(1) A complaint which relates to an act or omission of a person (“the respondent”) in carrying on an activity to which voluntary jurisdiction rules apply is to be dealt with under the ombudsman scheme if the conditions mentioned in subsection (2) are satisfied.
(2) The conditions are that—
(a) the complainant is eligible and wishes to have the complaint dealt with under the scheme;
(b) at the time of the act or omission to which the complaint relates, the respondent was participating in the scheme;
(c) at the time when the complaint is referred under the scheme, the respondent has not withdrawn from the scheme in accordance with its provisions;
(d) the act or omission to which the complaint relates occurred at a time when voluntary jurisdiction rules were in force in relation to the activity in question; and
(e) the complaint cannot be dealt with under the compulsory jurisdiction ....
(3) “Voluntary jurisdiction rules” means rules—
(a) made by the scheme operator for the purposes of this section; and
(b) specifying the activities to which they apply.
(4) The only activities which may be specified in the rules are activities which are, or could be, specified in compulsory jurisdiction rules.
(5) Activities may be specified by reference to specified categories (however described).
(6) The rules require the FCA's approval.
(7) A complainant is eligible, in relation to the voluntary jurisdiction of the ombudsman scheme, if he falls within a class of person specified in the rules as eligible.
(8) The rules may include provision for persons other than individuals to be eligible.
(9) A person qualifies for participation in the ombudsman scheme if he falls within a class of person specified in the rules in relation to the activity in question.
(10) Provision may be made in the rules for persons other than authorised persons to participate in the ombudsman scheme.
(11) The rules may make different provision in relation to complaints arising from different activities.
(12) The jurisdiction of the scheme which results from this section is referred to in this Act as the “voluntary jurisdiction”.
(13) In such circumstances as may be specified in voluntary jurisdiction rules, a complaint—
(a) which relates to an act or omission occurring at a time before the rules came into force, and
(b) which could have been dealt with under a scheme which has to any extent been replaced by the voluntary jurisdiction,
is to be dealt with under the ombudsman scheme even though paragraph (b) or (d) of subsection (2) would otherwise prevent that.
(14) In such circumstances as may be specified in voluntary jurisdiction rules, a complaint is to be dealt with under the ombudsman scheme even though—
(a) paragraph (b) or (d) of subsection (2) would otherwise prevent that, and
(b) the complaint is not brought within the scheme as a result of subsection (13),
but only if the respondent has agreed that complaints of that kind were to be dealt with under the scheme.
228 Determination under the compulsory jurisdiction.
(1) This section applies only in relation to the compulsory jurisdiction ....
(2) A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case.
(3) When the ombudsman has determined a complaint he must give a written statement of his determination to the respondent and to the complainant.
(4) The statement must—
(a) give the ombudsman’s reasons for his determination;
(b) be signed by him; and
(c) require the complainant to notify him ..., before a date specified in the statement, whether he accepts or rejects the determination.
(5) If the complainant notifies the ombudsman that he accepts the determination, it is binding on the respondent and the complainant and final.
(6) If, by the specified date, the complainant has not notified the ombudsman of his acceptance or rejection of the determination he is to be treated as having rejected it.
(6A) But the complainant is not to be treated as having rejected the determination by virtue of subsection (6) if—
(a) the complainant notifies the ombudsman after the specified date of the complainant's acceptance of the determination,
(b) the complainant has not previously notified the ombudsman of the complainant's rejection of the determination, and
(c) the ombudsman is satisfied that such conditions as may be prescribed by rules made by the scheme operator for the purposes of this section are satisfied.
(7) The ombudsman must notify the respondent of the outcome.
(7A) Where a determination is rejected by virtue of subsection (6), the notification under subsection (7) must contain a general description of the effect of subsection (6A).
(8) A copy of the determination on which appears a certificate signed by an ombudsman is evidence (or in Scotland sufficient evidence) that the determination was made under the scheme.
(9) Such a certificate purporting to be signed by an ombudsman is to be taken to have been duly signed unless the contrary is shown.
(1) This section applies only in relation to the compulsory jurisdiction ....
(2) If a complaint which has been dealt with under the scheme is determined in favour of the complainant, the determination may include—
(a) an award against the respondent of such amount as the ombudsman considers fair compensation for loss or damage (of a kind falling within subsection (3)) suffered by the complainant (“a money award”);
(b) a direction that the respondent take such steps in relation to the complainant as the ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).
(3) A money award may compensate for—
(a) financial loss; or
(b) any other loss, or any damage, of a specified kind.
(4) The FCA may specify for the purposes of the compulsory jurisdiction the maximum amount which may be regarded as fair compensation for a particular kind of loss or damage specified under subsection (3)(b).
(4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) A money award may not exceed the monetary limit; but the ombudsman may, if he considers that fair compensation requires payment of a larger amount, recommend that the respondent pay the complainant the balance.
(6) The monetary limit is such amount as may be specified.
(7) Different amounts may be specified in relation to different kinds of complaint.
(8) A money award—
(a) may provide for the amount payable under the award to bear interest at a rate and as from a date specified in the award; and
(b) is enforceable by the complainant in accordance with Part III of Schedule 17 ....
