The Alternative Investment Fund Managers (Amendment) Regulations 2013

Statutory Instruments

2013 No. 1797

Financial Services And Markets

The Alternative Investment Fund Managers (Amendment) Regulations 2013

Made

17th July 2013

Laid before Parliament

18th July 2013

Coming into force in accordance with regulation 1

M1 M2 The Treasury are a government department designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to financial services.

The Treasury make these Regulations in exercise of the powers conferred on them under section 2(2) of the European Communities Act 1972 and paragraphs 13(1)(b) and 22 of Schedule 3 to the Financial Services and Markets Act 2000 M3 .

Modifications etc. (not altering text)

C1 Regulations: power to modify conferred (11.7.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 3, 86(3), Sch. 1 Pt. 2; S.I. 2023/779, reg. 2(d)

Marginal Citations

M1 S.I. 2012/1759

M2 1972 c. 68. Section 2(2) was amended by section 27(1)(a) of the Legislative and Regulatory Reform Act 2006 (c. 51) and the European Union (Amendment) Act 2008 (c.7), Schedule, Part 1. By virtue of the amendment of section 1(2) by section 1 of the European Economic Area Act 1993 (c.51) regulations may be made under section 2(2) of the European Communities Act to implement obligations of the United Kingdom created or arising by or under the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (Cm 2073) and the Protocol adjusting the Agreement signed at Brussels on 17th March 1993 (Cm 2183)

M3 2000 c. 8. Section 417(1) provides that “prescribed” means prescribed in regulations made by the Treasury. Paragraph 13(1)(b) of Schedule 3 was amended by S.I. 2007/126 and paragraph 22 of Schedule 3 was amended by the Financial Services Act 2012 (c. 21)

Citation and commencement U.K.

1.—(1) These Regulations may be cited as the Alternative Investment Fund Managers (Amendment) Regulations 2013.

(2) This regulation and regulations 2 (interpretation) and 6 (consultation on rules made for the purposes of Article 35 or 37 to 41 of the directive) come into force on 22ndJuly 2013.

[F1 (3) Regulations 3 and 4 and Schedules 1 and 2 come into force on such day as the Treasury may by regulations appoint.]

F1 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Regulation 5 (amendments to Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001) comes into force immediately after the principal regulations come into force.

[F2 (6) Regulations made by the Treasury under paragraph (3) may make different provision for different purposes.

(7) The power to make regulations under paragraph (3) is exercisable by statutory instrument.]

Textual Amendments

F1 Reg. 1(3) substituted for reg. 1(3)(4) (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 17(a) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F2 Reg. 1(6)(7) inserted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 17(b) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Interpretation U.K.

2.  In these Regulations—

“the Act” means the Financial Services and Markets Act 2000;

“the directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers M4 ;

“the FCA” means the Financial Conduct Authority;

“the PRA” means the Prudential Regulation Authority;

“the principal regulations” means the Alternative Investment Fund Managers Regulations 2013 M5 ;

“the Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 M6 ;

“rule” means a rule made by the FCA or the PRA under the Act.

Amendments to legislation that [F3 implemented] Articles 35 and 37 to 41 of the directive U.K.

3.  Schedule 1, which contains amendments to the Act and the principal regulations, has effect.

Textual Amendments

F3 Words in reg. 3 heading substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 18(1) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Amendments to legislation that come into force [F4 on appointment by the Treasury] U.K.

4.  Schedule 2, which contains further amendments to the Act and the principal regulations, amendments to the Regulated Activities Order, and related transitional provisions, has effect.

Textual Amendments

F4 Words in reg. 4 heading substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 18(2) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Amendments to Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 U.K.

5.  In the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 M7 —

(a) in regulation 2(6) (establishment of a branch: contents of consent notice) after sub-paragraph (a) insert—

“(aa) particulars of the programme of operations to be carried on through the branch, including a description of the particular EEA activities to be carried on;”, and

(b) in regulation 17A(1) (full-scope UK AIFM: changes to branch details or services) for “2(6)(b) to (e)” substitute “ 2(6)(aa) to (e) ”.

Consultation on rules made for the purposes of [F5 the provisions amended by Schedule 1] U.K.

6.— [F6 (1) Before the date on which the Treasury makes regulations under regulation 1(3) appointing the day when the amendments in Schedule 1 to these Regulations come into force, the FCA or the PRA may make rules for the purpose of the provisions amended by Schedule 1 without complying with sections 138I to 138L of the Act (consultation).]

(2) Paragraph (3) applies in relation to rules that, as a result of paragraph (1), are made by the FCA or the PRA without complying with sections 138I to 138L of the Act, but does not apply in relation to rules that are revoked before they come into force.

(3) After the rules are made, sections 138I to 138L of the Act apply in respect of those rules with the modifications set out in paragraphs (4) to (7).

