On 17 July 2024, the FCA published its Policy Statement on implementing the Overseas Funds Regime (OFR) (PS24/7), containing the hotly anticipated final rules and guidance for the OFR.
The rules become effective on 31 July 2024. At present, only EEA UCITS have been determined to be equivalent and therefore eligible for the OFR. EEA money market funds are currently under review. In its Policy Statement, the FCA responds to feedback received on its consultation paper published back in December 2023 (CP23/26).
The FCA has adjusted some of its proposals, originally set out in CP23/26, in light of feedback received, including:
- removal of the proposed 30-day period between notifying the FCA of changes to OFR funds and when those changes could take effect in the UK;
- further clarification as to which categories of fund changes should be notified to the FCA (although none of the consulted-on changes requiring notification have been removed);
- guidance relating to additional information in disclosures for fund prospectus and point of sale information; and
- clarification of which UK fund prospectus requirements apply to OFR funds. The FCA has taken onboard concerns about cutting across Home State prospectus requirements and amended the original proposal to provide that firms will only be required to ensure fund prospectuses meet UK authorised fund prospectuses requirements to the extent this information would be compatible with the basis upon which the prospectus is approved in its Home State.
What hasn't changed from the Consultation Paper? Critically, the information that will need to be submitted by a management company about each scheme applying under the OFR.
Managers of EEA UCITS are now able to commence their OFR transition planning with clarity of the initial application requirements, disclosure expectations, and application fees, as well as ongoing notification expectations. Please contact us if you have any queries.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.