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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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(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—

(ea) managing a UCITS; (eb) acting as trustee or depositary of a UCITS; (ec) managing an AIF; (ed) acting as trustee or depositary of an AIF;

Companies Act 1989

39

In section 176(8) of the Companies Act 1989 (power to make provision about certain other charges) after paragraph (e) omit “or” and insert—

(ea) managing a UCITS; (eb) acting as trustee or depositary of a UCITS; (ec) managing an AIF; (ed) acting as trustee or depositary of an AIF; or

Value Added Tax Act 1994

40

In Part 2 of Schedule 9 (exemptions) to the Value Added Tax Act 1994 , in Group 5 (finance)—

(a) omit paragraphs (g) and (h) of item 9; and

(b) in note (6) omit the definition of “recognised collective investment scheme authorised in a designated country or territory”.

Terrorism Act 2000

41

In paragraph 6(1A) of Schedule 6 to the Terrorism Act 2000 (financial information) after paragraph (e) insert—

(ea) managing a UCITS, (eb) acting as trustee or depositary of a UCITS, (ec) managing an AIF, (ed) acting as trustee or depositary of an AIF,

Companies Act 2006

42

In section 1278(1) of the Companies Act 2006 omit paragraph (f).

Charities Act (Northern Ireland) 2008

43

In sections 43(5) (schemes to establish common investment funds) and 44(5) (schemes to establish common deposit funds) of the Charities Act (Northern Ireland) 2008—

(a) in paragraph (a), omit “or”;

(b) after paragraph (b), insert—

; 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,

Charities Act 2011

44

In sections 97(3) (bodies which may participate in common investment schemes) and 101(3) (bodies which may participate in common deposit schemes) of the Charities Act 2011 —

(a) in paragraph (a), omit “or”;

(b) after paragraph (b), insert—

; 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.

PART 3 — Transitional provisions in respect of recognised overseas schemes

45

(1) A collective investment scheme which immediately before 22nd July 2013 was recognised by virtue of section 270 of the Act (schemes authorised in designated countries or territories) is to be treated on and after that date as if it were recognised pursuant to an order under section 272 of the Act (individually recognised overseas schemes), and may be revoked in accordance with the provisions applying to such an order.

(2) Sub-paragraphs (3) to (5) apply in relation to a collective investment scheme which immediately before 22nd July 2013 was recognised by virtue of section 270 of the Act or pursuant to an order under section 272 of the Act.

(3) The operator of the scheme is to be treated for the purposes of section 277A(2) of the Act (regular provision of information relating to compliance with requirements for recognition) as if it had provided information to the FCA pursuant to a direction under section 277A(1) of the Act on 21st July 2013.

(4) If the FCA gives a direction under section 277(5) (alteration of schemes and changes of operator, trustee or depositary) or 277A(1) of the Act pursuant to which requires the operator is required to provide information to the FCA before 22nd July 2014, and the operator has not provided such information before 5th August 2014, the scheme will cease to be recognised on 5th August 2014.

(5) If the operator of the scheme gives written notice of a proposed alteration to the FCA under section 277(1) of the Act after 21st July 2013 but before 22nd July 2014, section 277(2) of the Act applies to that proposal as if the reference in section 277(2)(b) to a period of one month referred to a period of three months.

(6) In this paragraph “the operator” has the meaning given in section 237(2) of the Act (other definitions).

SCHEDULE 2 — AMENDMENTS TO SECONDARY LEGISLATION

PART 1 — Amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

1

(1) The Regulated Activities Order is amended as follows.

