Treasury and FSA are consulting on a new protected cell regime for OEICs. As part of the better regulation initiative, Treasury suggested creating the regime to provide better investor protection although in practice it says the likelihood of any OEIC collapse is small. Stakeholders supported a protected cell regime but differed on some details of it. Treasury has now proposed draft legislation to introduce the concept into the OEIC Regulations to cater for segregated liability sub-funds and suitable winding up procedures. The new Regulation 11A makes the protected cell status of OEIC sub-funds compulsory to remove investor confusion, but there will be a one-year transitional period. FSA Rules will also need updating and FSA proposes changes to COLL on notifications and disclosures as well as wind-up provisions and cross sub-fund investments. The paper includes draft legislation and FSA Rules and asks for comment by 27 September.