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The Alternative Investment Fund Managers Regulations 2013

Type Statutory-Instrument

Publication 2013-07-16

Last updated 2026-02-25

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(4) Section 168 of the Act (appointment of persons to carry out investigations in particular cases) applies as if the reference at subsection (2)(c) to a contravention of section 21 of the Act included reference to unlawful marketing.

(5) Section 30 of the Act (enforceability of agreements resulting from unlawful communications) applies in relation to—

(a) controlled agreements entered into in consequence of unlawful marketing, as it applies in relation to controlled agreements entered into in consequence of an unlawful communication; and

(b) the exercise of rights conferred by a controlled investment in consequence of unlawful marketing, as it applies in relation to the exercise of such rights in consequence of an unlawful communication.

Contravention by authorised person

53

(1) In this regulation “unlawful marketing” means the marketing of an AIF—

(a) by an authorised person that is an AIFM or an investment firm in contravention of regulation 49, 50 or 51; or

(b) by an authorised person that is an AIFM in contravention of a provision of the EuSEF Regulation or the EuVECA Regulation.

(2) Unlawful marketing is actionable at the suit of a private person who suffers loss as a result of such marketing, subject to the defences and other incidents applying to actions for breach of statutory duty.

(3) Section 168 of the Act (appointment of persons to carry out investigations in particular cases) applies as if the reference at subsection (2)(c) to a contravention of section 238 of the Act included reference to unlawful marketing.

CHAPTER 2 — Marketing of AIFs by full-scope AIFMs

FCA approval for marketing

54

(1) This regulation applies to—

(a) a full-scope UK AIFM seeking to market an AIF managed by the AIFM that does not fall within regulation 57(1);

(b) a full-scope Gibraltar AIFM, seeking to market to retail investors an AIF managed by the AIFM—

(i) that does not fall within regulation 57(1); and

(ii) where the FCA has not received a regulator's notice referred to in paragraph 14(1)(b) of Schedule 3 to the Act as that paragraph applies in relation to Gibraltar...

(2) The AIFM must—

(a) apply to the FCA for approval in such manner as the FCA may direct; and

(b) provide such information as the FCA may reasonably require for the purpose of determining the application.

(3) The FCA must determine an application by a full-scope UK AIFM, in so far as that application is for approval to market to professional investors, within 20 working days of receipt of a completed application.

(4) The FCA must determine an application by a full-scope Gibraltar AIFM, or an application by a full scope UK AIFM in so far as that application is for approval to market to retail investors—

(a) if the application relates to an AIF in respect of which the AIFM has made an application for authorisation under section 242 or 261C of the Act or under regulation 12 of the Open-Ended Investment Companies Regulations 2001 , or for recognition under section 272 of the Act—

(i) before the end of the period for determining that application for authorisation or recognition; or

(ii) if later, within 20 working days of receipt of the completed application under this regulation;

(b) otherwise, within 20 working days of receipt of the completed application under this regulation.

(5) If the FCA approves the application, it must inform—

(a) the AIFM concerned; and

(b) where the AIF concerned is a Gibraltar AIF, the Financial Services Commission of Gibraltar.

(6) If the FCA proposes to refuse the application, it must give written notice to the AIFM concerned, stating the reasons for the proposed refusal.

(7) If the FCA decides to refuse the application—

(a) it must give written notice to the AIFM concerned, informing the AIFM of its right to refer the matter to the Tribunal; and

(b) the AIFM may refer the matter to the Tribunal.

(8) The FCA may refuse an application if it appears to the FCA that the AIFM does not or is unlikely to comply with an implementing provision that applies to it, or would apply to it if the application were approved.

Change to information provided with application

55

(1) If there is a material change to the information mentioned in regulation 54(2)(b), the AIFM must give written notice of the change to the FCA—

(a) in the case of a change planned by the AIFM (“planned change”), at least one month before implementing the change; or

(b) in other cases, as soon as reasonably practicable and, at the latest, immediately after an unplanned change has occurred.

(2) If a planned change would mean the AIFM no longer complied with an implementing provision applicable to it, the FCA must inform the AIFM without undue delay that it must not implement the change.

(3) If—

(a) a planned change is implemented, or

(b) an unplanned change takes place,

as a result of which the AIFM no longer complies with an implementing provision that applies to it, the FCA must take steps to ensure that the AIFM complies with that implementing provision or ceases to market the AIF.

(4) The FCA may use its powers under section 55J and 55L of the Act (variation or cancellation on initiative of regulator and imposition of requirement by the FCA) or the power applied by regulation 56 in taking the steps mentioned in paragraph (3), but this paragraph does not limit the powers of the FCA.

Suspension or revocation of approval granted to a full-scope Gibraltar AIFM

56

If the FCA has approved marketing by a full-scope Gibraltar AIFM under regulation 54, regulations 62 to 64 apply in relation to that approval as they apply in relation to an entitlement to market an AIF following a notification under regulation 57, 58 or 59, but with the following modifications—

(a) references to a notification under regulation 57, 58 or 59 are to be read as references to an application under regulation 54;

(b) references to an entitlement to market are to be read as references to an approval to market;

(d) regulations 62(1)(c) and 63(2)(c) are to be omitted.

CHAPTER 3 — National Private Placement

Marketing under Article 36 of the directive

57

(1) An AIF falls within this paragraph if it is—

(a) a third country AIF, or

(b) a UK AIF or a Gibraltar AIF that is a feeder AIF, the master AIF of which is either managed by a third country AIFM or is a third country AIF, and

managed by an AIFM falling within paragraph (2).

(1A) An AIF does not fall within paragraph (1) if it is recognised under section 271A of the Act.

(2) An AIFM falls within this paragraph if it is—

(a) a full-scope UK AIFM; or

(b) a full-scope Gibraltar AIFM.

(3) An AIFM falling within paragraph (2) must give written notification to the FCA before marketing an AIF managed by it that falls within paragraph (1).

(4) The notification must include a statement confirming that the following conditions are met—

(a) subject to paragraph (5), the AIFM complies with the requirements of the Financial Services and Markets Act 2000, these Regulations, any EU tertiary legislation made under the directive which forms part of assimilated law and rules made by the FCA;

(b) appropriate cooperation arrangements for the purpose of systemic risk oversight and in line with international standards are in place between the FCA (in the case of a UK AIFM) or the Financial Services Commission of Gibraltar (in the case of a Gibraltar AIFM), and the supervisory authorities of the relevant third country, in order to ensure an efficient exchange of information that enables the FCA or the Financial Services Commission of Gibraltar to carry out its duties in accordance with these Regulations or the Financial Services (Alternative Investment Fund Managers) Regulations 2013 of Gibraltar;

(c) the relevant third country is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force.