(2) In article 3(1) (interpretation) —

(a) in paragraph (a) of the definition of “overseas person” for “51” substitute “ 51ZA, 51ZB, 51ZC, 51ZD, 51ZE ”; and

(b) insert the following definitions in the appropriate places—

“AIFM” has the meaning given by regulation 4 of the Alternative Investment Fund Managers Regulations 2013;

“EEA AIFM” has the meaning given by regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;

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

“small registered UK AIFM” has the meaning given by regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;

“UCITS” has the meaning given by Article 1.2 of the UCITS directive;

“UK AIF” has the meaning given by regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;

(3) In articles 4(2) (specified activites: general) , 8(a) (sums received by persons authorised to deal etc.), 15(2)(g) (absence of holding out etc.), 16(1)(b) (dealing in contractually based investments) and 33(b)(iii) (introducing), for “51” substitute “ 51ZA, 51ZB, 51ZC, 51ZD, 51ZE ”.

(4) In articles 9AA, 51A, 52A, 58A and 60A (information society services) —

(a) in the heading, at the end insert “ and managers of UCITS and AIFs ”;

(b) for “exclusion” substitute “ exclusions ”; and

(5) In article 12A (information society services) —

(a) in the heading, at the end insert “ and managers of UCITS and AIFs ”;

(b) for “exclusion” substitute “ exclusions ”; and

(6) In articles 20 , 36(2) , 50, 55(2), 63A , 63E , 63I and 63M (other exclusions), for “and 72A (information society services)” substitute “ , 72A (information society services) and 72AA (managers of UCITS and AIFs) ”.

(7) In articles 24 , 36(1) , 39C and 55(1) (other exclusions), for “and article 72D (large risks contracts where risk situated outside the EEA)” substitute “ , article 72AA (managers of UCITS and AIFs) and article 72D (large risks contracts where risk situated outside the EEA) ”.

(8) In article 36(3) (other exclusions) , for “the exclusion in article 72 (overseas persons)” substitute “ the exclusions in articles 72 (overseas persons) and 72AA (managers of UCITS and AIFs) ”.

(9) In articles 39 and 44 (other exclusions) , for “and 72C (provisions of information about contracts of insurance on an incidental basis)” substitute “ , 72AA (managers of UCITS and AIFs) and 72C (provisions of information about contracts of insurance on an incidental basis) ”.

(10) After article 42 (introductions to qualifying custodians), insert—

(42A) A person does not carry on an activity of the kind specified by article 40 if the person carries on the activity in relation to— (a) a UCITS, and the person has a Part 4A permission to carry on the activity specified in article 51ZB in respect of that UCITS; or (b) an AIF, and the person has a Part 4A permission to carry on the activity specified in article 51ZD in respect of that AIF.

(11) In the heading of Chapter 10 (collective investment schemes) omit ‘schemes’.

(12) For article 51 (establishing etc. a collective investment scheme) and the cross-heading following it, substitute—

