HM Treasury has published a draft version of the Collective Investment Schemes (Amendment etc) (EU Exit) Regulations 2018 and an accompanying explanatory note. The SI will make amendments to retained EU law related to the UCITS Directive for investment funds and their managers to ensure it continues to operate effectively after Brexit. The SI:

  • introduces a UK UCITS regime for funds established and authorised in the UK. These funds will be called “UK UCITS”;
  • maintains the existing investment rules for UK UCITS, as under the UCITS Directive;
  • continues to allow the cash of a UK UCITS to be booked in accounts opened with any EEA credit institution;
  • sets out the temporary permissions regime for EEA UCITS (including Money Market Funds which use a UCITS structure);
  • introduces, for EEA UCITS marketing in the UK after exit day, a transitional arrangement which will disapply incorporation requirements of the depositary, trustee, operator and/or manager after exit, for as long as the firm has the temporary permissions needed to continue to carry out the relevant regulated activity in the UK;
  • deletes provisions enabling or referring to cross-border mergers and retains provisions enabling or referring to domestic mergers; and
  • removes provisions in the legislation requiring cooperation and information sharing between UK supervisors and EU authorities.

The FCA will be making relevant rulebook and binding technical standards changes to reflect the amendments introduced through this SI. The FCA intends to consult on these changes in the autumn of 2018. HM Treasury will lay this instrument before Parliament in the autumn of 2018.