(4) Section 138I of the Act has effect as if—

(a) in subsection (1)—

(i) in the opening words for “Before making any rules” there were substituted “ Before any rules made by the FCA come into force ”, and

(ii) in paragraph (b) for “a draft of the proposed rules” there were substituted “ the rules ”,

(b) in subsection (2)—

(i) in the opening words for “draft” there were substituted “ rules ”,

(ii) in paragraphs (b) and (d) “proposed” were omitted, and

(iii) in paragraph (e) for “proposals” there were substituted “ rules ”,

(c) for subsection (3) there were substituted—

“(3) The FCA must have regard to any representations made to it in accordance with subsection (2)(e) and must consider whether to amend the rules before they come into force.”,

(d) in subsection (4) for “If the FCA makes the proposed rules, it” there were substituted “ The FCA ”,

(e) in subsection (5) for “If the rules differ from the draft” there were substituted “ If the rules that come into force differ from the rules ”,

(f) for subsection (7)(a) there were substituted—

“(a) an analysis of the costs together with an analysis of the benefits that would arise—

(i) if the rules came into force as published under subsection (1)(b), or

(ii) if subsection (5) applies, from the rules as amended, and”, and

(g) in subsection (9) for “a draft” there were substituted “ rules ”.

(5) Section 138J of the Act has effect as if—

(a) in subsection (1)—

(i) in the opening words for “Before making any rules” there were substituted “ Before any rules made by the PRA come into force ”, and

(ii) in paragraph (b) for “a draft of the proposed rules” there were substituted “ the rules ”,

(b) in subsection (2)—

(i) in the opening words for “draft” there were substituted “ rules ”,

(ii) in paragraphs (b) and (d) “proposed” were omitted, and

(iii) in paragraph (e) for “proposals” there were substituted “ rules ”,

(c) for subsection (3) there were substituted—

“(3) The PRA must have regard to any representations made to it in accordance with subsection (2)(e) and must consider whether to amend the rules before they come into force.”,

(d) in subsection (4) for “If the PRA makes the proposed rules, it” there were substituted “ The PRA ”,

(e) in subsection (5) for “If the rules differ from the draft” there were substituted “ If the rules that come into force differ from the rules ”,

(f) for subsection (7)(a) there were substituted—

“(a) an analysis of the costs together with an analysis of the benefits that would arise—

(i) if the rules came into force as published under subsection (1)(b), or

(ii) if subsection (5) applies, from the rules as amended, and”, and

(g) in subsection (9) for “a draft” there were substituted “ rules ”.

(6) Section 138K of the Act has effect as if—

(a) in subsection (1) for “proposes to make a rule (“the proposed rule”) which would apply” there were substituted “ makes a rule which applies ”,

(b) in subsection (2)(a) “proposed” were omitted,

(c) in the opening words of subsection (3) for “a regulator makes a rule” there were substituted “ a rule comes into force ”,

(d) in subsection (3)(b) “draft of the proposed” were omitted, and

(e) in subsection (4)(a) for “the impact of the rule is significantly different from the impact of the proposed rule” there were substituted “ the impact of the rule as it comes into force is significantly different from the impact of the rule published under section 138I(1)(b) or 138J(1)(b) (as the case may be) ”.

(7) Section 138L(5) of the Act has effect as if—

(a) in paragraph (a) for “the overall position if the rules are made and the overall position if the rules are not made” there were substituted “ the overall position if the rules come into force as published under section 138I(1)(b) or 138J(1)(b) (as the case may be) and the overall position if the rules are amended before coming into force ”, and

(b) in paragraph (b) for “the overall position after the making of the rules and the overall position before they were made” there were substituted “ the overall position after any amendment of the rules and the overall position before any such amendment ”.

Textual Amendments

F5 Words in reg. 6 heading substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 19(2) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F6 Reg. 6(1) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 19(1) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Desmond Swayne

Robert Goodwill

Two of the Lords Commissioners of Her Majesty's Treasury

Regulation 3

SCHEDULE 1 U.K. Amendments to legislation that implement Articles 35 and 37 to 41 of the directive

Amendments to the Act U.K.

1.—(1) The Act is amended as follows.

(2) In section 55V(8) (determination of applications) M8 for “regulation 5” insert “ regulations 5 and 5A ”.

F7 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) M9 In section 418 (carrying on regulated activities in the United Kingdom) —

F8 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) [F9 after subsection (5AA)] insert—

“(5B) The [F10 seventh] case is where—

(a) the regulated activity being carried on by the person is the regulated activity of managing an AIF,

(b) the AIF being managed—

(i) has its registered office in [F11 the United Kingdom], or

(ii) is marketed in [F11 the United Kingdom],

(c) if the AIF being managed is marketed in [F12 the United Kingdom], it is marketed otherwise than in accordance with [F13 regulation 59 of the Alternative Investment Fund Managers Regulations 2013, and]

(d) the person does not have a registered office in [F14 the United Kingdom], F15 ...

F16 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F17 (5C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”, and

[F18 (c) in subsection (6) for “(5AA)” substitute “ (5B) ”.]