(51ZA) (1) Managing a UCITS is a specified kind of activity. (2) A person manages a UCITS when the person carries on collective portfolio management of the UCITS within the meaning of the UCITS directive, which includes the functions referred to in Annex 2 to that directive (the text of which is set out in Schedule 6) in relation to a UCITS. (3) If a person manages a UCITS and also carries on other activities in connection with or for the purposes of the management of that UCITS, such other activities are also included in the activity specified in paragraph (1). (51ZB) (1) Acting as— (a) the trustee of an authorised unit trust scheme, or (b) the depositary of an open-ended investment company or authorised contractual scheme, where the scheme or company is a UCITS, is a specified kind of activity. (2) In paragraph (1), “authorised contractual scheme”, “authorised unit trust scheme”, “trustee” and “depositary” have the meanings given by section 237 of the Act (other definitions). (51ZC) (1) Managing an AIF is a specified kind of activity. (2) A person manages an AIF when the person performs at least risk management or portfolio management for the AIF. (3) A person does not manage an AIF if the functions they perform for the AIF have been delegated to it by another person, provided that such other person is not an AIFM that has delegated such functions to the extent that it is a letter-box entity. (4) Paragraph (5) applies if a person manages an AIF, and also carries on— (a) one or more of the additional activities listed in paragraph 2 of Annex 1 to the alternative investment fund managers directive (the text of which is set out in Schedule 7) for that AIF; or (b) one or more other activities in connection with or for the purposes of the management of that AIF. (5) The additional or other activities are included in the activity specified in paragraph (1). (6) Any expression used in this article which is not defined in this Order and is used in the alternative investment fund managers directive has the same meaning as in that directive. (51ZD) (1) Acting as— (a) the depositary of an AIF falling within paragraph (2), (b) the trustee of an authorised unit trust scheme which is an AIF that does not fall within paragraph (2), or (c) the depositary of an open-ended investment company or authorised contractual scheme which is an AIF that does not fall within paragraph (2), is a specified kind of activity. (2) An AIF falls within this paragraph if it is— (a) an AIF managed by a full-scope UK AIFM; or (b) a UK AIF managed by an EEA AIFM. (3) In paragraph (1)(a) “depositary” means— (a) a person appointed in compliance with the requirement for the AIFM to appoint a depositary at Article 21.1 of the alternative investment fund managers directive; or (b) an Article 36 custodian as defined in regulation 57(5)(a) of the Alternative Investment Fund Managers Regulations 2013. (4) In paragraph (1)(b) “authorised unit trust scheme” and “trustee” have the meanings given by section 237 of the Act. (5) In paragraph (1)(c) “authorised contractual scheme” and “depositary” have the meanings given by section 237 of the Act. (6) Until 22nd July 2017, an AIF also falls within paragraph (2) if the FCA or an authority in another EEA State has permitted a person with its registered office or a branch in the United Kingdom to be appointed as a depositary of the AIF in accordance with Article 61.5 of the alternative investment fund managers directive. (51ZE) Establishing, operating or winding up a collective investment scheme is a specified kind of activity. (51ZF) There is excluded from article 51ZC the activity of managing an AIF if the person carrying on the activity is listed or described in Schedule 8. (51ZG) (1) A person does not carry on an activity of the kind specified by article 51ZE if the person carries on the activity— (a) in relation to a UCITS, and— (i) at the time the person carries on the activity, the UCITS is managed by a person with a Part 4A permission to carry on the activity specified by article 51ZA in respect of that UCITS; or (ii) no more than the permitted period has passed since the UCITS was managed by a person with such a Part 4A permission; or (b) in relation to an AIF, and— (i) at the time the person carries on the activity, the AIF is managed by— (aa) a person with a Part 4A permission to carry on the activity specified by article 51ZC in respect of that AIF; or (bb) a person registered as a small registered UK AIFM because the conditions in regulation 10(4) of the Alternative Investment Fund Managers Regulations 2013 are met in respect of that AIF; or (ii) no more than the permitted period has passed since the AIF was managed by a person with such a Part 4A permission or registration. (2) In this article “the permitted period” means a period calculated as follows— (a) subject to sub-paragraphs (b) and (c), the period is 30 days; (b) if, before the end of the period, the FCA receives notice of the action being taken to appoint a person with a Part 4A permission or registration to manage the UCITS or AIF, the period is extended by a further 30 days, and may be so extended a second time; (c) if, before the end of the period calculated in accordance with sub-paragraphs (a) and (b), the FCA receives notice of a proposal in respect of the UCITS or AIF for a new manager under section 251(3) of the Act, a new operator under section 261Q(5) of the Act or a new director under regulation 21(1)(e) of the Open-Ended Investment Company Regulations 2001, the period is further extended until the earlier of— (i) the date on which the FCA gives written notice of its approval to the proposal; (ii) the date on which the FCA gives a decision notice refusing the proposal; or (iii) one month after the date on which notice of the proposal was given.

(13) In article 51A (information society services) , for “Article 51 is” substitute “ Articles 51ZA, 51ZB, 51ZC, 51ZD, and 51ZE are also ”.