(9) Compliance with a direction under subsection (2)(b)—
(a) is enforceable by an injunction; or
(b) in Scotland, is enforceable by an order under section 45 of the Court of Session Act 1988.
(10) Only the complainant may bring proceedings for an injunction or proceedings for an order.
(11) “Specified” means specified in compulsory jurisdiction rules.
(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) The scheme operator may by rules (“costs rules”) provide for an ombudsman to have power, on determining a complaint under the compulsory jurisdiction ..., to award costs in accordance with the provisions of the rules.
(2) Costs rules require the approval of the FCA.
(3) Costs rules may not provide for the making of an award against the complainant in respect of the respondent’s costs.
(4) But they may provide for the making of an award against the complainant in favour of the scheme operator, for the purpose of providing a contribution to resources deployed in dealing with the complaint, if in the opinion of the ombudsman—
(a) the complainant’s conduct was improper or unreasonable; or
(b) the complainant was responsible for an unreasonable delay.
(5) Costs rules may authorise an ombudsman making an award in accordance with the rules to order that the amount payable under the award bears interest at a rate and as from a date specified in the order.
(6) An amount due under an award made in favour of the scheme operator is recoverable as a debt due to the scheme operator.
(7) Any other award made against the respondent is to be treated as a money award for the purposes of paragraph 16 of Schedule 17 ....
(1) The scheme operator must publish a report of any determination made under this Part.
(2) But if the ombudsman who makes the determination informs the scheme operator that, in the ombudsman's opinion, it is inappropriate to publish a report of that determination (or any part of it) the scheme operator must not publish a report of that determination (or that part).
(3) Unless the complainant agrees, a report of a determination published by the scheme operator may not include the name of the complainant, or particulars which, in the opinion of the scheme operator, are likely to identify the complainant.
(4) The scheme operator may charge a reasonable fee for providing a person with a copy of a report.
(1) An ombudsman may, by notice in writing given to a party to a complaint, require that party—
(a) to provide specified information or information of a specified description; or
(b) to produce specified documents or documents of a specified description.
(2) The information or documents must be provided or produced—
(a) before the end of such reasonable period as may be specified; and
(b) in the case of information, in such manner or form as may be specified.
(3) This section applies only to information and documents the production of which the ombudsman considers necessary for the determination of the complaint.
(4) If a document is produced in response to a requirement imposed under this section, the ombudsman may—
(a) take copies or extracts from the document; or
(b) require the person producing the document to provide an explanation of the document.
(5) If a person who is required under this section to produce a document fails to do so, the ombudsman may require him to state, to the best of his knowledge and belief, where the document is.
(6) If a person claims a lien on a document, its production under this Part does not affect the lien.
(7) “Specified” means specified in the notice given under subsection (1).
(1) If a person (“the defaulter”) fails to comply with a requirement imposed under section 231, the ombudsman may certify that fact in writing to the court and the court may enquire into the case.
(2) If the court is satisfied that the defaulter failed without reasonable excuse to comply with the requirement, it may deal with the defaulter (and, in the case of a body corporate, any director or other officer) as if he were in contempt ; and “officer”, in relation to a limited liability partnership, means a member of the limited liability partnership..
(3) “Court” means—
(a) the High Court;
(b) in Scotland, the Court of Session.
232A Scheme operator's duty to provide information to FCA
(1) If the scheme operator considers that it has information that, in its opinion, would or might be of assistance to the FCA in advancing one or more of the FCA's operational objectives , or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1)),, it must disclose that information to the FCA.
(2) The reference in subsection (1) to the FCA’s operational objectives includes, in its application as a secondary objective, the competitiveness and growth objective (see section 1EB).
In section 31 of the Data Protection Act 1998 (regulatory activity), after subsection (4), insert—
(4A) Personal data processed for the purpose of discharging any function which is conferred by or under Part XVI of the Financial Services and Markets Act 2000 on the body established by the Financial Services Authority for the purposes of that Part are exempt from the subject information provisions in any case to the extent to which the application of those provisions to the data would be likely to prejudice the proper discharge of the function.
(1) For the purpose of funding—
(a) the establishment of the ombudsman scheme (whenever any relevant expense is incurred), and
(b) its operation in relation to the compulsory jurisdiction,
the FCA may make rules requiring the payment to it or to the scheme operator, by authorised persons or any class of authorised person , any electronic money issuer within the meaning of the Electronic Money Regulations 2011or any payment service provider within the meaning of the Payment Services Regulations 2017 of specified amounts (or amounts calculated in a specified way).
(2) “Specified” means specified in the rules.
(1) This section applies where a person (the “successor”) has assumed a liability (including a contingent one) of a person (the “predecessor”) who was, or (apart from this section) would have been, the respondent in respect of a complaint falling to be dealt with under the ombudsman scheme.
(2) The complaint may (but need not) be dealt with under this Part as if the successor were the respondent.
(1) A designated consumer body may make a complaint to the FCA that a feature, or combination of features, of a market in the United Kingdom for financial services or of a market in Great Britain for claims management services is, or appears to be, significantly damaging the interests of consumers.
