Financial Services and Markets Act 2000

• (b) a reference to authorised unit trust schemes is to be read as a reference to authorised contractual schemes;

• (c) a reference to the manager is to be read as a reference to the operator;

• (d) a reference to the trustee is to be read as a reference to the depositary; and

• (e) a reference to the trust deed is to be read as a reference to the contractual scheme deed.

• (3) The Treasury’s power by order under section 247(5) to modify the FCA’s power to make trust scheme rules shall also be exercisable in relation to the FCA’s power to make contractual scheme rules.

• (4) For the purposes of subsection (3), section 247(5) is to be read as if the reference to authorised unit trust schemes were a reference to authorised contractual schemes.

Contractual scheme particulars rules

261J

• (1) The FCA may by rules (“contractual scheme particulars rules”) make in relation to authorised contractual schemes provision corresponding to that which may be made under section 248 in relation to authorised unit trust schemes.

• (2) For the purposes of subsection (1), section 248 is to be read with the following modifications—

• (a) a reference to scheme particulars rules is to be read as a reference to contractual scheme particulars rules;

• (b) a reference to scheme particulars is to be read as a reference to contractual scheme particulars; and

• (c) a reference to the manager of an authorised unit trust scheme is to be read as a reference to the operator of an authorised contractual scheme.

Disciplinary measures

261K

• (1) If it appears to the FCA that an auditor has failed to comply with a duty imposed on the auditor by contractual scheme rules, it may do one or more of the following—

• (a) disqualify the auditor from being the auditor of any authorised unit trust scheme, authorised contractual scheme or authorised open-ended investment company;

• (b) publish a statement to the effect that it appears to the FCA that the auditor has failed to comply with the duty;

• (c) impose on the auditor a penalty, payable to the FCA, of such amount as the FCA considers appropriate.

• (2) Sections 345B to 345E have effect in relation to the taking of action under subsection (1) as they have effect in relation to the taking of action under section 345(2).

Modification or waiver of rules

261L

• (1) In this section “rules” means—

• (a) contractual scheme rules; or

• (b) contractual scheme particulars rules.

• (2) The FCA may, on the application or with the consent of any person to whom rules apply, direct that all or any of the rules—

• (a) are not to apply to that person as respects a particular scheme; or

• (b) are to apply to that person, as respects a particular scheme, with such modifications as may be specified in the direction.

• (3) The FCA may, on the application or with the consent of the operator and depositary of a particular scheme acting jointly, direct that all or any of the rules—

• (a) are not to apply to the scheme; or

• (b) are to apply to the scheme with such modifications as may be specified in the direction.

• (4) Section 138A and subsections (1) to (3), (5) and (6) of section 138B have effect in relation to a direction under subsection (2) as they have effect in relation to a direction under section 138A(1) but with the following modifications—

• (a) any reference to the person is to be read as a reference to the person mentioned in subsection (2); and

• (b) section 138B(3)(c) is to be read, in relation to a participant in the scheme, as if the word “commercial” were omitted.

• (5) Section 138A and subsections (1) to (3), (5) and (6) of section 138B have effect in relation to a direction under subsection (3) as they have effect in relation to a direction under section 138A(1) but with the following modifications—

• (a) subsection (4)(a) of section 138A is to be read as if the words “by the person” were omitted;

• (b) section 138B(3)(c) and the definition of “immediate group” in section 421ZA as it applies to that section are to be read as if references to the person were references to each of the operator and the depositary of the scheme;

• (c) section 138B(3)(c) is to be read, in relation to a participant in the scheme, as if the word “commercial” were omitted;

• (d) section 138B(5) is to be read as if the reference to the person concerned were a reference to the scheme concerned and to its operator and depositary; and

• (e) section 138A(7) is to be read as if the reference to the person were a reference to the operator and depositary of the scheme acting jointly.

Co-ownership schemes: rights and liabilities of participants

Contracts

261M

• (1) In this section “authorised contract” means a contract which the operator of a co-ownership scheme is authorised to enter into on behalf of the relevant participants for the purposes of, or in connection with, the acquisition, management or disposal of property subject to the scheme (but does not include a contract by which a person becomes a participant in the scheme).

• (2) The relevant participants are—

• (a) in the case of a contract relating to a stand-alone co-ownership scheme, the participants in the scheme;

• (b) in the case of a contract relating to an umbrella co-ownership scheme, the participants in the sub-scheme of the umbrella co-ownership scheme to which the contract relates.

• (3) The operator on behalf of the relevant participants may—

• (a) exercise rights under an authorised contract;

• (b) bring and defend proceedings for the resolution of any matter relating to an authorised contract; and

• (c) take action in relation to the enforcement of any judgment given in such proceedings.

• (4) The relevant participants may not themselves do any of the things mentioned in subsection (3), but this does not affect their rights as against the operator.

• (5) A person who enters into a contract which purports to be an authorised contract is deemed to have actual knowledge of the scope of the authority given to the operator by the contractual scheme deed.

• (6) The validity of an authorised contract is not to be called into question on the ground that a participant lacks capacity to authorise the operator to enter into such a contract.

• (7) An authorised contract must make provision for any property which is acquired under or by virtue of the contract to be held by, or to the order of, the depositary of the scheme concerned.

Effect of becoming or ceasing to be a participant

261N

• (1) A person who at any time becomes a participant in a relevant scheme acquires the rights and becomes subject to the liabilities to which the other participants in the relevant scheme are entitled or subject at that time under, or in connection with, authorised contracts.

• (2) A person who ceases to be a participant in a relevant scheme ceases to have any of the rights and to be subject to any of the liabilities to which a participant in the relevant scheme is entitled or subject under, or in connection with, authorised contracts.

• (3) In this section—

• (a) “authorised contract” has the meaning given in section 261M(1); and

• (b) each of the following is a “relevant scheme”—

• (i) a stand-alone co-ownership scheme; and

• (ii) a sub-scheme of an umbrella co-ownership scheme.

Limited liability

261O

• (1) The debts of a relevant scheme are to be paid by the operator out of the property subject to the relevant scheme.

• (2) The participants in a relevant scheme are not liable for the debts of the relevant scheme beyond the amount of the property subject to the relevant scheme which is available to the operator to meet the debts.

• (3) In this section—

• (a) a reference to the debts of a relevant scheme is a reference to debts and obligations incurred under, or in connection with, authorised contracts;

• (b) “authorised contract” has the meaning given in section 261M(1); and

• (c) “relevant scheme” has the meaning given in section 261N(3).