(5) In Schedule 3 (EEA passport rights)—

(a) in paragraph 5(h) (EEA firm) M10 omit “Article 6.1 of”,

(b) in paragraph 7A(aa) (EEA right: meaning of “relevant office”) M11 for paragraph (aa) substitute—

“(aa) in relation to a person whose entitlement [F19 derives from] the alternative investment fund managers directive—

(i) if the person's registered office is in an EEA State, its registered office;

(ii) if the person's registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);”,

(c) in paragraph 10A(aa) (UK firm: meaning of “relevant office”) M12 for paragraph (aa) substitute—

“(aa) in relation to a firm whose EEA right derives from the alternative investment fund managers directive—

(i) if the firm's registered office is in an EEA State, its registered office;

(ii) if the firm's registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);”,

(d) in paragraph 14(3A) (services) M13 after “Article 32” insert “ , 35, 39 or 40 ”,

(e) in paragraph 19(7BB)(b) (establishment) M14 omit “Article 6.1 of”,

(f) in paragraph 20(3D)(a)(ii) (services) M15 omit “Article 6.1 of”, and

(g) in paragraph 20C (notice of intention to market an AIF) M16 —

(i) in sub-paragraph (1) for “a UK AIF or EEA AIF” substitute “ an AIF ”,

(ii) for sub-paragraph (5)(b) substitute—

“(b) if the AIF is a third country AIF or a third country feeder AIF—

(i) appropriate co-operation arrangements are in place between the FCA and the supervisory authorities of the relevant third country in order to ensure an efficient exchange of information that allows the FCA to carry out its duties in accordance with the alternative investment fund managers directive,

(ii) the relevant third country is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force,

(iii) the relevant third country has signed an agreement with the United Kingdom and with each other EEA State in which the units or shares of the AIF are intended to be marketed, and

(iv) the agreement fully complies with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and on Capital 2010 M17 and ensures an effective exchange of information on tax matters, including any multilateral tax agreements.”, and

(iii) in sub-paragraph (12), in the appropriate places insert the following definitions—

““relevant third country” means—

(a)

in relation to a third country AIF, the country in which the AIF is authorised or registered or, if the AIF is not authorised or registered, the country in which it has its registered office;

(b)

in relation to a third country feeder AIF, the country in which the master AIF is authorised or registered or, if the master AIF is not authorised or registered, the country in which it has its registered office;

“third country AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;

“third country feeder AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;

“third country AIFM” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.”.

(6) In paragraph 2B of Schedule 6 (threshold conditions - location of offices) M18 , in sub-paragraph (7), for “a full-scope UK AIFM, A's head office and registered office must be in the United Kingdom” substitute—

“a full-scope UK AIFM—

(a) A's head office and registered office must be in the United Kingdom, or

(b) A's registered office must be in a [F20 third country].”.

Textual Amendments

F7 Sch. 1 para. 1(3) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(a) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F8 Sch. 1 para. 1(4)(a) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(b) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in Sch. 1 para. 1(4)(b) substituted (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 5(b)(i) (as amended by S.I. 2014/1313, arts. 1, 2(a))

F10 Word in Sch. 1 para. 1(4)(b) substituted (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 5(b)(ii) (as amended by S.I. 2014/1313, arts. 1, 2(a))

F11 Words in Sch. 1 para. 1(4)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F12 Words in Sch. 1 para. 1(4)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(ii)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F13 Words in Sch. 1 para. 1(4)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(ii)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F14 Words in Sch. 1 para. 1(4)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(iii)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F15 Word in Sch. 1 para. 1(4)(b) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(iii)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F16 Words in Sch. 1 para. 1(4)(b) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(c)(iv) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F17 Words in Sch. 1 para. 1(4)(b) omitted (16.6.2014) by virtue of The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 5(b)(iii) (as amended by S.I. 2014/1313, arts. 1, 2(a))

F18 Sch. 1 para. 1(4)(c) substituted (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 5(c) (as amended by S.I. 2014/1313, arts. 1, 2(a))

F19 Words in Sch. 1 para. 1(5)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(d) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F20 Words in Sch. 1 para. 1(6) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(2)(e) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M8 Section 55V was inserted by section 11 of the Financial Services Act 2012 (c.21) and amended by the principal regulations

M9 Amended by S.I. 2002/1775 and S.I. 2012/1906

M10 Inserted by the principal regulations

M11 Inserted by S.I. 2003/1473 and amended by the principal regulations

M12 Inserted by S.I. 2003/1473 and amended by the principal regulations

M13 Inserted by the principal regulations

M14 Inserted by the principal regulations

M15 Inserted by the principal regulations

M16 Inserted by the principal regulations

M17 ISBN 978-92-64-17517-4

M18 Paragraph 2B was substituted by S.I. 2013/555 and sub-paragraph (7) was inserted by the principal regulations

Amendments to the principal regulations U.K.

2.—(1) The principal regulations are amended as follows.