(1A) But a complaint may not be made to the FCA under this section if it is a complaint which could be made to the Payment Systems Regulator by a designated representative body under section 68 of the Financial Services (Banking Reform) Act 2013 (complaints by representative bodies).
“Designated representative body” and “the Payment Systems Regulator” have the same meaning in this subsection as they have in that section.
(2) “Designated consumer body” means a body designated by the Treasury by order.
(3) The Treasury—
(a) may designate a body only if it appears to them to represent the interests of consumers of any description, and
(b) must publish in such manner as they think fit (and may from time to time vary) criteria to be applied by them in determining whether to make or revoke a designation.
(4) Sections 425A and 425B (meaning of “consumers”) apply for the purposes of this section, but the references to consumers in this section do not include consumers who are authorised persons.
(5) In this section—
(a) “market in the United Kingdom” has the meaning given in section 140A (and “market in Great Britain” is to be construed accordingly);
(b) the reference to a feature of a market in the United Kingdom for financial services , or of a market in Great Britain for claims management services, has a meaning corresponding to that which a reference to a feature of a market in the United Kingdom for goods and services has (by virtue of section 140A(3)) for the purposes of Chapter 4 of Part 9A.
234D Reference by scheme operator or regulated person
(1) A relevant person may make a reference to the FCA where it appears to that person that either the first set of conditions or the second set of conditions are satisfied.
(2) Each of the following is a “relevant person”—
(a) the scheme operator;
(b) a regulated person.
(3) The first set of conditions is—
(a) that there may have been—
(i) in the case of a reference by the scheme operator, a regular failure by one or more regulated persons to comply with requirements applicable to the carrying on by them of any activity, or
(ii) in the case of a reference by a regulated person, a regular failure by that person to comply with requirements applicable to the carrying on by that person of any activity, and
(b) that as a result consumers have suffered, or may suffer, loss or damage in respect of which, if they brought legal proceedings, a remedy or relief would be available in the proceedings.
(4) The reference to the failure by a regulated person (“R”) to comply with a requirement applicable to the carrying on by R of any activity includes anything done, or omitted to be done, by R in carrying on the activity—
(a) which is a breach of a duty or other obligation, prohibition or restriction, or
(b) which otherwise gives rise to the availability of remedy or relief in legal proceedings.
(5) It does not matter whether—
(a) the duty or other obligation, prohibition or restriction, or
(b) the remedy or relief,
arises as a result of any provision made by or under this or any other Act, a rule of law or otherwise.
(6) The second set of conditions is—
(a) in the case of a reference by the scheme operator, that one or more regulated persons have, on a regular basis, acted or failed to act, in such a way that, if a complaint were made under the ombudsman scheme in relation to that conduct, the ombudsman would be likely to determine the complaint in favour of the complainant,
(b) in the case of a reference by a regulated person, that the regulated person has, on a regular basis, acted or failed to act in such a way that, if a complaint were made under the ombudsman scheme in relation to that conduct, the ombudsman would be likely to determine the complaint in favour of the complainant, and
(c) in either case, that—
(i) if the complaint would fall within the compulsory jurisdiction ..., the ombudsman would be likely to make an award under section 229(2)(a) or give a direction under section 229(2)(b), or
(ii) if voluntary jurisdiction rules made for the purposes of section 227 provide for the making of an award against a respondent or the giving of a direction that a respondent take certain steps in relation to a complainant, and the complaint would fall within the voluntary jurisdiction, the ombudsman would be likely to make such an award or give such a direction.
(7) “Consumers” has the meaning given in section 1G.
(8) “Regulated person” means—
(a) an authorised person;
(b) an electronic money issuer, as defined in section 1H(8);
(c) a payment service provider, as defined in section 1H(8).
(1) The FCA must within 90 days after the day on which it receives a complaint under section 234C or a reference under section 234D publish a response stating how it proposes to deal with the complaint or reference, and in particular—
(a) whether it has decided to take any action, or to take no action, and
(b) if it has decided to take action, what action it proposes to take.
(2) The response must—
(a) include a copy of the complaint or reference, and
(b) state the FCA's reasons for its proposals.
(3) The Treasury may by order amend subsection (1) by substituting any period for the period for the time being specified there.
(1) This section applies where the FCA has received a reference under section 234D from a person who is a relevant person as a result of subsection (2)(b) of that section.
(2) The duty to respond in section 234E does not apply if the FCA considers that the reference is frivolous, vexatious or has been made in bad faith.
(3) The FCA must within 90 days after the day on which it receives the reference inform the person who made it—
(a) that the duty to respond under section 234E does not apply by virtue of this section, and
(b) of its reasons for reaching the conclusion in paragraph (a).
(4) The Treasury may by order amend subsection (3) by substituting any period for the period for the time being specified there.
(1) The guidance given by the FCA under section 139A—
(a) must include guidance about the presentation of a reasoned case for a complaint under section 234C or a reference under section 234D, and
(b) may include guidance about such other matters as appears to the FCA to be appropriate for the purposes of section 234C or 234D.
(2) Guidance given under this section is to be taken to be general guidance as defined in section 139B(5).