Segregated liability in relation to umbrella co-ownership schemes

261P

• (1) The property subject to a sub-scheme of an umbrella co-ownership scheme must not be used to discharge any liabilities of, or meet any claims against, any person other than the participants in that sub-scheme.

• (2) Any provision contained in any contract, agreement or other document is void in so far as it is inconsistent with subsection (1), and any transaction involving the application of property in contravention of that subsection is void.

• (3) The FCA may give a direction under section 261X(2) in relation to a sub-scheme of an umbrella co-ownership scheme as if the sub-scheme were an authorised contractual scheme, but this subsection does not enable the FCA to apply to the court for an order under section 261Y in relation to a sub-scheme of an umbrella co-ownership scheme.

• (4) Where such a direction is given, the reference in section 261Z1(6) to the scheme is to be read as a reference to the sub-scheme concerned.

Alterations

Alteration of contractual schemes and changes of operator or depositary

261Q

• (1) This section applies where the operator of an authorised contractual scheme proposes to make an alteration to the scheme, other than an alteration—

• (a) to which section 261S applies; or

• (b) to which Part 4 of the Undertakings for Collective Investment in Transferable Securities Regulations 2011 (mergers) applies.

• (2) The operator must give written notice of the proposal to the FCA.

• (3) Any notice given in respect of a proposal to alter the scheme involving a change in the contractual scheme deed must be accompanied by a certificate signed by a solicitor to the effect that the change will not affect the compliance of the deed with the contractual scheme rules.

• (4) The operator of an authorised contractual scheme must give written notice to the FCA of any proposal to replace the depositary of the scheme.

• (5) The depositary of an authorised contractual scheme must give written notice to the FCA of any proposal to replace the operator of the scheme.

• (6) Effect is not to be given to any proposal of which notice has been given under subsection (2), (4) or (5) unless—

• (a) the FCA, by written notice, has given its approval to the proposal; or

• (b) one month, beginning with the date on which the notice was given, has expired without the operator or the depositary having received from the FCA a warning notice under section 261R in respect of the proposal.

• (7) The FCA must not approve a proposal to replace the operator or the depositary of an authorised contractual scheme unless it is satisfied that, if the proposed replacement is made, the scheme will continue to comply with the requirements of section 261D(4) to (9).

Procedure when refusing approval of a proposal under section 261Q

261R

• (1) If the FCA proposes to refuse approval of a proposal under section 261Q to replace the depositary or operator of an authorised contractual scheme, it must give a warning notice to the person by whom notice of the proposal was given under section 261Q(4) or (5).

• (2) If the FCA proposes to refuse approval of a proposal under section 261Q to alter an authorised contractual scheme, it must give separate warning notices to the operator and the depositary of the scheme.

• (3) To be valid the warning notice must be received by the person to whom it is given before the end of one month beginning with the date on which notice of the proposal was given.

• (4) If, having given a warning notice to a person, the FCA decides to refuse approval—

• (a) it must give that person a decision notice; and

• (b) that person may refer the matter to the Tribunal.

Proposal to convert to a non-feeder UCITS

261S

• (1) This section applies where the operator of an authorised contractual scheme which is a feeder UCITS proposes to make an alteration to the scheme which—

• (a) involves a change in the contractual scheme deed, and

• (b) will enable the scheme to convert into a UK UCITS which is not a feeder UCITS.

• (2) The operator must give written notice of the proposal to the FCA.

• (3) Any notice given in respect of such a proposal must be accompanied by—

• (a) a certificate signed by a solicitor to the effect that the change will not affect the compliance of the deed with the contractual scheme rules; and

• (b) the specified information.

• (4) The FCA must, within 15 working days after the date on which it received the notice under subsection (2), give—

• (a) written notice to the operator of the scheme that the FCA approves the proposed amendments to the contractual scheme deed, or

• (b) separate warning notices to the operator and depositary of the scheme that the FCA proposes to refuse approval of the proposed amendments.

• (5) Effect is not to be given to any proposal of which notice has been given under subsection (2) unless the FCA, by written notice, has given its approval to the proposal.

• (6) If, having given a warning notice to a person, the FCA decides to refuse approval—

• (a) it must give that person a decision notice; and

• (b) that person may refer the matter to the Tribunal.

• (7) Subsection (8) applies where—

• (a) the notice given under subsection (2) relates to a proposal to amend the contractual scheme deed of a feeder UCITS to enable it to convert into a UK UCITS which is not a feeder UCITS following the winding-up of its master UCITS; and

• (b) the proceeds of the winding-up are to be paid to the feeder UCITS before the date on which the feeder UCITS proposes to start investing in accordance with the new investment objectives and policy provided for in its amended contractual scheme deed and contractual scheme rules.

• (8) Where this subsection applies, the FCA may only approve the proposal subject to the conditions set out in section 283A(5) and (6).

• (9) In this section “specified” means—

• (a) specified in rule 11.6.3(2) of the Collective Investment Schemes sourcebook, or

• (b) specified in UCITS-related direct EU legislation.

Exclusion clauses

Avoidance of exclusion clauses

261T

Any provision—

• (a) of the contractual scheme deed of an authorised contractual scheme, or

• (b) in the case of an authorised contractual scheme which is a partnership scheme, of the contract under which the depositary of the scheme is appointed,

is void in so far as it would have the effect of exempting the operator or the depositary from liability for any failure to exercise due care and diligence in the discharge of its functions in respect of the scheme.

Ending of authorisation

Revocation of authorisation order otherwise than by consent

261U

• (1) An authorisation order may be revoked by an order made by the FCA if it appears to the FCA that—

• (a) one or more of the requirements for the making of the order are no longer satisfied;

• (b) the operator or depositary of the scheme concerned has contravened a requirement imposed on the operator or depositary by or under this Act;

• (c) the operator or depositary of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

• (d) no regulated activity is being carried on in relation to the scheme and the period of that inactivity began at least twelve months earlier; or

• (e) none of paragraphs (a) to (d) applies, but it is desirable to revoke the authorisation order in order to protect the interests of participants or potential participants in the scheme.

• (2) For the purposes of subsection (1)(e), the FCA may take into account any matter relating to—

• (a) the scheme;

• (b) the operator or depositary;

• (c) any person employed by or associated with the operator or depositary in connection with the scheme;

• (d) any director of the operator or depositary;

• (e) any person exercising influence over the operator or depositary;

• (f) any body corporate in the same group as the operator or depositary;

• (g) any director of any such body corporate;

• (h) any person exercising influence over any such body corporate.