(5) The AIFM need not comply with the requirements of section 3.11 of the Investment Funds sourcebook, and regulations 29 to 32 of these Regulations, provided that the AIFM—

(a) ensures that one or more entities, other than the AIFM, are appointed to carry out the duties mentioned in rules 3.11.4(2), 3.11.20, 3.11.21, 3.11.23 and 3.11.25 of the Investment Funds sourcebook (a “third country AIF custodian”); and

(b) informs the FCA about the identity of such entities.

(6) In this regulation, “the relevant third country” means—

(a) in the case of a third country AIF, the country where the AIF is established; and

(b) in a case falling within paragraph (1)(b), the country where the master AIF is established.

Marketing of AIFs managed by small third country AIFMs

58

(1) A small third country AIFM must give written notification to the FCA before marketing an AIF managed by it , except where the AIF is recognised under section 271A of the Act.

(2) The notification must include a statement confirming that the following conditions are met—

(a) the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF; and

(b) the AIFM is a small third country AIFM.

(3) The AIFM must provide the FCA with such information as the FCA directs on—

(a) the main instruments in which the AIFM trades, and

(b) the principal exposures and most important concentrations of the AIFs that it manages,

in order to enable the FCA to monitor systemic risk effectively.

(4) The FCA may not give a direction under paragraph (3) that requires an AIFM to provide information—

(a) if an investor's acquisition of units or shares of the AIF results from marketing that is permitted because of the notification, after the date on which the final such investor disposes of such units or shares; or

(b) if there is no acquisition of units or shares of the AIF resulting from such marketing, after the date on which the AIFM ceases marketing the AIF.

Marketing under Article 42 of the directive

59

(1) A third country AIFM that is not a small AIFM must give written notification to the FCA before marketing an AIF managed by it , except where the AIF is recognised under section 271A of the Act .

(2) Subject to paragraph (4A), the notification must include a statement confirming that the following conditions are met—

(a) the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF;

(b) the AIFM complies with the requirements of sections 3.2, 3.3 and 3.4 of the Investment Funds sourcebook in so far as such provisions are relevant to the AIFM and the AIF to be marketed;

(d) appropriate cooperation arrangements for the purpose of systemic risk oversight and in line with international standards are in place between—

(i) the FCA and, if applicable, the Financial Services Commission of Gibraltar, and

(ii) the supervisory authorities of the country where the third country AIFM is established and, if applicable, of the third country where the AIF is established,

in order to ensure an efficient exchange of information that enables the FCA to carry out its duties in accordance with the Financial Services and Markets Act 2000, these Regulations, any EU tertiary legislation made under the directive which forms part of assimilated law and rules made by the FCA;

(e) the country where the third country AIFM and, if applicable, the third country AIF is established is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force.

(3) Subject to paragraph (4A), during the period specified in paragraph (4), an AIFM that has given a notification under paragraph (1) in respect of an AIF must comply with—

(a) the implementing provisions applicable to full-scope UK AIFMs which relate to the provisions of Articles 22 to 24 of the directive in so far as such provisions are relevant to the AIFM and the AIF; and

(b) Part 5 in respect of that AIF (if applicable).

(4) Subject to paragraph (4A), the period specified in this paragraph starts on the date on which the AIFM gives the notification under paragraph (1) and ends—

(a) if an investor's acquisition of units or shares of the AIF results from marketing that is permitted because of the notification, on the date on which the final such investor disposes of such units or shares; or

(b) if there is no acquisition of units or shares of the AIF resulting from such marketing, on the date on which the AIFM ceases marketing the AIF.

(4A) Paragraphs (2)(a) to (c), (3) and (4) do not apply to any AIF which has been declared to be a recognised scheme under section 272 of the Act.

Manner and content of notifications

60

A notification under regulation 57, 58 or 59 must—

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

(b) contain or be accompanied by such information as the FCA may direct.

Material change to information

61

If there is a material change to the information provided in a notification under regulation 57, 58 or 59, the AIFM must give written notice of the change to the FCA—

(a) in the case of a change planned by the AIFM (“planned change”), at least one month before implementing the change; or

(b) in other cases, immediately after an unplanned change has occurred.

Revocation of entitlement to market

62

(1) The FCA may revoke an AIFM's entitlement to market an AIF following a notification under regulation 57, 58 or 59 if it appears to the FCA that—

(a) the AIFM, or the third country AIF custodian of that AIF, has contravened an implementing provision which applies to it;

(b) the AIFM, or the third country AIF custodian of that AIF, has in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(d) the AIF is wound up; or

(e) none of sub-paragraphs (a) to (d) applies, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(2) If the FCA proposes to revoke an AIFM's entitlement to market an AIF on a ground mentioned in paragraph (1)(a), (b), (c) or (e), it must give a warning notice to the AIFM and, in the case of an entitlement to market following a notification under regulation 57, to the third country AIF custodian of that AIF.

(3) If the FCA decides to revoke an AIFM's entitlement to market an AIF under paragraph (1)—

(a) it must give a decision notice to the AIFM and, in the case of an entitlement to market following a notification under regulation 57, to the third country AIF custodian of that AIF; and

(b) the AIFM or the third country AIF custodian may refer the matter to the Tribunal.

Suspension of entitlement to market

63

(1) If one of the grounds in paragraph (2) is met, the FCA may suspend any entitlement of an AIFM to market an AIF arising out of a notification under regulation 57, 58 or 59 for a specified period, until the occurrence of a specified event or until specified conditions are complied with.

(2) The grounds are that it appears to the FCA that—

(a) the AIFM, or the third country AIF custodian of that AIF, has contravened, or is likely to contravene, an implementing provision that applies to it;

(b) the AIFM, or the third country AIF custodian of that AIF, has in purported compliance with an implementing provision, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(d) none of paragraphs (a) to (c) applies, but it is undesirable in the interests of investors or potential investors that the AIF should continue to be marketed.

(3) In this regulation “specified” means specified by the FCA in a notice given under regulation 64.

Procedure on suspension

64

(1) A suspension under regulation 63 takes effect—

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

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

(2) A suspension 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 suspending the AIFM's entitlement to market, considers that it is necessary for the suspension to take effect immediately (or on that date).

(3) If the FCA proposes to suspend an AIFM's entitlement to market an AIF, or suspends such entitlement with immediate effect—

(a) it must give separate written notice to the AIFM and (if applicable) the third country AIF custodian of that AIF; and

(b) the AIFM or the third country AIF custodian may refer the matter to the Tribunal.

(4) A notice under paragraph (3)(a) must—

(a) give details of the suspension;

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

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

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

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

(6) Paragraph (7) applies if, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) to make the suspension in the way proposed,

(b) to make the suspension in a way other than that proposed, or

(7) If this paragraph applies—

(a) the FCA must give separate written notice to the AIFM and (if applicable) the third country AIF custodian; and

(b) the AIFM or the third country AIF custodian may refer the matter to the Tribunal.