(14) In articles 64 (agreeing to carry on specified kinds of activity) , 68(1) and (3)(b)(ii) (activities carried on in connection with the sale of goods or supply of services) and 69(2)(b)(ii) (groups and joint enterprises), for “51”, substitute “ 51ZA, 51ZB, 51ZC, 51ZD, 51ZE ”.

(15) In article 72E(5) (Business Angel-led Enterprise Capital Funds) , for “51(1)(a)” substitute “ 51ZA, 51ZC or 51ZE ”.

(16) After article 72A (information society services) , insert—

(72AA) (1) This article applies to a person with a Part 4A permission to carry on the activity of the kind specified by article 51ZA or 51ZC. (2) Activities carried on by the person in connection with or for the purposes of managing a UCITS or, as the case may be, managing an AIF, are excluded from the activities specified by this Part, other than the activities mentioned in paragraph (1).

(17) After Schedule 5 (specified benchmarks) insert—

SCHEDULE 6 (1) Investment management. (2) Administration— (a) legal and fund management accounting services; (b) customer inquiries; (c) valuation and pricing (including tax returns); (d) regulatory compliance monitoring; (e) maintenance of unit-holder register; (f) distribution of income; (g) unit issues and redemptions; (h) contract settlements (including certificate dispatch); (i) record keeping. (3) Marketing. SCHEDULE 7 (a) Administration— (i) legal and fund management accounting services; (ii) customer inquiries; (iii) valuation and pricing, including tax returns; (iv) regulatory compliance monitoring; (v) maintenance of unit-/shareholder register; (vi) distribution of income; (vii) unit/shares issues and redemptions; (viii) contract settlements, including certificate dispatch; (ix) record keeping: (b) Marketing; (c) Activities related to the assets of AIFs, namely services necessary to meet the fiduciary duties of the AIFM, facilities management, real estate administration activities, advice to undertakings on capital structure, industrial strategy and related matters, advice and services related to mergers and the purchase of undertakings and other services connected to the management of the AIF and the companies and other assets in which it has invested. SCHEDULE 8 (1) Any expression used in this Schedule which is used in the alternative investment fund managers directive has the same meaning as in that directive. (2) A small registered UK AIFM, in respect of the AIFs managed by it by virtue of which it is entitled to be registered as a small registered UK AIFM (but not in respect of any other AIFs managed by it). (3) An AIFM in so far as it manages one or more AIFs whose only investors are— (a) the AIFM, (b) the parent undertakings of the AIFM, (c) the subsidiaries of the AIFM, or (d) other subsidiaries of those parent undertakings, provided that none of the investors is an AIF. (4) An institution for occupational retirement provision which falls within the scope of Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision , including, where applicable, the authorised entities responsible for managing such institutions and acting on their behalf referred to in Article 2.1 of that directive, or the investment managers appointed pursuant to Article 19.1 of that directive, in so far as they do not manage AIFs. (5) The European Central Bank, the European Investment Bank, the European Investment Fund, a bilateral development bank, the World Bank, the International Monetary Fund, any other supranational institution or similar international organisation, or a European Development Finance Institution, in the event that such institution or organisation manages AIFs and in so far as those AIFs act in the public interest. (6) A national central bank. (7) A national, regional or local government or body or other institution which manages funds supporting social security and pension systems. (8) A holding company. (9) An employee participation scheme or employee savings scheme. (10) A securitisation special purpose entity. (11) An AIFM, the registered office of which is not in an EEA State.

PART 2 — Amendments to other secondary legislation

Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975

2

(1) The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 is amended as follows.

(2) In article 2(1), in the definition of “relevant collective investment scheme” omit “, 270 (schemes authorised in designated countries or territories)”.

(3) In article 4(1)(d)(ix)—

(a) omit the words from the beginning to “that section or”; and

(b) for “that Act” substitute “ the 2000 Act ”.

