CP12/32: Implementation of the Alternative ... - BVCA admin

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
Funds for non-professional investors
Non-UCITS retail schemes
Annex X
2.23 In DP12/1 we explained that the UK Authorities have discretion whether to allow specific
regimes for categories of fund that can be marketed to retail investors. 14 We confirm it is
the intention to treat authorised non-UCITS retail schemes (NURS) as AIFs that may be
marketed to ‘retail investors’ within the meaning of Article 43 of AIFMD. This will mean
that, as now, such funds may be marketed to the general public.
2.24 We asked respondents to DP12/1 what changes, if any, we should make to the current
NURS regime 15 . The majority wished to see the NURS regime maintained, except where the
requirements of AIFMD affect existing rules and changes are needed. We agree that AIFMD
implementation should not be used as an opportunity to make widespread changes to the
NURS regime. So, although some NURS rules may need modifying to meet AIFMD
requirements, where the FCA can exercise discretion we will generally not be seeking to
make changes. We will address this issue in more detail in CP2.
Qualified investor schemes
2.25 Qualified investor schemes (QIS) are authorised funds intended primarily for professional
investors, but they may be sold to certain limited categories of retail investors, as is the case
for unregulated collective investment schemes (CIS) more generally. All these funds will fall
within the scope of Article 43, so we intend to continue allowing them to be marketed to
limited categories of investors. This policy is of course subject to our proposals in CP12/19 16
to restrict further the categories of non-professional investors to whom ‘non-mainstream
pooled investments’ (including unregulated CIS and QIS) may be promoted. If those
proposals are carried through, they will not affect the general principle of treating these
categories of fund as ‘retail’ under Article 43 – where, for example, units are sold to retail
clients certified as ‘sophisticated investors’.
2.26 We asked respondents to DP12/1 what changes, if any, we should make to the current QIS
regime. 17 There was less consensus than for NURS: most respondents argued to keep the
QIS requirements, on the basis that they provide a useful bridge between mainstream retail
funds and unregulated CIS, as well as being tax-efficient for professional investors who do
not enjoy tax-exempt status. However, some stakeholders thought that many of our specific
rule requirements should be dropped, so that such funds only need to comply with the
minimum AIFMD requirements.
2.27 We accept the arguments for retaining QIS, and propose to take a similar approach to the
QIS regime as for NURS, making rule changes only where it is necessary to transpose the
14 DP12/1 Chapter 9 at paras 9.21-9.33.
15 Questions 58 and 59 of DP12/1.
16 CP12/19 Restrictions on the retail distribution of unregulated collective investment schemes and close substitutes, August 2012.
17 Question 66 of DP12/1.
18 Financial Services Authority November 2012