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

(a) not to make the suspension in the way proposed,

(b) to revoke a suspension,

it must give separate written notice to the AIFM and (if applicable) the third country AIF custodian.

(9) For the purposes of paragraph (1)(c), section 391(8) of the Act (publication) applies as if a notice under paragraph (3)(a), (7)(a) or (8) were a supervisory notice.

PART 7 — Duties and powers of the FCA

Designation as competent authority

65

The FCA is responsible for all functions of the competent authority provided for in any ... EU regulation made under the directive which forms part of assimilated law, in the EuSEF Regulation and in the EuVECA Regulation in the United Kingdom.

Requirement to notify ESMA of information required from AIFMs

66

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

Use of information by FCA and supervisory cooperation

67

(1) The FCA must use the information it gathers under rules 3.4.2 to 3.4.6C of the Investment Funds sourcebook and Articles 110 and 111 of the Commission Delegated Regulation in respect of AIFMs it supervises for the purposes of identifying the extent to which the use of leverage contributes to—

(a) the build up of systemic risk in the financial system;

(b) the risks of disorderly markets; or

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

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

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limits on leverage

68

(1) The FCA must—

(a) assess the risks that the use of leverage by full-scope UK AIFMs with respect to the AIFs managed by them could entail;

(b) use the measures in paragraph (2), if they are necessary in order to ensure the stability and integrity of the financial system, to limit the extent to which the use of leverage by a full-scope UK AIFM with respect to the AIFs managed by it contributes to—

(i) the build up of systemic risk in the financial system; or

(ii) the risks of disorderly markets.

(2) The measures are—

(a) imposing limits on the level of leverage that such an AIFM may employ; or

(b) imposing other restrictions on the management of such an AIF.

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

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) The FCA may use its powers under section 55J and 55L of the Act (variation or cancellation on initiative of regulator and imposition of requirements by the FCA) to impose limits on leverage or other restrictions on the management of an AIF, but this paragraph does not limit the powers of the FCA.

Exchange of information relating to potential systemic consequences of AIFM activity

69

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

PART 8 — Application of provisions of the Act

Application of procedural provisions of the Act

70

(1) Part 9 of the Act applies in the case of a matter referred to the Tribunal under these Regulations as it applies in the case of a matter referred to the Tribunal under the Act.

(2) Part 26 of the Act applies to warning notices and decision notices given under these Regulations as it applies to such notices given under the Act.

Application of provisions of the Act to unauthorised AIFMs

71

(1) The following provisions of the Act apply in respect of an unauthorised AIFM as they apply in respect of an authorised person—

(a) section 165 (regulators' power to require information: authorised persons etc.);

(b) section 166 (reports by skilled persons);

(d) section 176(3) (entry of premises under warrant);

(e) section 205 (public censure);

(f) section 206 (financial penalties).

(2) The following provisions of the Act apply in relation to the exercise of the powers under the provisions applied by paragraph (1)(a) to (c) as they apply in relation to the exercise of those powers in respect of authorised persons—

(a) section 169 (investigations etc. in support of overseas regulator);

(b) section 170 (investigations: general);

(d) section 174 (admissibility of statements made to investigators);

(e) section 175 (information and documents: supplemental provisions);

(f) section 176 (entry of premises under warrant);

(g) section 176A (retention of documents taken under section 176);

(h) section 177 (offences).

(3) Sections 207 to 211 of, and paragraph 20 of Schedule 1ZA to, the Act apply in relation to the exercise of the FCA's powers under section 205 or 206 of the Act as applied by paragraph (1)(e) and (f) as they apply in relation to their exercise in respect of authorised persons.

(4) Unauthorised AIFMs are to be treated as regulated persons for the purposes of paragraph 21 of Schedule 1ZA to the Act.

(5) In this regulation “unauthorised AIFM” means a person who is not an authorised person but who is—

(a) a small registered UK AIFM;

(b) a small registered Gibraltar AIFM;

(d) an AIFM that is entitled to market an AIF following a notification under regulation 58;

(e) an AIFM to which the requirement at regulation 59(3) applies; ...

(f) a full-scope Gibraltar AIFM that is exercising a right to market an AIF arising out of the EuSEF Regulation or the EuVECA Regulation ; or

(g) an AIFM to which regulation 75 (closed-ended AIFs whose subscription period has closed) applies

PART 9 — Transitional Provisions

AIFMs managing AIFs immediately before 22nd July 2013

72

(1) An AIFM falls within this paragraph if—

(a) it manages an AIF immediately before 22nd July 2013; and

(b) in the case of a third country AIFM, it markets that AIF in an EEA State before 22nd July 2013.

(2) Until the relevant date, an AIFM falling within paragraph (1) need not comply with implementing provisions other than those imposed by this regulation.

(3) A UK AIFM falling within paragraph (1) must submit an application for—

(a) a Part 4A permission to carry on the regulated activity of managing an AIF, or

(b) registration as a small registered UK AIFM,

before 22nd July 2014.

(4) Paragraph (3) does not apply to an AIFM that ceases to manage AIFs before 22nd July 2014.

(5) Part 6 does not apply in respect of an AIF managed by an AIFM falling within paragraph (1) until the relevant date.

(6) Until the relevant date, amendments and modifications to other enactments made by these Regulations or the Alternative Investment Fund Managers Order 2014 do not have effect in respect of an AIFM falling within paragraph (1) except in so far as they relate to the making or determination of applications for registration as a small registered UK AIFM or for a Part 4A permission to carry on the regulated activity of managing an AIF.

(6A) Paragraphs (6B) and (6C) apply where a UK AIFM falling within paragraph (1) submits an application in accordance with paragraph (3)(a) or (b), but on 22nd July 2014—

(a) where the application was submitted in accordance with paragraph (3)(a), the AIFM does not have a Part 4A permission to carry on the regulated activity of managing an AIF;

(b) where the application was submitted in accordance with paragraph (3)(b), the AIFM is not a small registered UK AIFM;

(d) the AIFM has not withdrawn the application in accordance with section 55V(4) of the Act (determination of applications).

(6B) During the additional transitional period—

(a) sections 19(1) (the general prohibition) and 20(1) and (1A) of the Act (authorised persons acting without permission) do not apply to the AIFM in respect of the activities to which the application relates, in so far as those activities are specified in article 51ZC of the Regulated Activities Order;

(b) notwithstanding paragraph (5), Part 6 of these Regulations does not apply to the AIFM in respect of the AIFs to which the application relates;

(i) where the application was submitted in accordance with paragraph (3)(a), as if the appropriate regulator (within the meaning of section 55V(1) of the Act (determination of applications)) had given the AIFM written notice on 22nd July 2014 granting its application with immediate effect;

(ii) where the application was submitted in accordance with paragraph (3)(b), as if the AIFM had been entered on the register of small registered UK AIFMs on 22nd July 2014; and

(d) if the AIFM is not an authorised person and is not an unauthorised AIFM (as defined in regulation 71(5)), the AIFM is to be treated as an unauthorised AIFM for the purposes of paragraphs (1) to (4) of regulation 71 (application of provisions of the Act to unauthorised AIFMs).