Companies (No. 2) (Northern Ireland) Order 1990

3

In article 98(8) of the Companies (No. 2) (Northern Ireland) Order 1990 (power to make provision about certain other charges) after sub-paragraph (e) omit “or” and insert—

(ea) managing a UCITS; (eb) acting as trustee or depositary of a UCITS; (ec) managing an AIF; (ed) acting as trustee or depositary of an AIF; or

Individual Savings Account Regulations 1998

4

In regulation 2(1)(b) of the Individual Savings Account Regulations 1998 (interpretation), in paragraph (b) of the definition of “non-UCITS retail scheme” omit “270 or”.

Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001

5

(1) The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 is amended as follows.

(2) In article 2(1) (interpretation) in the definition of “relevant scheme activities” for “the activity specified by article 51” substitute “ any activity specified by article 51ZA, 51ZB, 51ZD or 51ZE ”.

(3) In article 16 (communications required or authorised by enactments)—

(a) renumber the text of the article as paragraph (1) of the article;

(b) after that paragraph insert—

(2) A communication which may be made because a condition imposed by regulation 49 or 50 of the Alternative Investment Fund Managers Regulations 2013 has been met, is to be treated as authorised by those Regulations for the purposes of paragraph (1) in so far as it is made to a professional investor (as defined in regulation 2(1) of those Regulations). (3) A communication permitted by Article 2.2, 4 or 14.3 of Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds, or by Article 2.2, 4 or 15.3 of Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds, is to be treated as authorised by another enactment for the purposes of paragraph (1).

Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001

6

In paragraph 5(2)(a) of the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (arrangements not amounting to a collective investment scheme) for “51 (establishing etc. a collective investment scheme)” substitute “ 51ZA (managing a UCITS), 51ZB (acting as trustee or depositary of a UCITS), 51ZC (managing an AIF), 51ZD (acting as trustee or depositary of an AIF), 51ZE (establishing etc. collective investment scheme) ”.

Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001

7

For article 3(2)(g) of the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (investment business), substitute—

(ga) article 51ZA (managing a UCITS); (gb) article 51ZB (acting as a trustee or depositary of a UCITS); (gc) article 51ZC (managing an AIF); (gd) article 51ZD (acting as a trustee or depositary of an AIF); (ge) article 51ZE (establishing etc. a collective investment scheme);

Financial Services and Markets Act 2000 (Exemption) Order 2001

8

(1) The Financial Services and Markets Act 2000 (Exemption) Order 2001 is amended as follows.

(2) For article 5(1)(g) (persons exempt in respect of particular regulated activities) substitute—

(ga) article 51ZA (managing a UCITS); (gb) article 51ZB (acting as a trustee or depositary of a UCITS); (gc) article 51ZC (managing an AIF); (gd) article 51ZD (acting as a trustee or depositary of an AIF); (ge) article 51ZE (establishing etc. a collective investment scheme);

(3) In paragraphs 44(1) and (2) and 45 of the Schedule (persons exempt in respect of particular regulated activities – charities and schemes established under the Trustee Investments Act 1961) for “article 51 of the Regulated Activities Order (establishing etc. a collective investment scheme)” substitute “ articles 51ZA to 51ZE of the Regulated Activities Order (managing or acting as trustee or depositary of a UCITS or an AIF, or establishing etc. a collective investment scheme) ”.

Financial Services and Markets Act 2000 (Professions) (Non-Exempt Activities) Order 2001

9

For article 4(d) of the Financial Services and Markets Act 2000 (Professions) (Non-Exempt Activities) Order 2001 , substitute—

(da) article 51ZA (managing a UCITS); (db) article 51ZB (acting as a trustee or depositary of a UCITS); (dc) article 51ZC (managing an AIF); (dd) article 51ZD (acting as a trustee or depositary of an AIF); (de) article 51ZE (establishing etc. a collective investment scheme);

Open-Ended Investment Companies Regulations 2001

10

(1) The Open-Ended Investment Companies Regulations 2001 are amended as follows.