234I The FCA's functions under Part 4 of the Enterprise Act 2002
(1) The functions to which this subsection applies (“the concurrent functions”) are to be concurrent functions of the FCA and the Competition and Markets Authority (referred to in this Part as “the CMA”).
(2) Subsection (1) applies to the functions of the CMA under Part 4 of the Enterprise Act 2002 (market investigations), so far as those functions—
(a) are exercisable by the CMA Board (within the meaning of Schedule 4 to the Enterprise and Regulatory Reform Act 2013), and
(b) relate to the provision of financial services or to the provision of claims management services in Great Britain.
(3) But subsection (1) does not apply to functions under the following sections of the Enterprise Act 2002—
section 166 (duty to maintain register of undertakings and orders);
section 167C (statement of policy in relation to functions under sections 167 and 167A);
section 171 (duty to publish guidance).
section 174E (statement of policy on penalties).
(4) So far as is necessary for the purposes of, or in connection with, subsections (1) and (2)—
(a) references in Part 4 of the Enterprise Act 2002 to the CMA (including references in provisions of that Act applied by that Part) are to be read as including references to the FCA, and
(b) references in that Part to section 5 of that Act are to be read as including references to section 234M of this Act.
(5) But subsection (4) does not apply—
(a) in relation to section 166 , 167C, 171 or 174E of that Act, or
(b) where the context otherwise requires.
(6) Section 130A of the Enterprise Act 2002 has effect in relation to the FCA by virtue of subsections (1) and (2) as if—
(a) in subsection (2)(a) of that section, the reference to the acquisition or supply of goods or services of one or more than one description in the United Kingdom were a reference to the acquisition or provision in the United Kingdom of financial services or in Great Britain of claims management services, and
(b) in subsection (2)(b) of that section, the reference to the extent to which steps can and should be taken were a reference to the extent to which steps that might include steps under Part 4 of that Act can and should be taken.
(7) Before the CMA or the FCA first exercises any of the concurrent functions in relation to any matter, it must consult the other.
(8) Neither the CMA nor the FCA may exercise any of the concurrent functions in relation to any matter if any of those functions have been exercised in relation to that matter by the other.
(9) In making any decision, or otherwise taking action, for the purposes of any of its functions that, by virtue of this section, are functions exercisable concurrently with the CMA, the FCA must have regard to the need for making a decision, or taking action, as soon as reasonably practicable.
234J The FCA's functions under the Competition Act 1998
(1) The functions to which this subsection applies are to be concurrent functions of the FCA and the CMA.
(2) Subsection (1) applies to the functions of the CMA under the provisions of Part 1 of the Competition Act 1998, so far as relating to any of the following that relate to the provision of financial services or relate to the provision of claims management services in Great Britain—
(a) agreements, decisions or concerted practices of the kind mentioned in section 2(1) of that Act,
(b) conduct of the kind mentioned in section 18(1) of that Act, and
(c) transferred EU anti-trust commitments or transferred EU anti-trust directions (as defined in section 40ZA of that Act).
(3) But subsection (1) does not apply to functions under the following provisions of that Act—
section 31D(1) to (6) (duty to publish guidance);
section 35C (statement of policy in relation to functions under sections 31E, 34 and 35A);
section 38(1) to (6) (duty to publish guidance about penalties);
section 40B(1) to (4) (duty to publish statement of policy on penalties);
section 51 (rules).
(4) So far as necessary for the purposes of, or in connection with, the provisions of subsections (1) and (2), references to the CMA in Part 1 of the Competition Act 1998 (including references in provisions of the Enterprise Act 2002 applied by that Part) are to be read as including references to the FCA.
(5) But subsection (4) does not apply—
(a) in relation to sections 31D(1) to (6) , 35C, 38(1) to (6), 40B(1) to (4), 51, 52(6) and (8) and 54 of that Act, or
(b) where the context otherwise requires.
(6) In making any decision, or otherwise taking action, for the purposes of any of its functions that—
(a) by virtue of this section, are functions exercisable concurrently with the CMA, and
(b) are functions within Schedule 4A to the Enterprise and Regulatory Reform Act 2013 by virtue of paragraph 5 of that Schedule,
the FCA must have regard to the need for making a decision, or taking action, as soon as reasonably practicable.
234K Duty to consider exercise of powers under Competition Act 1998
(1) Before exercising a power listed in subsection (3), the FCA must consider whether it would be more appropriate to proceed under the Competition Act 1998.
(2) The FCA must not exercise such a power if it considers that it would be more appropriate to proceed under the Competition Act 1998.
(3) Those powers are—
(a) the power under section 55J(2) to vary or cancel a Part 4A permission;
(b) the power under section 55L to impose a requirement on an authorised person with a Part 4A permission, or to vary a requirement imposed under that section;
(c) the power to take action under section 88E;
(d) the power to take action under section 89U;
(e) the power to give a direction under section 192C;
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
234L Provision of information and assistance to a CMA group
(1) For the purpose of assisting a CMA group in carrying out a relevant investigation, the FCA must give the CMA group—
(a) any relevant information which the FCA has in its possession, and
(b) any other assistance which the CMA group may reasonably require in relation to any matters falling within the scope of the investigation.