(6C) In paragraph (6B) “the additional transitional period” means the period starting on 22nd July 2014 and ending—

(a) where the application was submitted in accordance with paragraph (3)(a), on the date on which a Part 4A permission for the AIFM to carry on the regulated activity of managing an AIF has effect;

(b) where the application was submitted in accordance with paragraph (3)(b), on the date on which the AIFM becomes a small registered UK AIFM;

(d) on the date on which the AIFM withdraws the application.

(7) In this regulation, the “relevant date” means the earlier of—

(i) in respect of a UK AIFM that complies with the requirement in paragraph (3) to submit an application before 22nd July 2014, and AIFs managed by it, the date on which the FCA or PRA notifies the AIFM that its application has been determined;

(ii) in respect of an AIFM established in an EEA State other than the United Kingdom that applies for authorisation in accordance with Article 6.1 of the directive or registration in accordance with Article 3.3(a) of the directive before 22nd July 2014, and AIFs managed by it, the date on which the relevant competent authority notifies the AIFM that the application has been determined;

(iii) in respect of an AIF managed by a third country AIFM that notifies the FCA under regulation 58 or 59, the date on which the AIFM gives the notification; or

(b) 22nd July 2014.

AIFs subject to prospectus directive

73

(1) This regulation applies to an AIF, the securities of which are subject to an offer to the public under a prospectus that has been drawn up and published in accordance with the prospectus directive before 22nd July 2013, for the duration of the validity of that prospectus.

(2) Part 6 does not apply in respect of an AIF falling within paragraph (1).

(3) In this regulation, “prospectus directive” means Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading .

Closed-ended AIFs that make no additional investments

74

(1) This regulation applies to an AIFM in so far as immediately before 22nd July 2013 it manages an AIF that—

(a) is closed-ended; and

(b) makes no additional investments after 22nd July 2013.

(2) Notwithstanding regulation 72(3), the AIFM need not apply for—

(a) permission under Part 4A of the Act to manage that AIF; or

(b) registration as a small registered UK AIFM in respect of that AIF.

(3) The AIFM need not comply with the implementing provisions in respect of that AIF.

(4) If the AIFM is given a Part 4A permission to carry on the regulated activity of managing an AIF, article 72AA of the Regulated Activities Order (managers of UCITS and AIFs) does not apply in respect of the AIFM's management of the AIF referred to in paragraph (1).

(5) If, at the same time that the AIFM is given a Part 4A permission to manage an AIF, the AIFM's Part 4A permission is also varied by the removal from the regulated activities to which that permission relates of regulated activities that the AIFM carries on in connection with or for the purposes of managing the AIF referred to in paragraph (1), the AIFM is to be treated as if the AIFM's Part 4A permission had not been varied by such removal at such time.

(6) If, immediately before 22nd July 2013, the AIFM had a Part 4A permission to carry on an activity of the kind specified by article 51 of the Regulated Activities Order (establishing, operating or winding up a collective investment scheme) as that article applied at that date , from the relevant date (as defined in regulation 72(7)) that permission is to be treated as if it were a Part 4A permission to carry on an activity of the kind specified by article 51ZE of the Regulated Activities Order.

Closed-ended AIFs whose subscription period has closed

75

(1) This regulation applies to an AIFM in so far as immediately before 22nd July 2013 it manages an AIF—

(a) that is closed-ended;

(b) for which the subscription period for investors closed before 22nd July 2011; and

(2) Notwithstanding regulation 72(3), the AIFM need not apply for—

(a) permission under Part 4A of the Act to manage that AIF; or

(b) registration as a small registered UK AIFM in respect of that AIF.

(2A) If the AIFM is given a variation of its Part 4A permission to add the regulated activity of managing an AIF, article 72AA of the Regulated Activities Order (managers of UCITS and AIFs) does not apply in respect of the AIFM's management of the AIF referred to in paragraph (1).

(2B) If at the same time that the AIFM is given a Part 4A permission to manage an AIF, the AIFM's Part 4A permission is also varied by the removal from the regulated activities to which that permission relates of regulated activities that the AIFM carries on in connection with or for the purposes of managing the AIF referred to in paragraph (1), the AIFM is to be treated as if the AIFM's Part 4A permission had not been varied by such removal at such time.

(2C) If, immediately before 22nd July 2013, the AIFM had a Part 4A permission to carry on an activity of the kind specified by article 51 of the Regulated Activities Order (establishing, operating or winding up a collective investment scheme) as that article applied at that date , from the relevant date (as defined in regulation 72(7)) that permission is to be treated as if it were a Part 4A permission to carry on an activity of the kind specified by article 51ZE of the Regulated Activities Order.

(3) Subject to paragraph (4), the AIFM need not comply with the implementing provisions in respect of that AIF.

(4) From 22nd July 2014, the AIFM must comply with—

(a) provisions in Part 5 of these Regulations, and

(b) implementing provisions relating to Article 22 of the directive (annual report)

with which it would be required to comply in respect of that AIF but for the preceding paragraphs of this regulation.

(5) The AIFM must give the FCA such information in respect of its compliance with paragraph (4) as the FCA may direct.

(6) The AIFM must give information required under paragraph (5) at such times and in such manner, and verify that information in such manner, as the FCA may direct.

(7) The AIFM must take such steps as are necessary to ensure compliance with paragraph (4) as the FCA may direct.

(8) Sections 55Y (exercise of own-initiative power: procedure) and 55Z3(2) (right to refer matters to the Tribunal) of the Act apply to a direction to an AIFM under paragraph (7) as they apply to a requirement imposed on an authorised person under section 55L(3) of the Act (imposition of requirements by the FCA).

Permission to act as trustee or depositary of an AIF

76

(1) In this regulation—

“the new activity” means the activity specified in article 51ZD of the Regulated Activities Order (acting as trustee or depositary of an AIF) ;

“the old activity” means the activity of acting as trustee of an authorised unit trust scheme, acting as the depositary of an authorised contractual scheme or acting as the depositary of an open-ended investment company, as specified in article 51(1)(b), (bb) or (c) of the Regulated Activities Order as it was in force immediately before 22nd July 2013 ;

“the relevant date” in respect of a person means the earlier of—the date on which the FCA or PRA notifies the person that their application for Part 4A permission to carry on the new activity has been determined; or22nd July 2014.

