100

Published date25 April 2016
Record NumberIEIM401100
NRFI: FATCA Only: Restricted Funds

A restricted fund can be a Registered Deemed Compliant Financial Institution by virtue of the US regulations at §1471-5 (f)(1)(i)(D).

Investment Entities are eligible for restricted fund status where they impose prohibitions on the sale of units in the fund to Specified US Persons, Non-Participating Financial Institutions and Passive NFFEs with Controlling US Persons and where the fund meets the following requirements:

• The Financial Institution is a Financial Institution solely because it is an Investment Entity, and it is regulated as an investment fund in the UK and in all of the countries in which it is registered and in all of the countries in which it operates. A fund will be considered to be regulated as an investment fund for purposes of this paragraph if its manager is regulated with respect to the fund in all of the countries in which the investment fund is registered and in all of the countries in which the investment fund operates.

• Interests issued directly by the fund are redeemed by or transferred by the fund rather than sold by investors on any secondary market.

• Interests that are not issued directly by the fund are sold only through distributors that are Participating Financial Institutions, Registered Deemed Compliant Financial Institutions, non-registering local banks, or restricted distributors. A distributor includes an underwriter, broker, dealer, or other person who participates, pursuant to a contractual arrangement with the financial institution, in the distribution of securities and holds interests in the Financial Institution as a nominee.

• The Financial Institution ensures that by the later of 30 June 2014 or six months after the date it registers as a Deemed Compliant Financial Institution, that each agreement that governs the distribution of its debt or equity interests, prohibits sales and other transfers of debt or equity interests in the Financial Institution (other than interests that are both distributed by and held through a Participating Financial Institution) to Specified US Persons, Non-Participating Financial Institutions, or Passive NFFEs with one or more substantial US owners.

• In addition, by that date, the Financial Institution’s prospectus and all marketing materials must indicate that sales and other transfers of interests in the Financial Institution to Specified US Persons, non-Participating Financial Institutions, or Passive NFFEs with one or more substantial US...

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