(2) A “relevant investigation” is an investigation carried out on a reference made by the FCA under section 131 of the Enterprise Act 2002 by virtue of section 234I.
(3) “Relevant information”, in relation to a relevant investigation, is information—
(a) which relates to matters falling within the scope of the investigation, and
(b) which—
(i) is requested by the CMA group for the purpose of the investigation, or
(ii) in the FCA's opinion, it would be appropriate to give to the CMA group for that purpose.
(4) A CMA group, in carrying out a relevant investigation, must take into account any information given to it under this section.
(5) In this section “CMA group” has the same meaning as in Schedule 4 to the Enterprise and Regulatory Reform Act 2013.
(1) For the purpose of the functions conferred on it by sections 234I to 234L the FCA is to have the function of keeping under review the market for financial services and the market in Great Britain for claims management services.
(2) The function conferred by subsection (1) is to be carried out with a view to (among other things) ensuring that the FCA has sufficient information to take informed decisions and to carry out its other functions effectively.
(1) Section 1B (the FCA's general duties) does not apply in relation to anything done by the FCA in the carrying out of its functions by virtue of sections 234I to 234L.
(2) But in the carrying out of any functions by virtue of sections 234I to 234L, the FCA may have regard to any of the matters in respect of which a duty is imposed by section 1B if it is a matter to which the CMA is entitled to have regard in the carrying out of those functions.
(1) If any question arises as to whether, by virtue of section 234I or 234J, any functions fall to be, or are capable of being, carried out by the FCA in relation to any particular case, that question is to be referred to, and determined by, the Treasury.
(2) No objection is to be taken to anything done under the Competition Act 1998 or Part 4 of the Enterprise Act 2002 by or in relation to the FCA on the ground that it should have been done by or in relation to the CMA.
(1) In this Part “collective investment scheme” means any arrangements with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.
(2) The arrangements must be such that the persons who are to participate (“participants”) do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions.
(3) The arrangements must also have either or both of the following characteristics—
(a) the contributions of the participants and the profits or income out of which payments are to be made to them are pooled;
(b) the property is managed as a whole by or on behalf of the operator of the scheme.
(4) If arrangements provide for such pooling as is mentioned in subsection (3)(a) in relation to separate parts of the property, the arrangements are not to be regarded as constituting a single collective investment scheme unless the participants are entitled to exchange rights in one part for rights in another.
(5) The Treasury may by order provide that arrangements do not amount to a collective investment scheme—
(a) in specified circumstances; or
(b) if the arrangements fall within a specified category of arrangement.
(1) In this Part “contractual scheme” means—
(a) a co-ownership scheme; or
(b) a partnership scheme.
(2) In this Part “co-ownership scheme” means a collective investment scheme which satisfies the conditions in subsection (3).
(3) The conditions are—
(a) that the arrangements constituting the scheme are contractual;
(b) that they are set out in a deed that is entered into between the operator and a depositary and meets the requirements of subsection (4);
(c) that the scheme does not constitute a body corporate, a partnership or a limited partnership;
(d) that the property subject to the scheme is held by, or to the order of, a depositary; and
(e) that either—
(i) the property is beneficially owned by the participants as tenants in common (or, in Scotland, is the common property of the participants); or
(ii) where the arrangements constituting the scheme provide for such pooling as is mentioned in section 235(3)(a) in relation to separate parts of the property, each part is beneficially owned by the participants in that part as tenants in common (or, in Scotland, is the common property of the participants in that part).
(4) The deed—
(a) must contain a statement that the arrangements are intended to constitute a co-ownership scheme as defined in section 235A of the Financial Services and Markets Act 2000;
(b) must make provision for the issue and redemption of units;
(c) must—
(i) prohibit the transfer of units,
(ii) allow units to be transferred only if specified conditions are met, or
(iii) where the arrangements constituting the scheme provide for such pooling as is mentioned in section 235(3)(a) in relation to separate parts of the property, in relation to each separate part make provision falling within sub-paragraph (i) or (ii);
(d) must authorise the operator—
(i) to acquire, manage and dispose of property subject to the scheme; and
(ii) to enter into contracts which are binding on participants for the purposes of, or in connection with, the acquisition, management or disposal of property subject to the scheme; and
(e) must make provision requiring the operator and depositary to wind up the scheme in specified circumstances.
(5) In this Part “partnership scheme” means a collective investment scheme which satisfies the conditions in subsection (6).
(6) The conditions are—
(a) that the scheme is a limited partnership;
(aa) that the limited partnership is not designated under section 8(2) of the Limited Partnerships Act 1907 as a private fund limited partnership;
(b) that the limited partnership—
(i) at any time has only one general partner; and
(ii) on formation has only one limited partner, who is a person nominated by the general partner (“the nominated partner”);
(c) that the arrangements constituting the partnership are set out in a deed that is entered into between the general partner and the nominated partner;
(d) that the deed prohibits such pooling as is mentioned in section 235(3)(a) in relation to separate parts of the property; and
(e) that the deed provides that if an authorisation order is made in respect of the limited partnership under section 261D(1)—
(i) the property subject to the scheme is to be held by, or to the order of, a person appointed to be a depositary;
(ii) the limited partners, other than the nominated partner, are to be the participants in the scheme; and
(iii) the partnership is not dissolved on any person ceasing to be a limited partner provided that there remains at least one limited partner.