(2) Section 20(1) and (1A) of the Act (authorised persons acting without permission) does not apply to an authorised person who carries on the new activity before the relevant date without a Part 4A permission to carry on that activity if the person meets condition A and condition B.

(3) Condition A is that the person—

(a) carries on the activity for an AIF that is not an authorised AIF; or

(b) has a Part 4A permission to carry on the old activity (see paragraph (5)).

(4) Condition B is that the person—

(a) meets the requirements for appointment as a depositary imposed by implementing provisions relating to Article 21.3 of the directive; and

(b) has its registered office or has established a branch in the United Kingdom.

(5) If a person has a Part 4A permission to carry on the old activity immediately before 22nd July 2013 and that person continues to carry on that activity on or after 22nd July 2013, the amendments to other enactments made by these Regulations which relate to removal from the Regulated Activities Order of the specification of the old activity do not apply in respect of that person until the relevant date.

(6) Article 42A of the Regulated Activities Order (depositaries of UCITS and AIFs) applies to a person who—

(a) is carrying on the new activity without a Part 4A permission to carry on that activity but who, pursuant to paragraph (2), is not to be taken to have contravened a requirement, and

(b) does not have a Part 4A permission to carry on the regulated activity specified in article 40 of the Regulated Activities Order (safeguarding and administering investments),

as it does to a person who has a Part 4A permission to carry on the new activity.

(7) A person who carries on the new activity and who, pursuant to paragraph (2), need not have a Part 4A permission to carry on that activity, must comply with all other implementing provisions in respect of that activity that would apply if the person had such a Part 4A permission.

Depositaries of EEA AIFs until 22nd July 2017

77

(1) This regulation applies if, in accordance with the transitional provision in article 61.5 of the directive, the FCA or an authority in another EEA State permits a credit institution that is—

(a) authorised under the capital requirements directive, and

(b) established in the United Kingdom,

to be appointed as the depositary of an EEA AIF.

(2) Until 22nd July 2017, regulations 29 to 32 (depositary liability) apply in relation to such a depositary as they apply in relation to the depositary of a UK AIF managed by a full-scope UK AIFM.

Permission for existing managers, depositaries and trustees of UCITS

78

(1) In this regulation—

“new activity” means—the regulated activity of managing a UCITS, specified in article 51ZA of the Regulated Activities Order;the regulated activity of acting as the trustee of an authorised unit trust scheme where the scheme is a UCITS, specified in article 51ZB(1)(a) of the Regulated Activities Order;the regulated activity of acting as the depositary of an authorised contractual scheme where the scheme is a UCITS, specified in article 51ZB(1)(b) of the Regulated Activities Order; orthe regulated activity of acting as the depositary of an open-ended investment company where the company is a UCITS, specified in article 51ZB(1)(b) of the Regulated Activities Order;

“old activity” means—the regulated activity of establishing, operating or winding up a collective investment scheme or acting as sole director of an open-ended investment company, specified in article 51(1)(a) or (c) of the Regulated Activities Order as it was in force immediately before 22nd July 2013, where the scheme or company is a UCITS;the regulated activity of acting as a trustee of an authorised unit trust scheme, specified in article 51(1)(b) of the Regulated Activities Order as it was in force immediately before 22nd July 2013, where the scheme is a UCITS;the regulated activity of acting as a depositary of an authorised contractual scheme, specified in article 51(1)(bb) of the Regulated Activities Order as it was in force immediately before 22nd July 2013, where the scheme is a UCITS; orthe regulated activity of acting as a depositary of an open-ended investment company, specified in article 51(1)(c) of the Regulated Activities Order as it was in force immediately before 22nd July 2013, where the company is a UCITS;

“the relevant date” in respect of a person means the earlier of—the date on which the FCA or PRA notifies the person that their application for Part 4A permission to carry on the new activity has been determined; or22nd July 2014;

“UCITS” has the meaning given in Article 1.2 of the UCITS directive.

(2) For the purposes of this regulation the activity described in paragraph (a), (b), (c) or (d) of the definition of “new activity” in paragraph (1) is equivalent to the activity described in the paragraph bearing the same letter in the definition of “old activity” in paragraph (1).

(3) If a person has a Part 4A permission to carry on an old activity immediately before 22nd July 2013 and that person continues to carry on that activity in relation to a UCITS on or after 22nd July 2013, the amendments to other enactments made by these Regulations or the Alternative Investment Fund Managers Order 2014 which relate to removal from the Regulated Activities Order of the specification of that old activity do not apply in respect of that person until the relevant date.

(4) Section 20(1) and (1A) of the Act (authorised persons acting without permission) does not apply to a person's carrying on of a new activity before the relevant date without a Part 4A permission to carry on that activity if the person continues to have a Part 4A permission to carry on the equivalent old activity in relation to a UCITS.

(5) If, immediately before 22nd July 2014, the person continues to carry on the old activity in relation to a UCITS, and has a Part 4A permission to do so, from 22nd July 2014 the person has Part 4A permission to carry on the equivalent new activity.

PART 10 — Final provisions

Review

79

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

Amendments to primary legislation

80

Schedule 1, which contains amendments to primary legislation and related transitional provisions, has effect.

Amendments to secondary legislation

81

(1) Schedule 2 (which contains amendments to secondary legislation) has effect.

(2) Paragraph (3) has effect—

(a) for the purpose of the FCA and PRA making rules, giving directions and imposing requirements, and for the purpose of the FCA giving guidance, immediately after Schedule 2 has effect;

(b) for all other purposes, on the date on which regulation 3 of and Schedule 1 to the Alternative Investment Fund Managers (Amendment) Regulations 2013 come into force.

(3) In paragraph 11 of Schedule 8 to the Regulated Activities Order (persons excluded from regulated activity of managing an AIF) , at the end insert “ , that is registered in the United Kingdom in accordance with Part 3 of these Regulations ”.

SCHEDULE 1 — AMENDMENTS TO PRIMARY LEGISLATION

PART 1 — Amendments to the Financial Services and Markets Act 2000

1

The Act is amended as follows.

2

In section 1A(6) (the Financial Conduct Authority) , after paragraph (c) omit “or” and insert—

(ca) the Alternative Investment Fund Managers Regulations 2013, or

3

In section 1L(2) (supervision, monitoring and enforcement), after paragraph (a) omit “or” and insert—

(aa) with requirements imposed on them by the Alternative Investment Fund Managers Regulations 2013, or

4

In section 55H (refusal by FCA to vary permission at request of authorised person), after subsection (4) insert—

(4A) The FCA may also refuse an application under this section if it appears to the FCA that the authorised person would not comply with requirements in Part 5 of the Alternative Investment Fund Managers Regulations 2013 (AIFs which acquire control of non-listed companies and issuers) that would apply to the authorised person.