Procedure for revoking authorisation order

261V

• (1) If the FCA proposes to make an order under section 261U revoking an authorisation order (“a revoking order”), it must give separate warning notices to the operator and the depositary of the scheme.

• (2) If the FCA decides to make a revoking order, it must without delay give each of them a decision notice and either of them may refer the matter to the Tribunal.

Requests for revocation of authorisation order

261W

• (1) An authorisation order may be revoked by an order made by the FCA at the request of the operator or depositary of the scheme concerned.

• (2) If the FCA makes an order under subsection (1), it must give written notice of the order to the operator and depositary of the scheme concerned.

• (3) The FCA may refuse a request to make an order under this section if it considers that—

• (a) the public interest requires that any matter concerning the scheme should be investigated before a decision is taken as to whether the authorisation order should be revoked; or

• (b) revocation would not be in the interests of the participants ....

• (4) If the FCA proposes to refuse a request under this section, it must give separate warning notices to the operator and the depositary of the scheme.

• (5) If the FCA decides to refuse the request, it must without delay give each of them a decision notice and either of them may refer the matter to the Tribunal.

Powers of intervention

Directions

261X

• (1) The FCA may give a direction under this section if it appears to the FCA that—

• (a) one or more of the requirements for the making of an authorisation order are no longer satisfied;

• (b) the operator or depositary of an authorised contractual scheme has contravened, or is likely to contravene, a requirement imposed—

• (i) by or under this Act; ...

• (ii) by UCITS-related direct EU legislation; or

• (iii) by the MMF Regulation or any directly applicable regulation or decision made under that Regulation which constitutes assimilated direct legislation;

• (c) the operator or depositary of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular; or

• (d) none of paragraphs (a) to (c) applies, but it is desirable to give a direction in order to protect the interests of participants or potential participants in such a scheme.

• (2) A direction under this section may—

• (a) require the operator of the scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme;

• (b) require the operator and depositary of the scheme to wind it up.

• (3) If the authorisation order is revoked, the revocation does not affect any direction under this section which is then in force.

• (4) A direction may be given under this section in relation to a scheme in the case of which the authorisation order has been revoked.

• (5) If a person contravenes a direction under this section, section 138D applies to the contravention as it applies to a contravention mentioned in that section.

• (6) The FCA may revoke or vary a direction given under this section, either on its own initiative or on the application of a person to whom the direction was given, if it appears to the FCA—

• (a) in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force;

• (b) in the case of variation, that the direction should take effect or continue in force in a different form.

Applications to the court

261Y

• (1) If the FCA could give a direction under section 261X, it may also apply to the court for an order—

• (a) removing the operator or the depositary, or both the operator and the depositary, of the scheme; and

• (b) replacing the person or persons removed with a suitable person or persons nominated by the FCA.

• (2) The FCA may nominate a person for the purposes of subsection (1)(b) only if it is satisfied that, if the order was made, the requirements of section 261D(4) to (9) would be complied with.

• (3) If it appears to the FCA that there is no person it can nominate for the purposes of subsection (1)(b), it may apply to the court for an order—

• (a) removing the operator or the depositary, or both the operator and the depositary, of the scheme; and

• (b) appointing an authorised person to wind up the scheme.

• (4) On an application under this section the court may make such order as it thinks fit.

• (5) The court may, on the application of the FCA, rescind any such order as is mentioned in subsection (3) and substitute such an order as is mentioned in subsection (1).

• (6) The FCA must give written notice of the making of an application under this section to the operator and depositary of the scheme concerned.

• (7) The jurisdiction conferred by this section may be exercised by—

• (a) the High Court;

• (b) in Scotland, the Court of Session.

Winding up or merger of master UCITS

261Z

• (1) Subsection (2) applies if a master UCITS which has one or more feeder UCITS which are authorised contractual schemes is wound up, whether as a result of a direction given by the FCA under section 257 or 261X, an order of the court under section 258 or 261Y, rules made by the FCA or otherwise.

• (2) The FCA must direct the operator and depositary of any authorised contractual scheme which is a feeder UCITS of the master UCITS to wind up the feeder UCITS unless—

• (a) the FCA approves under section 283A the investment by the feeder UCITS of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in units of another UCITS or master UCITS; or

• (b) the FCA approves under section 261S an amendment of the contractual scheme deed of the feeder UCITS which would enable it to convert into a UK UCITS which is not a feeder UCITS.

• (3) Subsection (4) applies if a master UCITS which has one or more feeder UCITS which are authorised contractual schemes—

• (a) merges with another UCITS, or

• (b) is divided into two or more UCITS.

• (4) The FCA must direct the operator and depositary of any authorised contractual scheme which is a feeder UCITS of the master UCITS to wind up the scheme unless—

• (a) the FCA approves under section 283A the investment by the scheme of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in the units of—

• (i) the master UCITS which results from the merger;

• (ii) one of the UCITS resulting from the division; or

• (iii) another UCITS or master UCITS;

• (b) the FCA approves under section 261S an amendment of the contractual scheme deed of the scheme concerned which would enable it to convert into a UK UCITS which is not a feeder UCITS.

Procedure on giving directions under section 261X or 261Z and varying them on FCA’s own initiative

261Z1

• (1) A direction under section 261X or 261Z takes effect—

• (a) immediately, if the notice given under subsection (3) states that that is the case;

• (b) on such date as may be specified in the notice; or

• (c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

• (2) A direction under section 261X may be expressed to take effect immediately (or on a specified date) only if the FCA, having regard to the ground on which it is exercising its power under that section, considers that it is necessary for the direction to take effect immediately (or on that date).

• (3) If the FCA proposes to give a direction under section 261X or 261Z, or gives a direction under either section with immediate effect, it must give separate written notice to the operator and the depositary of the scheme concerned.

• (4) The notice must—

• (a) give details of the direction;

• (b) inform the person to whom it is given of when the direction takes effect;

• (c) state the FCA’s reasons for giving the direction and for its determination as to when the direction takes effect;

• (d) inform the person to whom it is given that representations may be made to the FCA within such period as may be specified in it (whether or not the matter has been referred to the Tribunal); and

• (e) inform the person to whom it is given of the right to refer the matter to the Tribunal.

• (5) If the direction imposes a requirement under section 261X(2)(a), the notice must state that the requirement has effect until—

• (a) a specified date; or

• (b) a further direction.

• (6) If the direction is given under section 261X(2)(b) or section 261Z(2) or (4), the scheme must be wound up—

• (a) by a date specified in the notice; or

• (b) if no date is specified, as soon as practicable.

