The Undertakings for Collective Investment in Transferable Securities Regulations 2011

“Liability for key investor information

90ZA.—(1) A person is not to be subject to civil liability solely on the basis of the key investor information produced in relation to a collective investment scheme or a sub-fund of such a scheme in accordance with rules or other provisions implementing Chapter IX of the UCITS directive, or of any translation of that information, unless the key investor information is misleading, inaccurate or inconsistent with the relevant parts of the prospectus published for that collective investment scheme or sub-fund in accordance with rules made by the Authority under section 248 of this Act.

(2) In this section, a reference to a sub-fund of a collective investment scheme is a reference to a part of the property of the collective investment scheme which forms a separate pool where—

(a)

(a) the collective investment scheme provides arrangements for separate pooling of the contributions of the participants and the profits and income out of which payments are made to them; and

(b)

(b) the participants are entitled to exchange rights in one pool for rights in another.”.

“1A In the definition of “incoming firm” references to an EEAUCITS include, in a case where the UCITS is not a body corporate, references to its management company.”;

“Contravention by relevant EEA firm or EEAUCITS of directive requirements: home state regulator primarily responsible for securing compliance

195A.—(1) This section applies if the Authority has clear and demonstrable grounds for believing—

(a)

(a) that a relevant EEA firm has contravened, or is contravening, a requirement falling within subsection (2) (in a case to which Article 62.1 or 62.3 of the markets in financial instruments directive applies);

(b)

(b) that a relevant EEAUCITS has contravened, or is contravening, a requirement falling within subsection (3) (in a case to which Article 108.4 of the UCITS directive applies).

(2) A requirement falls within this subsection if it is imposed on the firm—

(a)

(a) by or under any provision adopted in the firm’s home state for the purpose of implementing the markets in financial instruments directive; or

(b)

(b) by any directly applicable Community regulation made under that directive.

(3) A requirement falls within this subsection if it is imposed on the EEAUCITS—

(a)

(a) by or under any provision adopted in the home state of the EEAUCITS for the purpose of implementing the UCITS directive; or

(b)

(b) by any directly applicable Community regulation or decision made under that directive.

(4) The Authority must notify the home state regulator of the firm or EEAUCITS in writing of the situation mentioned in subsection (1).

(5) The notice under subsection (4) must—

(a)

(a) request that the home state regulator take all appropriate measures for the purpose of ensuring that the firm or EEAUCITS puts an end to the contravention;

(b)

(b) state that the Authority’s powers of intervention are likely to become exercisable in relation to the firm or EEAUCITS if it continues the contravention; and

(c)

(c) indicate any requirements that the Authority proposes to impose on the firm or EEAUCITS in exercise of its power of intervention in the event of the power becoming exercisable.

(6) The Authority may exercise its power of intervention in respect of the firm or EEAUCITS if—

(a)

(a) a reasonable time has expired since the giving of the notice under subsection (4); and

(b)

(b) conditions A to C are satisfied.

(7) Condition A is that—

(a)

(a) the home state regulator of the firm or EEAUCITS has failed or refused to take measures for the purpose mentioned in subsection (5)(a); or

(b)

(b) any measures taken by the home state regulator have proved inadequate for that purpose.

(8) Condition B is that the firm or EEAUCITS is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the orderly functioning of the markets.

(9) Condition C is that the Authority has informed the home state regulator of the firm or EEAUCITS of its intention to exercise its power of intervention in respect of the firm or EEAUCITS.

(10) Subsection (6) applies whether or not the Authority’s power of intervention is also exercisable as a result of section 194 or 195.

(11) If the Authority exercises its power of intervention in respect of a relevant EEA firm or EEAUCITS by virtue of subsection (6), it must at the earliest opportunity inform the Commission of—

(a)

(a) the fact that the Authority has exercised that power in respect of that firm or EEAUCITS; and

(b)

(b) any requirements it has imposed on the firm or EEAUCITS in exercise of the power.

(12) In this section—

“home state” means—

(a) in relation to a relevant EEA firm—

(i) in the case of a firm which is a body corporate, the EEA State in which the firm has its registered office or, if it has no registered office, its head office; and

(ii) in any other case, the EEA State in which the firm has its head office;

(b) in relation to a relevant EEAUCITS, the EEA State in which the UCITS is authorised pursuant to Article 5 of the UCITS directive;

“relevant EEA firm” means an EEA firm falling within paragraph 5(a) or (b) of Schedule 3 which is exercising in the United Kingdom a right deriving from the markets in financial instruments directive;

“relevant EEAUCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State other than the United Kingdom, and references to an EEAUCITS include, in a case where the UCITS is not a body corporate, references to its management company.”.

“10 If an incoming EEA firm is exercising EEA rights under the UCITS directive, then the Authority must inform the Commission of any measures it has taken in the exercise of its power of intervention.”.

“Management companies: loss of authorisation

199A.—(1) This section applies in relation to an EEA firm falling within paragraph 5(f) of Schedule 3 (“a management company”) which is providing services in the United Kingdom in the exercise of an EEA right deriving from the UCITS directive.

(2) If the Authority has been informed by the home state regulator of the management company that it is withdrawing the management company’s authorisation, the Authority must exercise its powers under this Act in such manner as it thinks fit to safeguard the interests of investors in a collective investment scheme managed by the management company in the United Kingdom.

(3) Measures taken under subsection (2) may include decisions preventing the management company from initiating any further transactions in the United Kingdom.

(4) In this section “collective investment scheme” has the same meaning as in Part 17 of this Act.”.