(2) In regulation 2(1) (interpretation)—

(a) in the definition of “external valuer” after “full-scope UK AIFM” insert “ other than an AIF that is marketed only pursuant to [F21 regulation 59 of these Regulations] ”,

F22 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) in the definition of “small third country AIFM” at the end insert “ and which has not exercised the option F24 ... to meet the full requirements [F25 applying to a full-scope AIFM]”,

(e) at the appropriate place insert—

““third country feeder AIF” means a UK AIF [F26 , Gibraltar AIF] or EEA AIF that—

(a)

is managed by an AIFM with its registered office in [F27 the United Kingdom or Gibraltar], and

(b)

is a feeder AIF whose the master AIF is a third country AIF or is managed by a third country AIFM;”, and

(f) for the definition of “UK AIFM” substitute—

““UK AIFM” means an AIFM that—

(a)

has its registered office in the United Kingdom,

(b)

[F28 has its registered office in a third country but has been given permission by the FCA under Part 4A of the Act to carry on the regulated activity of managing an AIF.]

(c)

F29 ...”.

(3) At the end of regulation 2 insert—

“(4) Any reference in these Regulations to cancellation of a Part 4A permission to carry on the regulated activity of managing an AIF includes reference to the variation of a Part 4A permission to remove the regulated activity of managing an AIF from those activities to which the permission relates.”.

(4) In regulation 5 (applications for Part 4A permission)—

(a) in paragraph (1) for “applies” in the first place it appears substitute “ and regulation 5A apply ”,

(b) in paragraph (3)(b) for “the regulator” substitute “ subject to regulation 5A(4), the regulator ”,

(c) in paragraph (4) for “The regulator” substitute “ Subject to regulation 5A(5), the regulator ”,

(d) in paragraph (7) for “If the regulator” substitute “ Subject to regulation 5A(5), if the regulator ”, and

(e) in paragraph (8) for “An application” substitute “ Subject to regulation 5A(6), an application ”.

(5) After regulation 5 insert—

“Applications by AIFMs from third countries

5A.—F30 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In the case of an applicant for Part 4A permission whose registered office is in a third country, the regulator must not give the Part 4A permission unless, in addition to the conditions specified in regulation 5(3) being met—

F31 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the applicant has appointed a legal representative who—

(i) is the point of contact for the FCAF32 ... and investors in relation to the AIFs managed or to be managed by the applicant;

(ii) is sufficiently equipped to perform the compliance function [F33 pursuant to the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of EU retained law] in relation to those AIFs; and

(iii) if an individual, is domiciled in the United Kingdom, or if not an individual, has a registered office or a branch in the United Kingdom;

[F34 (c) appropriate co-operation arrangements are in place between the FCA, the competent authority in relation to any EEA AIF managed by the applicant and the supervisory authorities of the third country in which the applicant has its registered office, in order to ensure an efficient exchange of information that enables the FCA to carry out its duties in accordance with the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of EU retained law;]

(d) the third country in which the applicant has its registered office is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force;

(e) the third country in which the applicant has its registered office has signed an agreement with the United Kingdom, which fully complies with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and on Capital and ensures an effective exchange of information on tax matters, including any multilateral tax agreements; and

(f) the effective exercise by the FCA [F35 of its supervisory functions under the Financial Services and Markets Act 2000, these Regulations and any EU tertiary legislation made under the directive which forms part of EU retained law] is not prevented by the laws, regulations or administrative provisions of a third country which apply to the applicant, nor by limitations in the supervisory and investigatory powers of that country's supervisory authorities.

(4) Notwithstanding regulation 5(3)(b), the regulator may give the Part 4A permission to an applicant whose registered office is in a third country if the regulator is satisfied that—

(a) it is impossible for the applicant to comply with an implementing provision applicable to a full-scope UK AIFM which has its registered office in a third country because of a mandatory provision in the law that applies to the applicant or a third country AIF that the applicant intends to market in [F36 the United Kingdom or in Gibraltar],

(b) the law that applies to the applicant or the third country AIF provides for a rule that is equivalent to that implementing provision, has the same regulatory purpose as that provision and offers the same level of protection to the investors of the AIFs managed by the applicant or, as the case may be, the investors of that AIF, and

(c) the applicant or, as the case may be, the AIF complies with that equivalent rule.

F37 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In the case of an applicant whose registered office is in a third country, the application is complete if, in addition to containing the information mentioned in regulation 5(8), it contains—

F38 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) a list of any implementing provisions with which it is impossible for the applicant to comply because of a mandatory provision in the law that applies to the applicant or a third country AIF that the applicant intends to market in [F39 the United Kingdom or in Gibraltar], or confirmation that there are no such provisions;

(c) if any provision is included in a list provided under sub-paragraph (b), written evidence that—

(i) the law that applies to the applicant or the third country AIF provides for a rule that is equivalent to the provision;

(ii) the equivalent provision has the same regulatory purpose as the provision included in the list provided under sub-paragraph (b);

(iii) the equivalent provision offers the same level of protection to the investors of the AIFs managed by the applicant or, as the case may be, the investors of the third country AIF; and

(iv) the applicant or, as the case may be, the third country AIF complies with that equivalent rule,

such evidence being based on regulatory standards developed by [F40 the FCA];

(d) if evidence is provided under sub-paragraph (c), a legal opinion in support of the evidence on the existence of the relevant mandatory provision, and a description of the regulatory purpose of and the nature of the investor protection pursued by the equivalent rule;

(e) the name of the legal representative of the applicant and the place where the legal representative has its registered office or a branch (in the case of a legal person) or where he or she is domiciled (in the case of an individual).”.