• (7) The FCA may extend the period allowed under the notice for making representations.

• (8) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

• (a) to give the direction in the way proposed, or

• (b) if it has been given, not to revoke the direction,

it must give separate written notice to the operator and the depositary of the scheme concerned.

• (9) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

• (a) not to give the direction in the way proposed,

• (b) to give the direction in a way other than that proposed, or

• (c) to revoke a direction which has effect,

it must give separate written notice to the operator and the depositary of the scheme concerned.

• (10) A notice given under subsection (8) must inform the persons to whom it is given of the right to refer the matter to the Tribunal.

• (11) A notice under subsection (9)(b) must comply with subsection (4).

• (12) If a notice informs a person of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

• (13) This section applies to the variation of a direction on the FCA’s own initiative as it applies to the giving of a direction.

• (14) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Procedure: refusal to revoke or vary direction

261Z2

• (1) If on an application under section 261X(6) for a direction to be revoked or varied the FCA proposes—

• (a) to vary the direction otherwise than in accordance with the application, or

• (b) to refuse to revoke or vary the direction,

it must give the applicant a warning notice.

• (2) If the FCA decides to refuse to revoke or vary the direction—

• (a) it must give the applicant a decision notice; and

• (b) the applicant may refer the matter to the Tribunal.

Procedure: revocation of direction and grant of request for variation

261Z3

• (1) If the FCA decides on its own initiative to revoke a direction under section 261X it must give separate written notice of its decision to the operator and the depositary of the scheme.

• (2) If on an application under section 261X(6) for a direction to be revoked or varied the FCA decides to revoke the direction or vary it in accordance with the application, it must give the applicant written notice of its decision.

• (3) A notice under this section must specify the date on which the decision takes effect.

• (4) The FCA may publish such information about the revocation or variation, in such way, as it considers appropriate.

Information for home state regulator

261Z4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information for feeder UCITS

261Z5

• (1) The FCA must immediately inform the operator of any authorised contractual scheme which is a feeder UCITS of an authorised unit trust scheme, an authorised contractual scheme or an authorised open-ended investment company (the master UCITS) of—

• (a) any failure of which the FCA becomes aware by the master UCITS to comply with a provision made by or under any enactment in implementation of Chapter VIII of the UCITS directive;

• (b) any warning notice or decision notice given to the master UCITS in relation to a contravention of any provision made in implementation of Chapter VIII of the UCITS directive by or under any enactment or in rules of the FCA;

• (c) any information reported to the FCA pursuant to rules of the FCA made to implement Article 106(1) of the UCITS directive which relates to the master UCITS, or to one or more of its directors, or its management company, trustee, depositary or auditor.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 3B — Unauthorised co-ownership AIFs

Power to make provision about unauthorised co-ownership AIFs

261Z6

• (1) The Treasury may by regulations make provision about unauthorised co-ownership AIFs that corresponds or is similar to, or applies with modifications, any of sections 261M to 261O and section 261P(1) and (2) (rights and liabilities of participants in authorised co-ownership schemes).

• (2) Regulations under subsection (1) may make provision about unauthorised co-ownership AIFs generally, or about unauthorised co-ownership AIFs of a description specified in the regulations.

• (3) In this section “unauthorised co-ownership AIF” means a co-ownership scheme that—

• (a) is an AIF, and

• (b) is not authorised for the purposes of this Act by an authorisation order in force under section 261D(1).

Chapter IV — Open-ended Investment Companies

Open-ended investment companies.

262

• (1) The Treasury may by regulations make provision for—

• (a) facilitating the carrying on of collective investment by means of open-ended investment companies;

• (b) regulating such companies.

• (2) The regulations may, in particular, make provision—

• (a) for the incorporation and registration in the United Kingdom of bodies corporate;

• (b) for a body incorporated by virtue of the regulations to take such form as may be determined in accordance with the regulations;

• (c) as to the purposes for which such a body may exist, the investments which it may issue and otherwise as to its constitution;

• (d) as to the management and operation of such a body and the management of its property;

• (e) as to the powers, duties, rights and liabilities of such a body and of other persons, including—

• (i) the directors or sole director of such a body;

• (ii) its depositary (if any);

• (iii) its shareholders, and persons who hold the beneficial title to shares in it without holding the legal title;

• (iv) its auditor; and

• (v) any persons who act or purport to act on its behalf;

• (f) as to the merger of one or more such bodies and the division of such a body;

• (g) for the appointment and removal of an auditor for such a body;

• (h) as to the winding up and dissolution of such a body;

• (i) for such a body, or any director or depositary of such a body, to be required to comply with directions given by the FCA;

• (j) enabling the FCA to apply to a court for an order removing and replacing any director or depositary of such a body;

• (k) for the carrying out of investigations by persons appointed by the FCA or the Secretary of State;

• (l) corresponding to any provision made in relation to unit trust schemes by Chapter III of this Part.

• (3) Regulations under this section may—

• (a) impose criminal liability;

• (b) confer functions on the FCA;

• (c) in the case of provision made by virtue of subsection (2)(l), authorise the making of rules by the FCA;

• (d) confer jurisdiction on any court or on the Tribunal;

• (e) provide for fees to be charged by the FCA in connection with the carrying out of any of its functions under the regulations (including fees payable on a periodical basis);

• (f) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act);

• (g) make consequential amendments, repeals and revocations of any such legislation;

• (h) modify or exclude any rule of law.

• (4) The provision that may be made by virtue of subsection (3)(f) includes provision extending or adapting any power to make subordinate legislation.

• (5) Regulations under this section may, in particular—

• (a) revoke the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996; and

• (b) provide for things done under or in accordance with those regulations to be treated as if they had been done under or in accordance with regulations under this section.

Amendment of section 716 Companies Act 1985.

263

In section 716(1) of the Companies Act 1985 (prohibition on formation of companies with more than 20 members unless registered under the Act etc.), after “this Act,” insert “ is incorporated by virtue of regulations made under section 262 of the Financial Services and Markets Act 2000 ”.

Chapter V — Recognised Overseas Schemes

Schemes constituted in other EEA States

Schemes constituted in other EEA States.

264

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Representations and references to the Tribunal.

265

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disapplication of rules.

266

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power of FCA to suspend promotion of scheme.

267

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure on giving directions under section 267 and varying them on FCA's own initiative.

268

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure on application for variation or revocation of direction.

269

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

...

Schemes authorised in designated countries or territories.

270

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure.

