On 2 February 2016, the FCA published a policy statement (“Statement”) on the UK implementation of the UCITS V Directive. Some of the changes also affect managers of non-UCITS retail schemes (NURS).
In the Statement, the FCA sets out changes to the FCA Handbook which will affect managers and depositaries of UCITS and AIFs, and in some cases, managers of non-UCITS retail schemes (NURS), together with its response to comments on Part I of a consultation paper issued in September 2015 (“Consultation Paper”), including the following:
- Changes to guidance on payments in non-cash instruments.
- Clarification as to whether consequential changes to the prospectus and scheme documents, following the implementation of UCITS V, will require FCA approval.
- Managers of NURs are no longer required to disclose the list of the depositary's delegates and sub-delegates in the prospectus.
- Clarification of the FCA's position with regard to the level of infrastructures that non-bank depositaries must have in place when delegating the safekeeping function to a third party, and that UCITS depositaries will be able to delegate the performance of administrative and technical tasks to a third party.
- Changes to the proposed rules in the client assets sourcebook (CASS) to clarify which of the CASS 6.6 requirements will remain applicable to depositaries of UCITS until the level 2 regulation comes into force.
The final rules are set out in the UCITS V Directive Instrument 2016 (FCA 2016/4). The rules and guidance will come into force on 18 March 2016 being the date by which UCITS V must be implemented. There are also transitional provisions applying to some of the final requirements, which run for up to two years, starting from 18 March 2016.
The FCA is aware of the mismatch between the time when the UCITS V requirements come into force and when the detailed provisions supplementing some of these requirements will become applicable to firms. During this period, the FCA expects firms to make efforts to comply with the UCITS V requirements as of 18 March 2016 (unless a relevant transitional provision applies). Once the Level 2 regulation is finalised, the FCA will consider whether any such consequential changes to its rules and guidance are needed. In addition, once ESMA has finalised its UCITS V remuneration guidelines (expected in the first quarter of 2016), the FCA will consider whether further guidance is needed on applying its UCITS V Remuneration Code principles.
Final rules and guidance relating to Parts II and III of the Consultation Paper, together with feedback, will be published separately.