5

In section 55J (variation or cancellation on initiative of regulator)—

(a) in subsection (1)—

(i) at the end of paragraph (b), omit “or”, and

(ii) at the end of paragraph (c) insert—

, or (d) in the case of the FCA, A has failed to comply with a requirement in Part 5 of the Alternative Investment Fund Managers Regulations 2013 (AIFs which acquire control of non-listed companies and issuers), or it is for some other reason desirable to exercise the power for the purposes of ensuring compliance with such a requirement.

(b) after subsection (6) insert—

(6A) Without prejudice to the generality of subsections (1) to (3), the FCA may, in relation to an authorised person who is a full-scope UK AIFM, exercise its power under this section to cancel the Part 4A permission if it appears to it that any of the following conditions is met— (a) the person has failed, during a period of at least six months, to carry on the regulated activity of managing an AIF; (b) the person obtained the Part 4A permission to carry on the regulated activity of managing an AIF by making a false statement or by any other irregular means; (c) in a case where the Part 4A permission includes permission to provide the discretionary portfolio management service referred to in Article 6.4(a) of the alternative investment fund managers directive, the person no longer complies with Directive 2006/49/EC of the European Parliament and of the Council on the capital adequacy of investment firms and credit institutions ; (d) the person no longer meets the conditions that a person must meet in order to obtain a Part 4A permission to carry on the regulated activity of managing an AIF; (e) the person has seriously or systematically infringed— (i) any provision of the Alternative Investment Fund Managers Regulations 2013; (ii) a provision of any directly applicable EU regulation made under the alternative investment fund managers directive; or (iii) any provision made by or under this Act which implements that directive.

6

In section 55V (determination of applications) after subsection (7) insert—

(8) In the case of an application for permission under this Part which— (a) relates to the regulated activity of managing an AIF, and (b) would if granted result in the applicant becoming a full-scope UK AIFM, this section has effect subject to regulation 5 of the Alternative Investment Fund Managers Regulations 2013 and, accordingly, subsections (1) to (3) do not apply.

7

In section 59 (approval for particular arrangements) after subsection (7B) insert—

(7C) A regulator may not exercise the power in subsection (3) so as to provide for a function to be a controlled function in relation to the carrying on of the regulated activity of managing an AIF by an AIFM which— (a) is also an AIF; (b) does not manage any AIF other than itself; (c) is a body corporate; and (d) is not a collective investment scheme.

8

In section 66(2)(b) (disciplinary powers) after sub-paragraph (i) omit “or” and insert—

(ia) by the Alternative Investment Fund Managers Regulations 2013, or

9

In section 165 (regulators' power to require information: authorised persons etc.), in subsection (7)(b) omit “270 or”.

10

In section 168(4) (appointment of persons to carry out investigations in particular cases) , omit “or” at the end of paragraph (j), and after paragraph (j) insert—

(ja) a person may have contravened— (i) any provision made by or under this Act for the purpose of implementing the alternative investment fund managers directive; or (ii) any provision made by the Alternative Investment Fund Managers Regulations 2013; or

11

In section 193(1) (interpretation of Part 13) , in the definition of “incoming firm”, omit “or” at the end of paragraph (aa) and after paragraph (aa) insert—

(ab) an EEA AIFM which is exercising, or has exercised, its right to market an AIF in the United Kingdom in accordance with Schedule 3; or

12

In section 194 (general grounds on which power of intervention is exercisable), after subsection (4) insert—

(5) The FCA may exercise its power of intervention in respect of an EEA AIFM if it appears to the FCA that the EEA AIFM has contravened, or is likely to contravene, a requirement imposed by— (a) the Alternative Investment Fund Managers Regulations 2013; or (b) any directly applicable EU regulation made under the alternative investment fund managers directive.

13

In section 195A (contravention by relevant EEA firm or EEA UCITS of directive requirements: home state regulator primarily responsible for securing compliance) —

(a) in the heading, for “or EEA UCITS”, substitute “ , EEA UCITS or EEA AIFM ”;

(b) after subsection (1)(b) insert—

; or (c) that an EEA AIFM has contravened, or is contravening, a requirement falling within subsection (3A) (in a case to which Article 45.7 or 45.8 of the alternative investment fund managers directive applies).

(3A) A requirement falls within this subsection if it is imposed on the EEA AIFM— (a) by or under any provision adopted in the AIFM's home state for the purpose of implementing the alternative investment fund managers directive; or (b) by any directly applicable EU regulation made under that directive.

(d) for subsection (8) substitute—

(8) Condition B is— (a) in the case of a relevant EEA firm, that the firm is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the orderly functioning of the markets; (b) in the case of an EEA UCITS, that the EEA UCITS is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom; or (c) in the case of an EEA AIFM, that the AIFM is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the financial stability or integrity of the markets in the United Kingdom.

(e) in subsection (11B), for “or (3)”, substitute “ , (3) or (3A) ”;

(f) in subsection (12)—

(i) in the definition of “the appropriate regulator” for “where the relevant EEA firm is” substitute “ in the case of a relevant EEA firm which is ”; and

(ii) in the definition of “home state” after paragraph (b) insert—

(c) in relation to an EEA AIFM, the EEA State in which the AIFM has its registered office;

14

In section 199 (additional procedure for EEA firms in certain cases) —

(a) in subsection (3A), for “or (f)”, substitute “ , (f) or (h) ”;

(b) in subsection (3B) for “to (8)” substitute “ and (5) ”;

(5A) Subsections (6) to (8) apply to an incoming EEA firm other than a firm falling within paragraph 5(da) or (h) of Schedule 3.

15

In section 204A(2) (meaning of “relevant requirement”) —

(a) omit “or” after paragraph (a);

(b) after paragraph (b) insert—

, or (c) by the Alternative Investment Fund Managers Regulations 2013.

16

In section 237(3) (other definitions) in the definition of “a recognised scheme” omit “, 270”.

17

In section 261D(8) (authorisation orders for contractual schemes) for “permission to act as operator” substitute “ such permission as may be necessary to act as operator ”.

18

Omit sections 270 and 271 and the preceding cross-heading (schemes authorised in designated countries or territories) .

19

In section 272 (individually recognised overseas schemes) , in subsection (1)—

(a) after paragraph (b) insert “ and ”; and

(b) omit paragraph (c) (including the “and” following it).

20

In section 277 (alteration of schemes and changes of operator, trustee or depositary), after subsection (3) insert—

(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.

21

After section 277 insert—

(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.

22

Omit the cross-heading “Schemes recognised under sections 270 and 272” before section 278.

23

In section 278 (rules as to scheme particulars) omit “270 or”.

24

In section 279 (revocation of recognition)—

(a) in the opening words, omit “direct that a scheme is to cease to be recognised by virtue of section 270 or”;

(b) in paragraph (c) omit “in the case of an order under section 272,”.

