On February 25, the UK government published the Undertakings for Collective Investment in Transferable Securities Regulations 2016 (Regulations) along with an explanatory memorandum and transposition table. The Regulations implement provisions in the EU Undertakings for the Collective Investment of Transferable Securities V Directive (UCITS V) in relation to depositaries and sanctions, among other provisions.The Regulations set out amendments to the Financial Services and Markets Act 2000 (FSMA 2000) and the Undertakings for Collective Investment in Transferable Securities Regulations 2011 (UCITS Regulations), among others.
UCITS funds are regulated by the Financial Conduct Authority (FCA) in the United Kingdom and the transposition table accompanying the Regulations sets out the transposition impact of UCITS V, particularly in relation to existing FCA rules. Notably, the amendments set out in the Regulations allow the FCA to cancel an authorized person’s Part 4A permission to carry on regulated activities, where there are serious breaches of FSMA 2000 or the UCITS Regulations. The Regulations also set out amendments relating to the liability of a depositary or management company of the UCITS, where there is a loss of a financial instrument held in custody or where other losses are suffered as a result of the depositary’s negligent or intentional failure to uphold its obligations.
The Regulations go into effect on March 18.
For further information on the implementation of UCITS V, see the Corporate & Financial Weekly Digest edition of February 12 and September 11, 2015.
UCITS V can be found here.
The Regulations can be found here.