(2) In regulation 15 (requirements for authorisation)—

(a) for paragraph (6) substitute—

(6) If the company has only one director, that director must be a body corporate which is an authorised person and which has a Part 4A permission to carry on the regulated activity of managing a UCITS or, as the case may be, managing an AIF.

(b) in paragraph (8)(e) after “the depositary of an open-ended investment company” insert “ that is a UCITS or, as the case may be, of an open-ended investment company that is an AIF ”.

(3) In regulation 62(3) (exemptions from liability to be void), for “This regulation” substitute “ Except in the case of the depositary of an AIF (as to which see regulations 29 to 32 of the Alternative Investment Fund Managers Regulations 2013), this regulation ”.

Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001

11

(1) The Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001 are amended as follows.

(2) In regulation 1(2) (interpretation) in the appropriate places insert—

“authorised contractual scheme” has the meaning given at section 237(3) of the Act;

“authorised open-ended investment company” has the meaning given at section 237(3) of the Act;

“authorised unit trust scheme” has the meaning given at section 237(3) of the Act;

“relevant AIFM” means an EEA firm falling within paragraph 5(h) of Schedule 3 to the Act which— 1. is authorised by its home state regulator to provide services specified by Annex I to the alternative investment fund managers directive; and 2. is providing those services, or services specified by Article 6.4 of that directive (discretionary portfolio management and non-core services), in the United Kingdom;

“UK AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.

(3) In regulation 2 (persons not to be regarded as relevant persons)—

(a) omit “and” after sub-paragraph (1)(c);

(b) after sub-paragraph (1)(d) insert—

; and (e) any relevant AIFM.

(4) A relevant AIFM is prescribed in relation to all authorised activities other than any services specified by Annex I to the alternative investment fund managers directive provided in respect of an authorised unit trust scheme, an authorised contractual scheme or an authorised open-ended investment company.

(4) In regulation 3(1) (persons who may elect to participate)—

(a) omit “and” after sub-paragraph (b);

(b) after sub-paragraph (c) insert—

; and (d) any relevant AIFM which has established a branch in the United Kingdom in exercise of an EEA right to the extent that it— (i) provides services specified by Annex I to the alternative fund managers directive in respect of a UK AIF which is not an authorised unit trust scheme, an authorised contractual scheme or an authorised open-ended investment company, unless the relevant AIFM is a member of another investor-compensation scheme which affords investors protection which equals or exceeds that provided by the Financial Services Compensation Scheme; or (ii) provides services specified in Article 6.4 of the alternative investment fund managers directive (discretionary portfolio management and non-core services), and is a member of a home State investor-compensation scheme which meets the condition in paragraph (2);

(5) In regulation 4 (persons in respect of whom inspection under section 224 does not apply)—

(a) omit “and” after paragraph (c);

(b) after paragraph (d) insert—

; and (e) any relevant AIFM to the extent that it provided services in the United Kingdom other than services specified by Annex I to the alternative investment fund managers directive that were provided in respect of an authorised unit trust scheme, an authorised contractual scheme or an authorised open-ended investment company.

Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001

12

(1) The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 are amended as follows.

(2) In regulation 2 (interpretation), in the definition of “single market restrictions”, after paragraph (g) insert—

(ga) articles 47.2, 47.3, 51, 52 and 53.2 of the alternative investment fund managers directive;

(3) In regulation 9 (disclosure by regulators or regulator workers to certain other persons)—

(a) for paragraph (2) for the words from “the disclosure is provided for” to the end substitute “ the condition in paragraph (2ZA) is met or the conditions in (2B) are met. ”;

(b) after paragraph (2) insert—

(2ZA) The condition in this paragraph is that the disclosure is provided for by a cooperation agreement of the kind referred to in— (a) article 63 of the markets in financial instruments directive; (b) article 46 of the banking consolidation directive; (c) article 16.3 of the life assurance consolidation directive; (d) article 16.3 of the non- life assurance directive; (e) article 102.3 of the UCITS directive; or (f) article 26 of the reinsurance directive.

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