271

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schemes authorised in approved countries

Schemes authorised in approved countries

271A

• (1) A collective investment scheme which is authorised under the law of a country or territory outside the United Kingdom is a recognised scheme if—

• (a) regulations made by the Treasury approving the country or territory for the purposes of this section are in force,

• (b) the scheme is of a description specified in the regulations in relation to which the country or territory is approved,

• (c) the operator of the scheme has applied to the FCA for recognition of the scheme,

• (d) the FCA has made (and has not revoked) an order granting the application, and

• (e) no direction under section 271L (suspension of recognition) has effect in relation to the scheme.

• (2) In making regulations under this section, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in sections 271B and 271C).

Approval of country: equivalent protection afforded to participants

271B

• (1) The Treasury may not make regulations under section 271A approving a country or territory and specifying a description of collective investment scheme unless satisfied that the equivalent protection test is met.

• (2) The equivalent protection test is met if the protection afforded to participants or potential participants in the schemes by the law and practice of the country or territory is at least equivalent to that afforded to participants or potential participants in comparable authorised schemes by the law and practice of the United Kingdom under which such schemes are authorised and supervised.

• (3) In this section—

• “comparable authorised schemes” means whichever of the following the Treasury consider to be the most appropriate—authorised unit trust schemes;authorised contractual schemes which are co-ownership schemes;authorised contractual schemes which are partnership schemes;authorised open-ended investment companies;any two or more of the kinds of collective investment scheme mentioned in paragraphs (a) to (d);

• “participants” means participants in the United Kingdom.

Approval of country: regulatory co-operation

271C

• (1) The Treasury may not make regulations under section 271A approving a country or territory and specifying a description of collective investment scheme unless satisfied that adequate arrangements exist, or will exist, for co-operation between the FCA and the overseas regulator.

• (2) In this section, “the overseas regulator” means the authority responsible for the authorisation and supervision of schemes of that description in the country or territory.

Report by the FCA in relation to approval

271D

• (1) When considering whether to make, vary or revoke regulations under section 271A approving a country or territory and specifying a description of collective investment scheme, the Treasury may ask the FCA to prepare a report on—

• (a) the law and practice of the country or territory under which such schemes are authorised and supervised, or particular aspects of such law and practice, and

• (b) any existing or proposed arrangements for co-operation between the FCA and the overseas regulator.

• (2) A request for a report under subsection (1) must be made in writing.

• (3) If the Treasury ask for a report under subsection (1), the FCA must provide the Treasury with the report.

• (4) In this section, “the overseas regulator” has the same meaning as in section 271C.

Power to impose requirements on schemes

271E

• (1) The Treasury may by regulations—

• (a) provide that a section 271A scheme of a description specified in the regulations must comply with requirements specified in the regulations, and

• (b) impose requirements on the operator of such a scheme.

• (2) In making regulations under this section in relation to a description of section 271A scheme, the Treasury must have regard to any requirements imposed in relation to comparable authorised schemes by or under this Act.

• (3) Regulations under this section may describe requirements by reference to—

• (a) rules made or to be made by the FCA, or

• (b) other enactments.

• (4) The power under subsection (3) includes power to make provision by reference to rules or other enactments as amended from time to time.

• (5) The FCA may make, amend or revoke a rule if it considers it necessary or appropriate to do so for the purposes of a requirement imposed (or varied or withdrawn) by regulations under this section which is described by reference to a rule made or to be made by the FCA.

• (6) If, for the purposes of a requirement imposed (or varied or withdrawn) by regulations under this section which is described by reference to a rule made or to be made by the FCA, the Treasury consider that it is necessary or appropriate for the FCA to make, amend or revoke a rule, they may direct the FCA to do so.

• (7) If the Treasury give a direction under subsection (6), the FCA must comply with the direction within such time as the Treasury may specify in the direction.

• (8) The references in paragraphs (5) and (6) to the amendment or revocation of rules are to the amendment or revocation of rules made by the FCA.

• (9) Section 141A (power to make consequential amendments of references to rules) applies in relation to the FCA's power to make, amend or revoke rules under this section as it applies in relation to its power to make, amend or revoke rules under Part 9A.

• (10) In this section—

• “comparable authorised schemes” has the same meaning as in section 271B;

• “enactment” includes— assimilated direct legislation,an enactment comprised in subordinate legislation,an enactment comprised in, or in an instrument made under, a Measure or Act of Senedd Cymru,an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament, andan enactment comprised in, or in an instrument made under, Northern Ireland legislation;

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

Application for recognition to the FCA

271F

• (1) An application for recognition of a collective investment scheme under section 271A—

• (a) must be made in such manner as the FCA may direct,

• (b) must contain the address of a place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act, and

• (c) must contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

• (2) Where requirements imposed by regulations under section 271E would apply to the scheme or its operator if the application were granted, the application must contain an explanation of how each requirement would be satisfied.

• (3) At any time after the application is received and before it is determined, the FCA may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.

• (4) The FCA may require the applicant to present information provided under this section in such form, or to verify the information in such a way, as the FCA may direct.

• (5) Different directions may be given, and different requirements imposed, in relation to different applications.

Determination of applications

271G

• (1) The FCA—

• (a) may only make an order under section 271A granting an application under that section if it is satisfied that the conditions in subsection (2) are met, and

• (b) if it is so satisfied, must make such an order unless it is permitted to refuse the application under subsection (3) or required to do so under subsection (4).

• (2) Those conditions are—

• (a) that the scheme is authorised in a country or territory which is approved by the Treasury in regulations under section 271A,

• (b) that the scheme is of a description of scheme specified in the regulations,

• (c) that adequate arrangements exist for co-operation between the FCA and the overseas regulator, and

• (d) that, where requirements imposed by regulations under section 271E would apply to the scheme or its operator if the application were granted, each such requirement would be satisfied.

• (3) The FCA may refuse an application under section 271A if it appears to the FCA that the operator of the scheme—

• (a) has contravened a requirement imposed on them by or under this Act, or would contravene such a requirement if the application were granted, or

• (b) has, in purported compliance with such a requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular.

• (4) The FCA must refuse an application under section 271A if it considers it desirable to do so in order to protect the interests of participants or potential participants in the scheme in the United Kingdom.

• (5) Where the FCA receives an application under section 271A which is complete, it must give the applicant a notice under section 271H(1) or (2) before the end of the period of two months beginning with the day on which the FCA receives the application.

• (6) An application under section 271A is complete if the FCA considers that the application satisfies section 271F(1) and (2).

• (7) Where the FCA receives an application under section 271A which is not complete, it must—

• (a) notify the operator of the scheme that it does not consider that the application satisfies section 271F(1) or (2) (as applicable), and

• (b) identify the information needed to complete the application.