25

In section 280 (procedure)—

(a) in subsection (1) for “give a direction under section 279 or to make an order under that section” substitute “ make an order under section 279 ”; and

(b) in subsection (2) omit “give a direction or”.

26

In section 281 (directions)—

(a) in subsection (1) omit “270 or”; and

(b) in subsection (2)(c) for “a scheme under section 272” substitute “ such a scheme ”.

27

In section 380(6)(a) (injunctions) —

(a) omit “or” after sub-paragraph (i);

(b) after sub-paragraph (ii) insert—

; or (iii) which is imposed by the Alternative Investment Fund Managers Regulations 2013;

28

In section 382(9)(a) (restitution orders) —

(a) omit “or” after sub-paragraph (i);

(b) after sub-paragraph (ii) insert—

; or (iii) which is imposed by the Alternative Investment Fund Managers Regulations 2013;

29

In section 384(7) (power of FCA or PRA to require restitution) —

(a) omit “and” after paragraph (a);

(b) after paragraph (b) insert—

; and (c) a requirement imposed by the Alternative Investment Fund Managers Regulations 2013.

30

In section 398 (misleading the FCA or PRA: residual cases) —

(a) in subsection (1) for “imposed by or under this Act, or by the short selling regulation,” substitute “ falling within subsection (1A) ”;

(b) after subsection (1) insert—

(1A) A requirement falls within this subsection if it is imposed by or under— (a) this Act; (b) the Alternative Investment Fund Managers Regulations 2013; (c) the short selling regulation; (d) Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds ; or (e) Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds .

31

In section 417(1) (definitions) in the appropriate places insert—

“AIF” has the meaning given in regulation 3 of the Alternative Investment Fund Managers Regulations 2013;

“full-scope UK AIFM” has the meaning given in regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;

32

In section 425 (expressions relating to authorisation elsewhere in the single market) , in subsection (1)(a)—

(a) at the beginning insert “ “alternative investment fund managers directive”, ”, and

(b) after “ “life assurance consolidation directive”,”, insert “ “EEA AIFM”, ”.

33

In Schedule 1ZA (the Financial Conduct Authority), in paragraph 23(2)(a) (fees) for “other Acts mentioned in section 1A(6)” substitute “ other enactments mentioned in section 1A(6)(a) to (ca) ”.

34

(1) Schedule 3 (EEA passport rights) is amended as follows.

(2) In paragraph 1 (the single market directives) omit “and” at the end of paragraph (e), and after paragraph (f) insert—

; and (g) the alternative investment fund managers directive.

(3) After paragraph 4D (the emission allowance auctioning directive) , insert—

(4E) “The alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.

(4) In paragraph 5 (EEA firm) , omit “or” at the end of paragraph (f), and after paragraph (g) insert—

; or (h) an AIFM (as defined in Article 4.1(b) of the alternative investment fund managers directive) which is authorised (in accordance with Article 6.1 of that directive) by its home state regulator.

(5) In paragraph 5A (definition of “relevant office” for EEA firm) , after paragraph (a) insert—

(aa) in relation to a firm falling within sub-paragraph (h) of that paragraph, its registered office;

(6) In paragraph 7A (definition of “relevant office” for EEA right), after paragraph (a) insert—

(aa) in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive, its registered office;

(7) In paragraph 10A (definition of “relevant office” for UK firm), after paragraph (a) insert—

(aa) in relation to a firm whose EEA right derives from the alternative investment fund managers directive, its registered office;

(8) After paragraph 11C (UCITS) , insert—

(11D) “EEA AIFM” means an EEA firm falling within paragraph 5(h) which is exercising in the United Kingdom a right deriving from the alternative investment fund managers directive.

(9) In paragraph 13 (establishment) —

(a) in sub-paragraph (1), for “or (f)”, in the first place, substitute “ , (f) or (h) ”;

(b) at the end of sub-paragraph (1)(ba), omit “and”;

; and (d) in the case of a firm falling within paragraph 5(h), its home state regulator has informed it that the consent notice has been sent to the appropriate UK regulator.

(d) in sub-paragraph (2)(b), after “5(a)”, insert “ or (h) ”.

(10) In paragraph 14 (services) —

(a) in sub-paragraph (1)(b), for “or (f)” substitute “ , (f) or (h) ”;

(b) in sub-paragraph (1)(c), for “or (e)”, substitute “ , (e) or (h) ”;

(d) after sub-paragraph (3), insert—

(3A) In cases where the firm is an EEA AIFM that seeks to market an AIF in exercise of its rights under Article 32 of the alternative investment fund managers directive, the appropriate UK regulator must ensure that the regulator's notice may be transmitted to it electronically.

(11) In paragraph 19 (establishment) —

(a) in sub-paragraph (1) for “and (5A)” substitute “ , (5A) and (7BC) ”;

(b) after sub-paragraph (7B), insert—

(7BA) Sub-paragraph (7BB) applies where— (a) the firm's EEA right derives from the alternative investment fund managers directive, (b) the first condition is satisfied, and (c) the appropriate UK regulator is satisfied that the firm complies, and will continue to comply, with— (i) the provisions implementing the alternative investment fund managers directive, and (ii) any directly applicable EU regulation made under that directive. (7BB) The appropriate UK regulator must— (a) within two months of receiving the firm's notice of intention, give a consent notice to the host state regulator, (b) send with that notice confirmation that the firm has been authorised by it pursuant to Article 6.1 of the alternative investment fund managers directive, and (c) immediately notify the firm that it has given the consent notice to the host state regulator. (7BC) If the firm's EEA right derives from the alternative investment fund managers directive, the third condition does not apply.

(c) in sub-paragraph (12A)(a), after “UCITS directive”, insert “ or the alternative investment fund managers directive ”.

(12) In paragraph 20 (services) —

(a) in sub-paragraph (1), for “sub-paragraphs (4D) and (4E)”, substitute “ sub-paragraphs (4D) to (4F) ”;

(b) after sub-paragraph (3C), insert—

(3D) If the firm's EEA right derives from the alternative investment fund managers directive, the appropriate UK regulator must— (a) if the condition in sub-paragraph (3E) is satisfied— (i) within one month of receiving the firm's notice of intention, send a copy of the firm's notice of intention to the host state regulator; (ii) send with that notice confirmation that the firm has been authorised by it pursuant to Article 6.1 of that directive, with such other information as may be specified; and (iii) immediately notify the firm that it has given the notice and confirmation to the host state regulator; or (b) give the firm written notice of its refusal to send a copy of the notice of intention to the host state regulator and its reasons for that refusal. (3E) The condition is that the appropriate UK regulator is satisfied that the firm complies, and will continue to comply, with— (a) the provisions implementing the alternative investment fund managers directive, and (b) any directly applicable EU regulation made under that directive.