F41 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) For regulation 10(2)(c) (small registered UK AIFMs) substitute—

“(c) either—

(i) in the case of an AIFM with its registered office in the United Kingdom, grounds do not exist which would permit or require a court to make a disqualification order within the meaning of section 1(1) of the Company Directors Disqualification Act 1986 M19 against an individual responsible for the management or operation of the AIFM; or

(ii) in the case of an AIFM with its registered office in a third country, such grounds would not exist if the AIFM were a company incorporated in the United Kingdom.”.

(8) For regulation 29(1) (depositary liability: general provisions) for the words from “in relation to” to the end substitute—

“in relation to—

(a) the depositary of a UK AIF managed by a full-scope UK AIFM or [F42 a Gibraltar AIFM]; or

(b) the depositary of a third country AIF managed by a full-scope UK AIFM if—

(i) the depositary has its registered office or a branch in the United Kingdom; and

(ii) the AIF is marketed otherwise than pursuant to [F43 regulations 57 or 59 of these Regulations].”.

(9) In regulation 33 (management of third country AIFs) after “full-scope UK AIFM” insert “ that has its registered office in the United Kingdom ”.

F44 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) For the table in regulation 50 (marketing by AIFMs of other AIFs) substitute the following table—

“A – AIFM	B – AIF	C – Condition
Full-scope UK AIFM with its registered office in the United Kingdom	An AIF that is not a third country AIF or a third country feeder AIF	The FCA has approved marketing of the AIF in accordance with regulation 54.
Full-scope UK AIFM with its registered office in the United Kingdom	A third country AIF or a third country feeder AIF	The FCA has approved marketing of the AIF in accordance with regulation 54; or the AIFM has notified the FCA in accordance with regulation 57 and meets the conditions at regulation 57(4)(a) to (c), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope UK AIFM with its registered office in a third country	Any AIF	The FCA has approved marketing of the AIF in accordance with regulation 54; or the AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope [F45 Gibraltar AIFM with its registered office in Gibraltar]	A third country AIF or a third country feeder AIF	The marketing is permitted under regulation 49; or the AIFM has notified the FCA in accordance with regulation 57 and meets the conditions at regulation 57(4)(a) to (c), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Full-scope [F46 Gibraltar AIFM] with its registered office in a third country	Any AIF	The marketing is permitted under regulation 49; or the AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Small third country AIFM that is not a full-scope UK AIFM [F47 or a Gibraltar AIFM]	Any AIF	The AIFM is a small registered UK AIFM or a small authorised UK AIFM; or the AIFM has notified the FCA in accordance with regulation 58 and meets the conditions at regulation 58(2)(a) and (b), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.
Third country AIFM that is not a small AIFM, a full-scope UK AIFM [F48 or a Gibraltar AIFM]	Any AIF	The AIFM has notified the FCA in accordance with regulation 59 and meets the conditions at regulation 59(2)(a) to (e), and the FCA has not suspended or revoked the AIFM's entitlement to market the AIF.”

(12) In regulation 54 (FCA approval for marketing)—

(a) for paragraph (1) substitute—

“(1) This regulation applies to—

(a) a full-scope UK AIFM seeking to market in the United Kingdom an AIF managed by the AIFM;

(b) a full-scope [F49 Gibraltar AIFM] seeking to market in the United Kingdom to retail investors an AIF managed by the AIFM, where the FCA has not received a regulator's notice in relation to the marketing of the AIF in accordance with Schedule 3 to the Act (EEA passport rights).”, and

(b) after paragraph (8) insert—

“(9) The FCA must refuse an application if satisfied that the AIF is a third country AIF or a third-country feeder AIF and the following conditions are not met—

(a) appropriate co-operation arrangements are in place between the FCA (or, in the case of an AIF managed by an AIFM with its registered office [F50 in Gibraltar, the Financial Services Commission]) and the supervisory authorities of the relevant third country in order to ensure an efficient exchange of information that allows—

[F51 (i) the FCA to carry out its duties in accordance with the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of EU retained law, and

(ii) the Financial Services Commission to carry out its duties in accordance with the Financial Services (Alternative Investment Fund Managers) Regulations 2013 of Gibraltar;]

(b) the relevant third country is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force; and

(c) the relevant third country has signed an agreement with the United Kingdom (or, in the case of an AIF managed by an AIFM with is registered office [F52 in Gibraltar, with Gibraltar]) and with [F53 each EEA State] in which the units or shares of the AIF are intended to be marketed, which fully complies with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and on Capital 2010 M20 and ensures an effective exchange of information on tax matters, including any multilateral tax agreements.

(10) In paragraph (9) “relevant third country” means—

(a) in relation to a third country AIF, the country in which the AIF is authorised or registered or, if the relevant AIF is not authorised or registered, the country in which it has its registered office;

(b) in relation to a third country feeder AIF, the country in which the AIF's master AIF is authorised or registered or, if the master AIF is not authorised or registered, the country in which it has its registered office.”.