(7) In this section “general partner”, “limited partner” and “limited partnership” have the same meaning as in the Limited Partnerships Act 1907.
(8) In this Part “contractual scheme deed” means—
(a) in relation to a co-ownership scheme, the deed referred to in subsection (3)(b); and
(b) in relation to a partnership scheme, the deed referred to in subsection (6)(c).
(1) In this Part “an open-ended investment company” means a collective investment scheme which satisfies both the property condition and the investment condition.
(2) The property condition is that the property belongs beneficially to, and is managed by or on behalf of, a body corporate (“BC”) having as its purpose the investment of its funds with the aim of—
(a) spreading investment risk; and
(b) giving its members the benefit of the results of the management of those funds by or on behalf of that body.
(3) The investment condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme—
(a) expect that he would be able to realize, within a period appearing to him to be reasonable, his investment in the scheme (represented, at any given time, by the value of shares in, or securities of, BC held by him as a participant in the scheme); and
(b) be satisfied that his investment would be realized on a basis calculated wholly or mainly by reference to the value of property in respect of which the scheme makes arrangements.
(4) In determining whether the investment condition is satisfied, no account is to be taken of any actual or potential redemption or repurchase of shares or securities under—
(a) Chapters 3 to 7 of Part 18 of the Companies Act 2006;
(c) ... or
(d) provisions in force in a country or territory ... which the Treasury have, by order, designated as corresponding provisions.
(5) The Treasury may by order amend the definition of “an open-ended investment company” for the purposes of this Part.
(1) For the purposes of this Act, and subject to subsection (4), “UCITS” means an undertaking established in the United Kingdom or an EEA State—
(a) with the sole object of collective investment, operating on the principle of risk-spreading, in transferable securities or other liquid financial assets mentioned in subsection (3), of capital raised from the public; and
(b) with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of the undertaking's assets.
(2) A UCITS may consist of several sub-funds (see section 237(4)).
(3) The transferable securities or other liquid financial assets referred to in subsection (1)(a) are—
(a) in the case of an undertaking established in the United Kingdom, those permitted by section 2 of chapter 5 of the Collective Investment Schemes sourcebook; or
(b) in the case of an undertaking established in an EEA State, those referred to in Article 50(1) of the UCITS directive.
(4) For the purposes of subsection (1)(b), action taken by the undertaking to ensure that the price of its units on an investment exchange does not significantly vary from their net asset value is to be regarded as equivalent to the repurchase or redemption of units at the request of holders.
(5) An undertaking is not a UCITS if it is any of the following—
(a) a collective investment undertaking of the closed-ended type;
(b) a collective investment undertaking which raises capital without promoting the sale of its units to the public within the relevant area or any part of it;
(c) an open-ended investment company, or other collective investment undertaking, the units of which may, under its fund rules or instruments of incorporation, be sold only to the public in countries or territories outside the relevant area.
(6) In subsection (5) “the relevant area” means—
(a) in the case of an undertaking established in the United Kingdom, the United Kingdom;
(b) in the case of an undertaking established in an EEA State, the EEA States.
(1) In this Part “unit trust scheme” means a collective investment scheme under which the property is held on trust for the participants , except that it does not include a contractual scheme.
(2) In this Part—
“trustee”, in relation to a unit trust scheme, means the person holding the property in question on trust for the participants;
“depositary”, in relation to—
a collective investment scheme which is constituted by a body incorporated by virtue of regulations under section 262, or
any other collective investment scheme which is not a unit trust scheme,
means any person to whom the property subject to the scheme is entrusted for safekeeping;
“management company” means an undertaking, as defined in section 1161 of the Companies Act 2006, whose regular business is the management of UK UCITS;
“the operator”—
in relation to a unit trust scheme with a separate trustee, means the manager;
in relation to a co-ownership scheme, means the operator appointed under the terms of the contractual scheme deed;
in relation to a partnership scheme, means the general partner; ...
in relation to an open-ended investment company, means that company; ... , and
in relation to a recognised scheme, means the legal entity with overall responsibility for the management and performance of the functions of the scheme.
...
“units” means the rights or interests (however described) of the participants in a collective investment scheme.
“working day” has the meaning given in section 191G(2).
(3) In this Part—
“an authorised unit trust scheme” means a unit trust scheme which is authorised for the purposes of this Act by an authorisation order in force under section 243;
“an authorised contractual scheme” means a contractual scheme which is authorised for the purposes of this Act by an authorisation order in force under section 261D(1);
“an authorised open-ended investment company” means a body incorporated by virtue of regulations under section 262 in respect of which an authorisation order is in force under any provision made in such regulations by virtue of subsection (2)(l) of that section;
“the Collective Investment Schemes sourcebook” means the Collective Investment Schemes sourcebook made under this Act by the FCA, as it has effect on IP completion day;
“EEA UCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State;
...
