On 17 July 2024, the Financial Conduct Authority (FCA) published a policy statement (PS24/7) setting out the final rules and guidance necessary to implement the UK’s Overseas Funds Regime (OFR). This follows the FCA’s December 2023 consultation on the implementation of the OFR (CP23/26). The OFR and CP23/26 are explored in further detail in our previous article (available here).
The OFR will be a new gateway through which certain collective investment schemes, domiciled in jurisdictions deemed to be equivalent to UK-domiciled funds by the UK Government, will be able to be marketed to UK retail investors. It is anticipated that in due course most European Economic Area (EEA) undertakings for collective investment in transferable securities (UCITS) and exchange-traded funds will be eligible for recognition under the OFR.
In light of the responses to CP23/26, the FCA has amended certain of its original proposals. In particular, the final rules and guidance in PS24/7:
- remove the proposed 30-day period between notifying the FCA of changes to OFR funds and when those changes could take effect in the UK;
- provide further clarification as to which categories of fund changes should be notified to the FCA;
- set out guidance regarding additional information in disclosures for fund prospectuses and point of sale information;
- clarify which UK fund prospectus requirements apply to OFR funds; and
- confirm the FCA will not reject an OFR application on the basis of the fund having an identical name to a UK authorised fund.
Notably, the FCA has not changed the information that will need to be submitted by a management company about each scheme applying under the OFR.
The final rules and guidance will come into force on 31 July 2024. The OFR gateway is expected to open in late 2024 for EEA UCITS funds, except for money-market funds.
PS24/7 is available here.