(13) In regulation 57 (marketing under Article 36 of the directive)—

(a) in paragraph (3) for “must give written notification to the FCA before marketing” substitute “ may give written notification to the FCA that it intends to market ”, and

(b) at the beginning of paragraph (5) for “The AIFM” substitute “ An AIFM that has given a notification under paragraph (3) ”.

(14) In regulation 58 (marketing of AIFs managed by small third country AIFMs)—

(a) in paragraph (1) for “must give written notification to the FCA before marketing” substitute “ may give written notification to the FCA that it intends to market ”, and

(b) at the beginning of paragraph (3) for “The AIFM” substitute “ An AIFM that has given a notification under paragraph (1) ”.

(15) In regulation 59 (marketing under Article 42 of the directive)—

(a) in paragraph (1) for “must give written notification to the FCA before marketing” substitute “ may give written notification to the FCA that it intends to market ”, and

(b) after [F54 paragraph (4A)] insert—

“(5) Paragraph (6) applies where a full-scope UK AIFM that has its registered office in a third country markets an AIF only—

(a) pursuant to a notification under this regulation F55 ...

F55 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The AIFM need not comply with implementing provisions in respect of the AIF other than as required by this Part.”.

Textual Amendments

F21 Words in Sch. 1 para. 2(2)(a) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F22 Sch. 1 para. 2(2)(b) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F23 Sch. 1 para. 2(2)(c) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F24 Words in Sch. 1 para. 2(2)(d) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(iii)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F25 Words in Sch. 1 para. 2(2)(d) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(iii)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F26 Words in Sch. 1 para. 2(2)(e) inserted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(iv)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F27 Words in Sch. 1 para. 2(2)(e) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(iv)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F28 Words in Sch. 1 para. 2(2)(f) substituted (31.12.2020) by S.I. 2019/328, reg. 20(3)(a)(v)(aa) (as substituted by The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(2), 13(b); 2020 c. 1, Sch. 5 para. 1(1))

F29 Words in Sch. 1 para. 2(2)(c) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(a)(v)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F30 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F31 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(ii)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F32 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(ii)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F33 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(ii)(cc) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F34 Words in Sch. 1 para. 2(5) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(ii)(dd) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F35 Words in Sch. 1 para. 2(5) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(ii)(ee) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F36 Words in Sch. 1 para. 2(5) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(iii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F37 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(iv) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F38 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(v)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F39 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(v)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F40 Words in Sch. 1 para. 2(5) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(b)(v)(cc) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F41 Sch. 1 para. 2(6) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(c) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F42 Words in Sch. 1 para. 2(8)(a) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(d)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F43 Words in Sch. 1 para. 2(8)(b)(ii) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(d)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F44 Sch. 1 para. 2(10) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(e) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F45 Words in Sch. 1 para. 2(11) Table substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(f)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F46 Words in Sch. 1 para. 2(11) Table substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(f)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F47 Words in Sch. 1 para. 2(11) Table substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(f)(iii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F48 Words in Sch. 1 para. 2(11) Table substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(f)(iv) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F49 Words in Sch. 1 para. 2(12)(a) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(g) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F50 Words in Sch. 1 para. 2(12)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(h)(i)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F51 Words in Sch. 1 para. 2(12)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(h)(i)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F52 Words in Sch. 1 para. 2(12)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(h)(ii)(aa) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F53 Words in Sch. 1 para. 2(12)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(h)(ii)(bb) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F54 Words in Sch. 1 para. 2(15)(b) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(i)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F55 Words in Sch. 1 para. 2(15)(b) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 20(3)(i)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M19 1986 c. 46. Section 1(1) was amended by section 204(1) and (3) of the Enterprise Act 2002 (c. 40) and section 5(1) of the Insolvency Act 2000 (c. 39)

M20 ISBN 978-92-64-17517-4

Regulation 4

SCHEDULE 2 U.K. Amendments to legislation that come into force on termination of Articles 36 and 42 of the directive

PART 1 U.K. Amendments to legislation

Amendment to the Act U.K.

1.  In section 418(5B) of the Act (carrying on regulated activities in the United Kingdom) M21 , omit paragraph (c).

Marginal Citations

M21 Inserted by paragraph 1 of Schedule 1 to these Regulations

Amendment to the Regulated Activities Order U.K.

2.  In Schedule 8 to the Regulated Activities Order (persons excluded from regulated activity of managing an AIF), omit paragraph 11 M22 .

Marginal Citations

M22 Inserted by paragraph 1(17) of Schedule 2 to the principal regulations and amended by regulation 81 of the principal regulations

Amendments to the principal regulations U.K.

3.—(1) The principal regulations M23 are amended as follows.

(2) In regulation 2(1) (interpretation)—

(a) in the definition of “external valuer” omit “other than an AIF that is marketed only pursuant to [F56 regulation 59 of these Regulations] ”.