• (8) In this section, “the overseas regulator” has the same meaning as in section 271C.

Procedure when determining an application

271H

• (1) If the FCA decides to make an order under section 271A granting an application under that section, it must give written notice of its decision to the applicant.

• (2) If the FCA proposes to refuse an application under section 271A, it must give the applicant a warning notice.

• (3) If the FCA decides to refuse the application, it must give the applicant a decision notice.

• (4) If the FCA gives the applicant a decision notice under subsection (3), the applicant may refer the matter to the Tribunal, except where the FCA refuses the application on the ground that it is not satisfied that a condition in section 271G(2)(a) or (c) is met.

Obligations on operator of a section 271A scheme

271I

• (1) The operator of a section 271A scheme must notify the FCA if the operator becomes aware that it has contravened, or expects to contravene, a requirement imposed on it by or under this Act.

• (2) The operator of a section 271A scheme must notify the FCA of any change to—

• (a) the name or address of the operator of the scheme,

• (b) the name or address of any trustee or depositary of the scheme,

• (c) the name or address of any representative of the operator in the United Kingdom, and

• (d) the address of the place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act.

• (3) A notification under subsection (1) or (2) must be made in writing as soon as reasonably practicable.

Provision of information to the FCA

271J

• (1) The operator of a section 271A scheme must provide to the FCA such information as the FCA may direct, at such times as the FCA may direct, for the purpose of determining whether—

• (a) the conditions set out in section 271G(2)(a) to (c) are met, and

• (b) any requirements relating to the scheme or its operator imposed by or under this Act are satisfied.

• (2) The FCA may require the operator to present information provided under this section in such form, or to verify the information in such a way, as the FCA may direct.

• (3) Different directions may be given in relation to different schemes or different descriptions of scheme.

Rules as to scheme particulars

271K

• (1) The FCA may make rules in relation to section 271A schemes for purposes corresponding to those for which rules may be made under section 248 in relation to authorised unit trust schemes.

• (2) For the purposes of subsection (1), a reference in section 248 to the manager of an authorised unit trust scheme is to be read as a reference to the operator of a section 271A scheme.

• (3) Rules made under this section do not affect any liability which a person may incur apart from the rules.

Suspension of recognition

271L

• (1) The FCA may direct that a section 271A scheme is not to be a recognised scheme—

• (a) for a specified period,

• (b) until the occurrence of a specified event, or

• (c) until specified conditions are complied with.

• (2) The FCA may give a direction under subsection (1) only if—

• (a) the FCA is no longer satisfied that the conditions set out in section 271G(2)(a) to (c) are met,

• (b) it appears to the FCA that a requirement relating to the scheme or its operator imposed by or under this Act has not been satisfied, or is likely not to be satisfied,

• (c) it appears to the FCA that the operator of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular, or

• (d) although none of paragraphs (a) to (c) applies, the FCA considers it desirable to do so in order to protect the interests of participants or potential participants in the United Kingdom.

Procedure when suspending recognition

271M

• (1) A direction under section 271L takes effect—

• (a) immediately, if the notice given under subsection (3) states that to be the case,

• (b) on a day specified in the notice, or

• (c) if no day is specified in the notice, when the matter to which it relates is no longer open to review.

• (2) A direction under section 271L may be expressed to take effect immediately or on a specified day only if the FCA, having regard to its reason for giving the direction, reasonably considers that it is necessary for the direction to take effect immediately or on that day (as appropriate).

• (3) If the FCA proposes to give a direction under section 271L, or gives such a direction with immediate effect, it must give written notice to—

• (a) the operator of the scheme, and

• (b) the trustee or depositary of the scheme (if any).

• (4) The notice must—

• (a) set out details of the direction,

• (b) set out when the direction takes effect,

• (c) state the FCA's reasons for giving the direction and for its determination as to when the direction takes effect,

• (d) state that the recipient of the notice may make representations to the FCA within such period as may be specified in the notice (whether or not the matter has been referred to the Tribunal), and

• (e) set out the recipient's right to refer the matter to the Tribunal.

• (5) The FCA may extend the period allowed under the notice for making representations.

• (6) The FCA must give written notice to the operator and (if any) the trustee or depositary of the scheme concerned if, having considered any representations made, the FCA decides—

• (a) to give the direction in the way proposed, or

• (b) if it has been given, not to revoke the direction.

• (7) The FCA must give written notice to the operator and (if any) the trustee or depositary of the scheme concerned if, having considered any representations made, the FCA decides—

• (a) not to give the direction in the way proposed,

• (b) to give the direction in a way other than that proposed, or

• (c) where the direction has been given, to revoke it.

• (8) A notice under subsection (6) must set out the recipient's right to refer the matter to the Tribunal.

• (9) A notice under subsection (7)(b) must comply with subsection (4).

• (10) Where a notice sets out the right of the recipient to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

• (11) This section applies to the variation of a direction as it applies to the giving of a direction.

• (12) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Revocation of recognition on the FCA's initiative

271N

• (1) The FCA may revoke an order made under section 271A in relation to a collective investment scheme if—

• (a) the FCA is no longer satisfied that the conditions set out in section 271G(2)(a) to (c) are met,

• (b) it appears to the FCA that a requirement relating to the scheme or its operator imposed by or under this Act has not been satisfied,

• (c) it appears to the FCA that the operator of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular, or

• (d) although none of paragraphs (a) to (c) applies, the FCA considers it desirable to revoke the order to protect the interests of participants or potential participants in the United Kingdom.

• (2) If the FCA proposes to revoke an order made under section 271A, it must give a warning notice to—

• (a) the operator of the scheme, and

• (b) the trustee or depositary of the scheme (if any).

• (3) If the FCA decides to revoke the order—

• (a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme, and

• (b) the operator, trustee or depository may refer the matter to the Tribunal.

Requests for revocation of recognition

271O

• (1) The FCA may revoke an order made under section 271A in relation to a collective investment scheme at the request of the scheme's operator.

• (2) If the FCA decides to do so, it must give written notice to the operator and (if any) the trustee or depositary of the scheme.

• (3) The FCA may refuse a request under this section if it considers that—

• (a) the public interest requires that any matter concerning the scheme should be investigated before a decision is taken as to whether the order should be revoked, or

• (b) revocation would not be in the interests of participants in the scheme.

• (4) If the FCA proposes to refuse a request under this section, it must give a warning notice to the operator and (if any) the trustee or depositary of the scheme.