“feeder UCITS” means—
a UK UCITS which has been approved by the FCA to invest 85% or more of the total property which is subject to the collective investment scheme constituted by the UK UCITS in units of—
another UK UCITS,
a sub-fund of another UK UCITS,
an EEA UCITS, or
a sub-fund of an EEA UCITS, or
a sub-fund of a UK UCITS which has been approved by the FCA to invest 85% or more of the sub-fund's separate pool of the property of the UK UCITS in units of—
another UK UCITS,
another sub-fund of a UK UCITS,
an EEA UCITS, or
a sub-fund of an EEA UCITS;
“master UCITS”, in relation to a feeder UCITS, means (as the case may be)—
the other UK UCITS mentioned in paragraph (a)(i) or (b)(i) of the definition of “feeder UCITS”,
the EEA UCITS mentioned in paragraph (a)(iii) or (b)(iii) of that definition, or
the sub-fund mentioned in paragraph (a)(ii) or (iv) or (b)(ii) or (iv) of that definition;
“a recognised scheme” means a section 271A scheme or a scheme recognised under section ... 272 (and see also section 282C).
“a section 271A scheme” means a scheme recognised under section 271A (and see also section 271S);
...
“UCITS-related direct EU legislation” means—
Commission Regulation (EU) 2010/583 of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament and of the Council as regards key investor information and conditions to be met when providing key investor information or the prospectus in a durable medium other than paper or by means of a website, or
Commission Delegated Regulation (EU) 2016/438 of 17 December 2015 supplementing Directive 2009/65/EC of the European Parliament and of the Council with regard to obligations of depositaries;
“UK UCITS” means a UCITS which is an authorised unit trust scheme , an authorised contractual scheme or an authorised open-ended investment company.
(4) In this Part, references to a sub-fund of a UCITS are references to a part of the property of the UCITS which forms a separate pool where—
(a) the UCITS provides arrangements for separate pooling of the contributions of the participants and the profits and income out of which payments are made to them; and
(b) the participants are entitled to exchange rights in one pool for rights in another.
(5) In this Part “umbrella co-ownership scheme” means an authorised contractual scheme which satisfies the conditions in subsection (6).
(6) The conditions are—
(a) that the scheme is a co-ownership scheme;
(b) that the arrangements constituting the scheme provide for such pooling as is mentioned in section 235(3)(a) in relation to separate parts of the property; and
(c) that the participants are entitled under the terms of the scheme to exchange rights in one part for rights in another.
(7) In this Part “sub-scheme”, in relation to an umbrella co-ownership scheme, means the arrangements constituting the scheme so far as they relate to a separate part of the property.
(8) In this Part “stand-alone co-ownership scheme” means an authorised contractual scheme which—
(a) is a co-ownership scheme; and
(b) is not an umbrella co-ownership scheme.
(1) An authorised person must not communicate an invitation or inducement to participate in a collective investment scheme.
(2) But that is subject to the following provisions of this section and to section 239.
(3) Subsection (1) applies in the case of a communication originating outside the United Kingdom only if the communication is capable of having an effect in the United Kingdom.
(4) Subsection (1) does not apply in relation to—
(a) an authorised unit trust scheme;
(aa) an authorised contractual scheme;
(b) a scheme constituted by an authorised open-ended investment company; or
(c) a recognised scheme.
(5) Subsection (1) does not apply to anything done in accordance with rules made by the FCA for the purpose of exempting from that subsection the promotion otherwise than to the general public of schemes of specified descriptions.
(6) The Treasury may by order specify circumstances in which subsection (1) does not apply.
(7) An order under subsection (6) may, in particular, provide that subsection (1) does not apply in relation to communications—
(a) of a specified description;
(b) originating in a specified country or territory outside the United Kingdom;
(c) originating in a country or territory which falls within a specified description of country or territory outside the United Kingdom; or
(d) originating outside the United Kingdom.
(8) The Treasury may by order repeal subsection (3).
(9) “Communicate” includes causing a communication to be made.
(10) “Promotion otherwise than to the general public” includes promotion in a way designed to reduce, so far as possible, the risk of participation by persons for whom participation would be unsuitable.
(11) “Participate”, in relation to a collective investment scheme, means become a participant (within the meaning given by section 235(2)) in the scheme.
(1) The Treasury may by regulations make provision for exempting single property schemes from section 238(1).
(2) For the purposes of subsection (1) a single property scheme is a scheme which has the characteristics mentioned in subsection (3) and satisfies such other requirements as are prescribed by the regulations conferring the exemption.
(3) The characteristics are—
(a) that the property subject to the scheme (apart from cash or other assets held for management purposes) consists of—
(i) a single building (or a single building with ancillary buildings) managed by or on behalf of the operator of the scheme, or
(ii) a group of adjacent or contiguous buildings managed by him or on his behalf as a single enterprise,
with or without ancillary land and with or without furniture, fittings or other contents of the building or buildings in question; and
(b) that the units of the participants in the scheme are either dealt in on a recognised investment exchange or offered on terms such that any agreement for their acquisition is conditional on their admission to dealings on such an exchange.
(4) If regulations are made under subsection (1), the FCA may make rules imposing duties or liabilities on the operator and (if any) the trustee or depositary of a scheme exempted by the regulations.