(d) in sub-paragraph (4B), after “any of the insurance directives or from”, insert “ the alternative investment fund managers directive, ”; and

(e) after sub-paragraph (4E), insert—

(4F) This paragraph does not apply to— (a) the operator of a UCITS established in the United Kingdom seeking to exercise an EEA right to market the units of that UCITS in the territory of another EEA State; or (b) a UK firm seeking to exercise an EEA right under the alternative investment fund managers directive to market an AIF.

(13) In the heading before paragraph 20B (notice of intention to market) , after “market” insert “ a UCITS ”.

(14) After paragraph 20B, insert—

(20C) (1) A full-scope UK AIFM may not exercise in the territory of another EEA State an EEA right under the alternative investment fund managers directive to market a UK AIF or EEA AIF managed by it unless two conditions are satisfied. (2) The first condition is that the full-scope UK AIFM has given the appropriate UK regulator, in the specified way, notice of its intention to market the AIF (“notice of intention”) which contains, and is accompanied by, such information as may be specified. (3) The appropriate UK regulator must ensure that the notice of intention and any accompanying information may be transmitted to it electronically. (4) The second condition is that the appropriate UK regulator has sent a copy of the notice of intention to the host state regulator, and has given written notice to the full-scope UK AIFM that it has done so. (5) Sub-paragraph (6) applies where— (a) the appropriate UK regulator is satisfied that the full-scope UK AIFM complies, and will continue to comply, with— (i) the provisions implementing the alternative investment fund managers directive, and (ii) any directly applicable EU regulation made under that directive, and (b) if the UK AIF or EEA AIF is a feeder AIF, its master AIF is a UK AIF or EEA AIF that is managed by— (i) a full-scope UK AIFM, or (ii) an AIFM authorised in another EEA State in accordance with Article 6.1 of the alternative investment fund managers directive. (6) The appropriate UK regulator must send a copy of the notice of intention to the host state regulator within 20 working days of receiving it. (7) When sending a copy of the notice of intention to the host state regulator, the appropriate UK regulator must send with the notice confirmation that the full-scope UK AIFM concerned is authorised to manage AIFs with a particular investment strategy, and a statement of that strategy. (8) If the notice of intention relates to an EEA AIF, the appropriate UK regulator must, when it sends a copy of the notice to the host state regulator, also inform the competent authority of the EEA AIF that the full-scope UK AIFM may start marketing the AIF in the EEA States covered by the notice. (9) The appropriate UK regulator must notify the full-scope UK AIFM immediately that the copy of the notice of intention has been sent to the host state regulator. (10) The full-scope UK AIFM may market the AIF in the territory of the host state regulator from the date it receives the notification referred to in sub-paragraph (9). (11) If the appropriate UK regulator refuses to send a copy of the notice of intention to the host state regulator— (a) the appropriate UK regulator must give the AIFM written notice of its refusal and its reasons for that refusal; and (b) the AIFM may refer the matter to the Tribunal. (12) In this paragraph— - “competent authority” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013; - “EEA AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013; - “feeder AIF” has the meaning given in Article 4.1(m) of the alternative investment fund managers directive; - “master AIF” has the meaning given in Article 4.1(y) of that directive; - “specified” means specified in rules; - “UK AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.

(15) After paragraph 28 (management companies: request for information) insert—

(29) If a host state regulator informs the FCA in accordance with paragraph 5 of Article 45 of the alternative investment fund managers directive that a full-scope UK AIFM has refused to provide the information or to take the steps referred to in that paragraph, the appropriate UK regulator must— (a) take steps to ensure that the AIFM provides the information or complies with the rules of which it is in breach; (b) request any necessary information from a supervisory authority in a country that is not an EEA State; and (c) notify the host state regulator of the steps taken under paragraph (a).

35

In paragraph 2(2) of Schedule 5 (permission for open-ended investment companies to operate collective investment schemes) , after “regulated activity” insert “ other than the activity of managing an AIF ”.

36

In paragraph 2B of Schedule 6 (threshold conditions) —

(a) in sub-paragraph (1), for “or (4)(a)”, substitute “ , (4)(a) or (7) ”;

(b) after sub-paragraph (6), insert—

(7) If A is seeking to carry on, or is carrying on, the regulated activity of managing an AIF and is, or upon being granted Part 4A permission to carry on that regulated activity would be, a full-scope UK AIFM, A's head office and registered office must be in the United Kingdom.

PART 2 — Amendments to other primary legislation

Charities Act (Northern Ireland) 1964

37

Until its repeal by the Charities Act (Northern Ireland) 2008 comes into force , section 25 of the Charities Act (Northern Ireland) 1964 (common investment schemes), has effect with the insertion after subsection (3) of the following—

(3A) A common investment scheme may provide for appropriate bodies to be admitted to participate in the scheme (in addition to the participating charities) to such extent as the trustees appointed to manage the fund may determine. (3B) In this section “appropriate body” means— (a) a Scottish recognised body, (b) an England and Wales charity, or (c) any body of persons or trust that— (i) is established in an EEA state other than the United Kingdom, and (ii) is a charity as defined by paragraph 1 of Schedule 6 to the Finance Act 2010 , and, in the application of the relevant provisions in relation to a scheme which contains provisions authorised by subsection (3A), “charity” includes an appropriate body.“The relevant provisions” are subsections (1), (4) to (7), (11) and (in relation only to a charity within paragraph (b)) subsection (12). (3C) In subsection (3B) “Scottish recognised body” means a body— (a) established under the law of Scotland, or (b) managed or controlled wholly or mainly in or from Scotland, to which the Commissioners for Her Majesty's Revenue and Customs have given intimation, which has not subsequently been withdrawn, that relief is due under Part 10 of the Income Tax Act 2007, or that qualifying relief is due under Part 11 of the Corporation Tax Act 2010, in respect of income of the body which is applicable and applied to charitable purposes only. (3D) In that subsection “England and Wales charity” means an institution— (a) which is a charity under the law of England and Wales, and (b) to which the Commissioners for Her Majesty's Revenue and Customs have given intimation, which has not subsequently been withdrawn, that relief is due under Part 10 of the Income Tax Act 2007, or that qualifying relief is due under Part 11 of the Corporation Tax Act 2010, in respect of income of the institution which is applicable and applied to charitable purposes only. (3E) For purposes of this section relief under any provision of Part 11 of the Corporation Tax Act 2010 other than— (a) section 480 (exemption for profits of small-scale trades), and (b) section 481 (exemption from charges under provisions to which section 1173 applies), is qualifying relief under that Part.

Fair Trading Act 1973

38

In section 118(6A) of the Fair Trading Act 1973 (trading schemes to which Part 11 applies) after paragraph (e) insert—

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