C3Part XVII Collective Investment Schemes
Chapter III Authorised Unit Trust Schemes
Powers of intervention
I1257 Directions.
C11
a
one or more of the requirements for the making of an authorisation order are no longer satisfied;
F1b
the manager or trustee of an authorised unit trust scheme has contravened, or is likely to contravene, a requirement imposed—
i
by or under this Act; F16...
ii
by F18UCITS-related direct EU legislation; or
c
the manager or trustee of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the F9FCA information which is false or misleading in a material particular; or
d
none of paragraphs (a) to (c) applies, but it is desirable to give a direction in order to protect the interests of participants or potential participants in such a scheme.
2
A direction under this section may—
a
require the manager of the scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme;
b
require the manager and trustee of the scheme to wind it up.
3
If the authorisation order is revoked, the revocation does not affect any direction under this section which is then in force.
4
A direction may be given under this section in relation to a scheme in the case of which the authorisation order has been revoked if a direction under this section was already in force at the time of revocation.
5
If a person contravenes a direction under this section, F8section 138D applies to the contravention as it applies to a contravention mentioned in that section.
C26
The F9FCA may, either on its own initiative or on the application of the manager or trustee of the scheme concerned, revoke or vary a direction given under this section if it appears to the F9FCA—
a
in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force;
b
in the case of variation, that the direction should take effect or continue in force in a different form.
258 Applications to the court.
1
If the F9FCA could give a direction under section 257, it may also apply to the court for an order—
a
removing the manager or the trustee, or both the manager and the trustee, of the scheme; and
b
replacing the person or persons removed with a suitable person or persons nominated by the F9FCA.
2
The F9FCA may nominate a person for the purposes of subsection (1)(b) only if it is satisfied that, if the order was made, the requirements of section 243(4) to (7) would be complied with.
3
If it appears to the F9FCA that there is no person it can nominate for the purposes of subsection (1)(b), it may apply to the court for an order—
a
removing the manager or the trustee, or both the manager and the trustee, of the scheme; and
b
appointing an authorised person to wind up the scheme.
4
On an application under this section the court may make such order as it thinks fit.
5
The court may, on the application of the F9FCA, rescind any such order as is mentioned in subsection (3) and substitute such an order as is mentioned in subsection (1).
6
The F9FCA must give written notice of the making of an application under this section to the manager and trustee of the scheme concerned.
7
The jurisdiction conferred by this section may be exercised by—
a
the High Court;
b
in Scotland, the Court of Session.
258AF5Winding up or merger of master UCITS
1
Subsection (2) applies if a master UCITS which has one or more feeder UCITS which are authorised unit trust schemes is wound up, whether as a result of a direction given by the F9FCA under section 257 F10or 261X, an order of the court under section 258 F11or 261Y, rules made by the F9FCA or otherwise.
2
The F9FCA must direct the manager and trustee of any authorised unit trust scheme which is a feeder UCITS of the master UCITS to wind up the feeder UCITS unless—
a
the F9FCA approves under section 283A the investment by the feeder UCITS of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in units of another UCITS or master UCITS; or
3
Subsection (4) applies if a master UCITS which has one or more feeder UCITS which are authorised unit trust schemes—
a
merges with another UCITS, or
b
is divided into two or more UCITS.
4
The F9FCA must direct the manager and trustee of any authorised unit trust scheme which is a feeder UCITS of the master UCITS to wind up the scheme unless—
a
the F9FCA approves under section 283A the investment by the scheme of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in the units of—
i
the master UCITS which results from the merger;
ii
one of the UCITS resulting from the division; or
iii
another UCITS or master UCITS;
I2259 Procedure on giving directions under section 257 F2or 258A and varying them on F7FCA's own initiative.
1
A direction F3under section 257 or 258A takes effect—
a
immediately, if the notice given under subsection (3) states that that is the case;
b
on such date as may be specified in the notice; or
c
if no date is specified in the notice, when the matter to which it relates is no longer open to review.
2
A direction F12under section 257 may be expressed to take effect immediately (or on a specified date) only if the F9FCA, having regard to the ground on which it is exercising its power under F13that section, considers that it is necessary for the direction to take effect immediately (or on that date).
3
4
The notice must—
a
give details of the direction;
b
inform the person to whom it is given of when the direction takes effect;
c
state the F9FCA's reasons for giving the direction and for its determination as to when the direction takes effect;
d
inform the person to whom it is given that he may make representations to the F9FCA within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and
e
inform him of his right to refer the matter to the Tribunal.
5
If the direction imposes a requirement under section 257(2)(a), the notice must state that the requirement has effect until—
a
a specified date; or
b
a further direction.
6
If the direction F4is given under section 257(2)(b) or section 258A(2) or (4), the scheme must be wound up—
a
by a date specified in the notice; or
b
if no date is specified, as soon as practicable.
7
The F9FCA may extend the period allowed under the notice for making representations.
8
If, having considered any representations made by a person to whom the notice was given, the F9FCA decides—
a
to give the direction in the way proposed, or
b
if it has been given, not to revoke the direction,
it must give separate written notice to the manager and the trustee of the scheme concerned.
9
If, having considered any representations made by a person to whom the notice was given, the F9FCA decides—
a
not to give the direction in the way proposed,
b
to give the direction in a way other than that proposed, or
c
to revoke a direction which has effect,
it must give separate written notice to the manager and the trustee of the scheme concerned.
10
A notice given under subsection (8) must inform the person to whom it is given of his right to refer the matter to the Tribunal.
11
A notice under subsection (9)(b) must comply with subsection (4).
12
If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
13
This section applies to the variation of a direction on the F9FCA's own initiative as it applies to the giving of a direction.
14
For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
I3260 Procedure: refusal to revoke or vary direction.
1
If on an application under section 257(6) for a direction to be revoked or varied the F9FCA proposes—
a
to vary the direction otherwise than in accordance with the application, or
b
to refuse to revoke or vary the direction,
it must give the applicant a warning notice.
2
If the F9FCA decides to refuse to revoke or vary the direction—
a
it must give the applicant a decision notice; and
b
the applicant may refer the matter to the Tribunal.
I4261 Procedure: revocation of direction and grant of request for variation.
1
If the F9FCA decides on its own initiative to revoke a direction under section 257 it must give separate written notices of its decision to the manager and trustee of the scheme.
2
If on an application under section 257(6) for a direction to be revoked or varied the F9FCA decides to revoke the direction or vary it in accordance with the application, it must give the applicant written notice of its decision.
3
A notice under this section must specify the date on which the decision takes effect.
4
The F9FCA may publish such information about the revocation or variation, in such way, as it considers appropriate.
F22261AInformation for home state regulator
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
261BF6Information for feeder UCITS
1
The F9FCA must immediately inform the operator of any authorised unit trust scheme which is a feeder UCITS of an authorised unit trust scheme F15, an authorised contractual scheme or an authorised open-ended investment company (the master UCITS) of—
a
b
any warning notice or decision notice given to the master UCITS in relation to a contravention of any provision made in implementation of Chapter VIII of the UCITS directive by or under any enactment or in rules of the F9FCA;
F242
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F243
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 17 modified (20.2.2019) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(3), 62 (as amended (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 12(b))