• (5) If the FCA decides to refuse the request—

• (a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme, and

• (b) the operator, trustee or depositary may refer the matter to the Tribunal.

Obligations on operator where recognition is revoked or suspended

271P

• (1) This section applies where—

• (a) the FCA gives a decision notice under section 271N(3), or a written notice under section 271O(2), in relation to a section 271A scheme, or

• (b) a direction given by the FCA under section 271L(1) in relation to a section 271A scheme takes effect.

• (2) The operator of the scheme must notify such persons as the FCA may direct that the FCA has revoked an order under section 271A for recognition of the scheme or given a direction under section 271L in relation to the scheme (as applicable).

• (3) A notification under subsection (2) that relates to a direction under section 271L must set out the terms of the direction.

• (4) A notification under subsection (2) must—

• (a) contain such information as the FCA may direct, and

• (b) be made in such form and manner as the FCA may direct.

• (5) Different directions may be given under subsection (2) or (4) in relation to—

• (a) different schemes or different descriptions of scheme;

• (b) different persons or descriptions of persons to whom a notification under subsection (2) must be given.

Effect of variation or revocation of Treasury regulations

271Q

• (1) This section applies, in relation to a section 271A scheme, where the Treasury vary or revoke regulations under section 271A and, as a result, the scheme ceases to be a recognised scheme because—

• (a) the country or territory in which the scheme is authorised is no longer approved for the purposes of that section, or

• (b) the scheme is no longer of a description of scheme specified in regulations under that section.

• (2) Where this section applies, the order given by the FCA under section 271A in relation to the scheme is revoked.

• (3) The Treasury may by regulations make provision, in relation to a scheme which has ceased to be recognised under section 271A by virtue of this section—

• (a) requiring an application under section 272 by such a scheme to be made during a period specified in the regulations or in a direction given by the FCA, and

• (b) modifying or disapplying section 275(1) and (2) (time limits for determining applications under section 272) for the purposes of an application under section 272 relating to such a scheme.

Public censure

271R

• (1) This section applies where the FCA considers that—

• (a) a requirement imposed by regulations under section 271E has been contravened,

• (b) rules made under section 271K have been contravened,

• (c) the operator of a section 271A scheme has contravened section 271I, 271J or 271P, or

• (d) the operator of a section 271A scheme has contravened a rule made, or a requirement imposed, under section 283.

• (2) The FCA may publish a statement to that effect.

• (3) Where the FCA proposes to publish a statement under subsection (2) relating to a scheme or the operator of a scheme, it must give the operator a warning notice setting out the terms of the statement.

• (4) If the FCA decides to publish the statement—

• (a) it must give the operator, without delay, a decision notice setting out the terms of the statement, and

• (b) the operator may refer the matter to the Tribunal.

• (5) After a statement under subsection (2) is published, the FCA must send a copy of it to the operator and to any person to whom a copy of the decision notice was given under section 393(4).

Recognition of parts of schemes under section 271A

271S

• (1) Section 271A(1) applies in relation to a part of a collective investment scheme as it applies in relation to such a scheme.

• (2) Accordingly, the following include a part of a scheme recognised under section 271A—

• (a) the reference to a scheme recognised under section 271A in the definition of “section 271A scheme” in section 237(3), and

• (b) other references to such a scheme (however expressed) in or in provision made under this Part of this Act (unless the contrary intention appears).

• (3) Provisions of or made under this Part of this Act have effect in relation to parts of schemes recognised, or seeking recognition, under section 271A with appropriate modifications.

• (4) The Treasury may by regulations—

• (a) make provision about what are, or are not, appropriate modifications for the purposes of subsection (3);

• (b) make provision so that a relevant enactment has effect in relation to parts of schemes recognised, or seeking recognition, under section 271A with such modifications as the Treasury consider appropriate;

• (c) make provision so that a relevant enactment does not have effect in relation to such parts of schemes.

• (5) Regulations under subsection (4)(b) or (c) may amend, repeal or revoke an enactment.

• (6) In this section—

• “enactment” has the same meaning as in section 271E;

• “relevant enactment” means an enactment passed or made before the day on which subsection (1) comes into force that makes provision in relation to collective investment schemes recognised, or seeking recognition, under section 271A.

Individually recognised overseas schemes

Individually recognised overseas schemes.

272

• (1) The FCA may, on the application of the operator of a collective investment scheme which—

• (a) is managed in a country or territory outside the United Kingdom, ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ca) does not have the benefit of section 271A, and

• (d) appears to the FCA to satisfy the requirements set out in subsections (2) to (15),

make an order declaring the scheme to be a recognised scheme.

• (1A) For the purposes of subsection (1)(ca), a collective investment scheme has the benefit of section 271A if—

• (a) it is authorised under the law of a country or territory which is for the time being approved by regulations under section 271A, and

• (b) it falls within a description of schemes specified in the regulations.

• (2) Adequate protection must be afforded to participants in the scheme.

• (3) The arrangements for the scheme’s constitution and management must be adequate.

• (4) The powers and duties of the operator and, if the scheme has a trustee or depositary, of the trustee or depositary must be adequate.

• (5) In deciding whether the matters mentioned in subsection (3) or (4) are adequate, the FCA must have regard to—

• (a) any rule of law, and

• (b) any matters which are... the subject of rules,

applicable in relation to comparable authorised schemes.

• (6) “Comparable authorised schemes” means whichever of the following the FCA considers the most appropriate, having regard to the nature of scheme in respect of which the application is made—

• (a) authorised unit trust schemes;

• (aa) authorised contractual schemes which are co-ownership schemes;

• (ab) authorised contractual schemes which are partnership schemes;

• (b) authorised open-ended investment companies;

• (c) any two or more of the kinds of collective investment scheme mentioned in paragraphs (a) to (b).

• (7) The scheme must take the form of an open-ended investment company or (if it does not take that form) the operator must be a body corporate.

• (8) The operator of the scheme must—

• (a) if an authorised person, have permission to act as operator;

• (b) if not an authorised person, be a fit and proper person to act as operator.

• (9) The trustee or depositary (if any) of the scheme must—

• (a) if an authorised person, have permission to act as trustee or depositary;

• (b) if not an authorised person, be a fit and proper person to act as trustee or depositary.

• (10) The operator and the trustee or depositary (if any) of the scheme must be able and willing to co-operate with the FCA by the sharing of information and in other ways.

• (11) The name of the scheme must not be undesirable or misleading.

• (12) The purposes of the scheme must be reasonably capable of being successfully carried into effect.