(3) For regulation 29(1)(b) (depositary liability: general provisions) substitute—

“(b) the depositary of a third country AIF managed by a full-scope UK AIFM, if the depositary has its registered office or a branch in the United Kingdom.”.

(4) For regulation 34 (introductory provision) substitute—

“Introductory provision

34.   In this Part, a reference to an AIFM is to a full-scope UK AIFM.”.

(5) In regulation 49 (marketing by full-scope EEA AIFMs)—

(a) after paragraph (a) insert “ or ”,

(b) after paragraph (b) omit “or”, and

(c) omit paragraph (c).

(6) For regulation 50 (marketing by AIFMs of other AIFs), substitute—

“Marketing by full-scope UK AIFMs

50.   A full-scope UK AIFM may not market an AIF in the United Kingdom unless the FCA has approved the marketing in accordance with regulation 54.”.

(7) For regulation 56 (suspension or revocation of approval granted to a full-scope EEA AIFM) substitute—

“Suspension or revocation of approval granted to a full-scope [F57 Gibraltar] AIFM

56.   Regulations 56A to 56C apply where the FCA has approved marketing by a full-scope [F58 Gibraltar AIFM] under regulation 54.

Revocation of approval to market

56A.— (1) The FCA may revoke the AIFM's approval to market an AIF if it appears to the FCA that—

(a) the AIFM has contravened an implementing provision;

(b) the AIFM has, in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(c) the AIF has been wound up; or

(d) none of sub-paragraphs (a) to (c) applies, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(2) If the FCA proposes to revoke an AIFM's approval to market an AIF it must give a warning notice to the AIFM.

(3) If the FCA decides to revoke an AIFM's approval to market an AIF under paragraph (1)—

(a) it must give a decision notice to the AIFM; and

(b) the AIFM may refer the matter to the Tribunal.

Suspension of approval to market

56B.— (1) If one of the grounds in paragraph (2) is met, the FCA may suspend an AIFM's approval to market an AIF for a specified period, until the occurrence of a specified event or until specified conditions are complied with.

(2) The grounds are that it appears to the FCA that—

(a) the AIFM has, in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(b) sub-paragraph (a) does not apply, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(3) In this regulation “specified” means specified by the FCA in a notice given under regulation 56C.

Procedure on suspension

56C.— (1) A suspension under regulation 56B takes effect—

(a) immediately, if the notice given under paragraph (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 the notice relates is no longer open to review.

(2) A suspension may be expressed to take effect immediately (or on a specified date) only if the FCA, having regard to the ground on which it is suspending the AIFM's approval to market, considers that it is necessary for the suspension to take effect immediately (or on that date).

(3) If the FCA proposes to suspend an AIFM's approval to market an AIF, or suspends such approval with immediate effect—

(a) it must give written notice to the AIFM; and

(b) the AIFM may refer the matter to the Tribunal.

(4) A notice under paragraph (3)(a) must—

(a) give details of the suspension;

(b) inform the person to whom it is given of when the suspension takes effect;

(c) state the FCA's reasons for the suspension and for its determination as to when the suspension takes effect;

(d) inform the person to whom it is given that it may make representations to the FCA within such period as may be specified in it (whether or not it has referred the matter to the Tribunal); and

(e) inform the person to whom it is given of their right to refer the matter to the Tribunal.

(5) The FCA may extend the period allowed under the notice for making representations.

(6) Paragraph (7) applies if, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) to make the suspension in the way proposed,

(b) to make the suspension in a way other than that proposed, or

(c) if it has been made, not to revoke the suspension.

(7) If this paragraph applies—

(a) the FCA must give written notice to the AIFM; and

(b) the AIFM may refer the matter to the Tribunal.

(8) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) not to suspend the approval to market in the way proposed, or

(b) to revoke a suspension,

it must give written notice to the AIFM.

(9) For the purposes of paragraph (1)(c), section 391(8) of the Act (publication) applies as if a notice under paragraph (3)(a), (7)(a) or (8) were a supervisory notice.”.

(8) Omit regulations 57 to 64 and the heading preceding regulation 57.

(9) In regulation 71(5) (application of provisions of the Act to unauthorised AIFMs), omit sub-paragraphs (c) to (e).

Textual Amendments

F56 Words in Sch. 2 para. 3(2)(a) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 21(2)(a) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F57 Word in Sch. 2 para. 3(7) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 21(2)(b)(i) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F58 Words in Sch. 2 para. 3(7) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 21(2)(b)(ii) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M23 Amended by paragraph 2 of Schedule 1 to these Regulations

PART 2 U.K. Transitional provisions relating to marketing by third country AIFMs

4.—(1) Sub-paragraphs (2) and (3) apply where— U.K.

(a) an AIFM has given a notification under regulation 58(1) of the principal regulations (marketing of AIFs managed by small third country AIFMs) in respect of an AIF,

(b) an investor has acquired units or shares of the AIF as a result of marketing that is permitted because of that notification, and

(c) the AIFM is not—

[F59 (i) an authorised person with permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity of managing an AIF, or registered under Part 3 of the principal regulations in respect of the AIF otherwise than by virtue of that notification.]

