The Government is aware that there is significant uncertainty over whether certain types of property transaction fall within the definition of a collective investment scheme (CIS) as set out under section 235 Financial Services and Markets Act 2000 (FSMA).

There is a general prohibition on establishing, operating or winding up a CIS without prior authorisation from the FSA. However, the Schedule to the FSMA Collective Investment Schemes Order 2001 (CIS Exemption Order) sets out certain instances in which arrangements which would otherwise be considered CISs under FSMA are exempt and can be established without FSA authorisation.

HM Treasury has now published a consultation document on the amendments to the CIS border for property transactions. This consultation document sets out HM Treasury's suggestions for amending the Schedule to the CIS Exemption Order to give greater clarity over what types of property transaction may benefit from the exemption. The consultation closes on 29 March 2007.