• (13) The participants must be entitled to have their units redeemed in accordance with the scheme at a price related to the net value of the property to which the units relate and determined in accordance with the scheme.

• (14) But a scheme is to be treated as complying with subsection (13) if it requires the operator 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.

• (15) Subsection (13) is not to be read as imposing a requirement that the participants must be entitled to have their units redeemed (or sold as mentioned in subsection (14)) immediately following a demand to that effect.

Matters that may be taken into account.

273

For the purposes of subsections (8)(b) and (9)(b) of section 272, the FCA may take into account any matter relating to—

• (a) any person who is or will be employed by or associated with the operator, trustee or depositary in connection with the scheme;

• (b) any director of the operator, trustee or depositary;

• (c) any person exercising influence over the operator, trustee or depositary;

• (d) any body corporate in the same group as the operator, trustee or depositary;

• (e) any director of any such body corporate;

• (f) any person exercising influence over any such body corporate.

Applications for recognition of individual schemes.

274

• (1) An application under section 272 for an order declaring a scheme to be a recognised scheme must be made to the FCA by the operator of the scheme.

• (2) The application—

• (a) must be made in such manner as the FCA may direct;

• (b) must contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act;

• (c) must contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

• (3) At any time after receiving an application and before determining it, the FCA may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.

• (4) Different directions may be given, and different requirements imposed, in relation to different applications.

• (5) The FCA may require an applicant to present information which he is required to give under this section in such form, or to verify it in such a way, as the FCA may direct.

Determination of applications.

275

• (1) An application under section 272 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.

• (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) If the FCA makes an order under section 272(1), it must give written notice of the order to the applicant.

Procedure when refusing an application.

276

• (1) If the FCA proposes to refuse an application made under section 272 it must give the applicant a warning notice.

• (2) If the FCA decides to refuse the application—

• (a) it must give the applicant a decision notice; and

• (b) the applicant may refer the matter to the Tribunal.

Alteration of schemes and changes of operator, trustee or depositary.

277

• (1) The operator of a scheme recognised by virtue of section 272 must give written notice to the FCA of any proposed alteration to the scheme which, if made, would be a material alteration.

• (2) Effect is not to be given to any such proposal unless—

• (a) the FCA, by written notice, has given its approval to the proposal; or

• (b) one month, beginning with the date on which notice was given under subsection (1), has expired without the FCA having given written notice to the operator that it has decided to refuse approval.

• (3) ... Before any replacement of the operator, trustee or depositary of such a scheme, notice of the proposed replacement must be given to the FCA—

• (a) by the operator, trustee or depositary (as the case may be); or

• (b) by the person who is to replace him.

• (3A) A notice under subsection (3) must be given—

• (a) at least one month before the proposed replacement, or

• (b) if that is not reasonably practicable, as soon as is reasonably practicable in the period of one month before the proposed replacement.

• (3B) The operator of such a scheme must give written notice to the FCA, as soon as reasonably practicable, of any change to—

• (a) the name or address of the operator of the scheme,

• (b) the name or address of any trustee or depositary of the scheme,

• (c) the name or address of any representative of the operator in the United Kingdom, and

• (d) the address of the place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act.

• (4) If a change is made, or is to be made, to the law which applies to such a scheme in the country or territory in which it is managed and the change affects or will affect any of the matters mentioned at section 272(2) to (4), the operator of the scheme must give written notice of the change to the FCA—

• (a) at least one month before the change takes effect; or

• (b) if that is not reasonably practicable, as soon as it is reasonably practicable to do so.

• (5) A notice under this section—

• (a) must be given in such manner as the FCA may direct; and

• (b) where the notice is given under subsection (1) or (3), must include such information as the FCA may direct for the purpose of determining whether the requirements for the making of an order under section 272 in respect of the scheme would continue to be satisfied following the alteration or replacement that is the subject of the notice.

• (6) The FCA may make rules specifying when a proposed alteration is a material alteration for the purposes of subsection (1).

Regular provision of information relating to compliance with requirements for recognition

277A

• (1) The operator of a scheme recognised by virtue of section 272 must provide to the FCA such information as the FCA may direct, at such times as the FCA may direct, for the purpose of determining whether the requirements for the making of an order under section 272 in respect of the scheme continue to be satisfied.

• (2) A direction under subsection (1) may not require information to be provided within the period of 12 months beginning with the date on which information was last required to be provided to the FCA in respect of the scheme pursuant to a requirement under section 274(2)(c) or a direction under subsection (1) or section 277(5)(b).

• (3) The information must be provided in such manner as the FCA may direct.

...

Rules as to scheme particulars.

278

The FCA may make rules imposing duties or liabilities on the operator of a scheme recognised under section ... 272 for purposes corresponding to those for which rules may be made under section 248 in relation to authorised unit trust schemes.

Revocation of recognition.

279

The FCA may ... revoke an order under section 272 if it appears to the FCA—

• (a) that the operator, trustee or depositary of the scheme has contravened a requirement imposed on him by or under this Act;

• (b) that the operator, trustee or depositary of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

• (c) ... that one or more of the requirements for the making of the order are no longer satisfied; or

• (d) that none of paragraphs (a) to (c) applies, but it is undesirable in the interests of the participants or potential participants that the scheme should continue to be recognised.

Procedure.

280

• (1) If the FCA proposes to make an order under section 279 revoking a recognition order, it must give a warning notice to the operator and (if any) the trustee or depositary of the scheme.

• (2) If the FCA decides to ... make an order under that section—

• (a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme; and

• (b) the operator or the trustee or depositary may refer the matter to the Tribunal.

Directions.

281

• (1) In this section a “relevant recognised scheme” means a scheme recognised under section ... 272.

• (2) If it appears to the FCA that—

• (a) the operator, trustee or depositary of a relevant recognised scheme has contravened, or is likely to contravene, a requirement imposed on him by or under this Act,

• (b) the operator, trustee or depositary of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular,

• (c) one or more of the requirements for the recognition of such a scheme are no longer satisfied, or

• (d) none of paragraphs (a) to (c) applies, but the exercise of the power conferred by this section is desirable in order to protect the interests of participants or potential participants in a relevant recognised scheme who are in the United Kingdom,

it may direct that the scheme is not to be a recognised scheme for a specified period or until the occurrence of a specified event or until specified conditions are complied with.

Procedure on giving directions under section 281 and varying them otherwise than as requested.

282

• (1) A direction takes effect—

• (a) immediately, if the notice given under subsection (3) states that that is the case;

• (b) on such date as may be specified in the notice; or