F60 (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The revocation of regulations 58(3) and (4)(a) and 71(5)(d) of the principal regulations by paragraph 3 does not have effect in relation to that AIFM.

(3) In regulation 71(5)(d) of the principal regulations (in so far as it continues to apply by virtue of paragraph (2)) for “that is entitled to market an AIF following notification under regulation 58” substitute “ to which the requirement at regulation 58(3) applies ”;

Textual Amendments

F59 Sch. 2 para. 4(1)(c)(i) substituted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 21(3)(a) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

F60 Sch. 2 para. 4(1)(c)(ii) omitted (31.12.2020) by virtue of The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 21(3)(b) (as amended by S.I. 2019/325, reg. 58); 2020 c. 1, Sch. 5 para. 1(1)

5.—(1) Sub-paragraph (2) applies where— U.K.

(a) an AIFM has given a notification under regulation 59(1) of the principal regulations (marketing under Article 42 of the directive) in respect of an AIF,

(b) an investor has acquired units or shares of the AIF as a result of marketing that is permitted because of that notification, and

(c) the AIFM is not authorised in accordance with Article 37 of the directive in respect of the AIF.

(2) The substitution of regulation 34 of the principal regulations and the revocation of regulations 59(3) and (4)(a) and 71(5)(e) of the principal regulations by paragraph 3 do not have effect in relation to that AIFM.

6.  Any expression used in this Part that is used in the principal regulations has the same meaning as in the principal regulations. U.K.

Explanatory Note

(This note is not part of the Regulations)

These Regulations implement those provisions of Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers (“the Directive”) that must be transposed by 22nd July 2013 but do not come into effect until a date to be specified by the European Commission in a delegated act (“third country provisions”). The Financial Conduct Authority (“FCA”) is responsible for the implementation of other elements of the third country provisions. The parts of the Directive that come into effect on 22nd July 2013 are implemented by the Alternative Investment Fund Managers Regulations 2013 (“the principal regulations”). A transposition note setting out how the Directive will be transposed into United Kingdom law is available on HM Treasury's website (www.hm-treasury.gov.uk).

Regulation 1(3) provides that regulation 3 comes into force on the date on which Articles 35 and 37 to 41 of the Directive become applicable. Regulation 3 introduces Schedule 1, which makes amendments to legislation in order to implement those Articles. In particular, paragraph 1 of Schedule 1 amends section 418 of the Financial Services and Markets Act 2000 (“the Act”) to provide that the management of alternative investment funds is considered to take place in the UK where managers from outside the EEA have the UK as their Member State of reference (as defined in the Directive) and the funds managed are either EEA funds or are marketed in the EEA. Paragraph 1 also amends the Act to provide for such managers, and for UK managers of funds outside the EEA, to have access to the procedure by which UK managers may manage or market EEA funds in other EEA states.

Paragraph 2 of Schedule 1 amends the principal regulations. The effect of the amendments is to apply the regime for authorisation or registration of UK managers of alternative investment funds to managers from outside the EEA that have the UK as their Member State of reference. The amendments also apply provisions relating to the managing and marketing of alternative investment funds by UK managers to managers from outside the EEA that become authorised or registered in the UK. The separate national regime permitting managers from outside the EEA and UK managers of funds from outside the EEA to market their funds in the UK is, however, retained as an alternative. Paragraph 2 also amends the principal regulations to enable EEA managers of funds outside the EEA to market those funds in the UK on the same basis as EEA funds.

Regulation 1(4) provides that regulation 4 comes into force on a later date on which regimes under Articles 36 and 42 of the Directive are to be terminated. Regulation 4 introduces Schedule 2, Part 1 of which makes amendments to legislation to revoke the separate national regime for managers from outside the EEA and UK managers of funds from outside the EEA to market their funds in the UK, with the result that from that point all managers of alternative investment funds managing UK funds or marketing funds in the UK must be authorised in the UK or in another EEA state. Part 2 of Schedule 2 contains transitional provisions to preserve the ongoing obligations of managers from outside the EEA that have marketed funds under those separate national regimes.

Regulation 1(5) provides that regulation 5 comes into force immediately after the principal regulations come into force (on 22nd July 2013). Regulation 5 makes two minor amendments to the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 to correct an error in amendments to those Regulations made by the principal regulations.

Regulation 1(2) provides that regulation 6 comes into force on 22nd July 2013. Regulation 6 provides that the FCA or the Prudential Regulation Authority (“PRA”) may make rules to implement the third country provisions without complying with various procedural requirements imposed under the Act, including the obligation to consult on a draft of the rules before making them. If the FCA or PRA does so, an equivalent consultation will need to be carried out before the rules come into force, unless the rules are revoked before they come into force.

An impact assessment of the effect of the principal regulations on the costs of business and the voluntary sector has been prepared and is available from Her Majesty's Treasury, 1 Horse Guards Road, London, SW1A 2HQ or on www.hm-treasury.gov.uk and is published with the Explanatory Memorandum alongside those Regulations on www.legislation.gov.uk.