(5) The rules may include, to such extent as the FCA thinks appropriate, provision for purposes corresponding to those for which provision can be made under section 248 in relation to authorised unit trust schemes.
(1) An authorised person may not approve for the purposes of section 21 the content of a communication relating to a collective investment scheme if he would be prohibited by section 238(1) from effecting the communication himself or from causing it to be communicated.
(2) For the purposes of determining in any case whether there has been a contravention of section 21(1), an approval given in contravention of subsection (1) is to be regarded as not having been given.
If an authorised person contravenes a requirement imposed on him by section 238 or 240, section 138D applies to the contravention as it applies to a contravention mentioned in section 138D(2).
(1) No bearer units in a collective investment scheme may be issued, converted or cancelled after 1 January 2021.
(2) Subsection (1) applies in relation to a collective investment scheme even if the arrangements constituting the scheme purport to authorise the issue, conversion or cancellation of bearer units in the scheme.
(3) In this section “bearer units”, in relation to a collective investment scheme, means units in the scheme evidenced by a certificate, or any other documentary evidence of title, which indicates—
(a) that the holder of the document is entitled to the units specified in it; and
(b) that no entry identifying the holder of those units will be made in any register, or other record, of participants in the scheme.
(4) Subsection (1) does not apply to a collective investment scheme constituted by an open-ended investment company, but regulation 48 of the Open-Ended Investment Companies Regulations 2001 (S.I. 2001/1228) makes corresponding provision.
242 Applications for authorisation of unit trust schemes.
(1) The manager and trustee, or proposed manager and trustee, of a unit trust scheme may apply to the FCA for—
(a) an order declaring the scheme to be an authorised unit trust scheme;
(b) an order declaring the scheme to be an authorised money market fund.
(2) The manager and trustee (or proposed manager and trustee) must be different persons.
(3) An application —
(a) must be made in such manner as the FCA may direct; and
(b) must contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.
(4) At any time after receiving an application and before determining it, the FCA may require the applicants to provide it with such further information as it reasonably considers necessary to enable it to determine the application.
(5) Different directions may be given, and different requirements imposed, in relation to different applications.
(6) The FCA may require applicants to present information which they are required to give under this section in such form, or to verify it in such a way, as the FCA may direct.
243 Authorisation orders : authorised unit trust schemes.
(1) If, on an application under section 242(1)(a) in respect of a unit trust scheme, the FCA—
(a) is satisfied that the scheme complies with the requirements set out in this section,
(b) is satisfied that the scheme complies with the requirements of the trust scheme rules, and
(c) has been provided with a copy of the trust deed and a certificate signed by a solicitor to the effect that it complies with such of the requirements of this section or those rules as relate to its contents,
the FCA may make an order declaring the scheme to be an authorised unit trust scheme.
(2) If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The manager and the trustee must be persons who are independent of each other.
(5) The manager and the trustee must each be a body corporate incorporated in the United Kingdom ..., and the affairs of each must be administered in the United Kingdom.
(5A) The manager and the trustee must each have a place of business in the United Kingdom.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) The manager and the trustee must each be an authorised person and the manager must have permission to act as manager and the trustee must have permission to act as trustee.
(7A) The manager must be a fit and proper person to manage the unit trust scheme to which the application relates.
(8) The name of the scheme must not be undesirable or misleading.
(9) The purposes of the scheme must be reasonably capable of being successfully carried into effect.
(10) The participants must be entitled to have their units redeemed in accordance with the scheme at a price—
(a) related to the net value of the property to which the units relate; and
(b) determined in accordance with the scheme.
(11) But a scheme is to be treated as complying with subsection (10) if it requires the manager to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in that subsection.
(1) If, on an application under section 242(1)(b) in respect of a unit trust scheme, conditions A and B are met the FCA may make an order declaring the scheme to be an authorised money market fund.
(2) Condition A is that the FCA is satisfied that the scheme will be able to comply with the requirements imposed on a money market fund under the MMF Regulation.
(3) Condition B is that—
(a) the scheme is an authorised unit trust scheme, or
(b) the scheme—
(i) is the subject of an application under section 242(1)(a), and
(ii) the conditions in section 243(1)(a) to (c) are met in relation to that application.
(4) If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.
(5) In this Chapter “authorisation order” means—
(a) an order under section 243(1), or
(b) an order under subsection (1) of this section.
(1) Subject to subsection (1A), An application under section 242(1)(a) must be determined by the FCA before the end of the period of six months beginning with the date on which it receives the completed application.
(1A) An application under section 242(1)(a) in respect of a unit trust scheme which is a UCITS, or an application under section 242(1)(b), must be determined by the FCA before the end of two months beginning with the date on which it receives the application.
(2) The FCA may determine an incomplete application if it considers it appropriate to do so; and it must in any event determine such an application within twelve months beginning with the date on which it first receives the application.
(3) The applicant may withdraw his application, by giving the FCA written notice, at any time before the FCA determines it.
(1) If the FCA proposes to refuse an application made under section 242 it must give each of the applicants a warning notice.
(2) If the FCA decides to refuse the application—
(a) it must give each of the applicants a decision notice; and
(b) either applicant may refer the matter to the Tribunal.