Section 272: Individually recognised overseas schemes., Financial Services and Markets Act 2000

The FCA may, on the application of the operator of a collective investment scheme which—

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

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

does not have the benefit of section 271A, and

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

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

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

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

it falls within a description of schemes specified in the regulations.

Adequate protection must be afforded to participants in the scheme.

The arrangements for the scheme's constitution and management must be adequate.

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

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

any rule of law, and

any matters which are... the subject of rules,

applicable in relation to comparable authorised schemes.

"Comparable authorised schemes" means whichever of the following the FCA considers the most appropriate, having regard to the nature of scheme in respect of which the application is made—

authorised unit trust schemes;

authorised contractual schemes which are co-ownership schemes;

authorised contractual schemes which are partnership schemes;

authorised open-ended investment companies;

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

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

The operator of the scheme must—

if an authorised person, have permission to act as operator;

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

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

if an authorised person, have permission to act as trustee or depositary;

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

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

The name of the scheme must not be undesirable or misleading.

The purposes of the scheme must be reasonably capable of being successfully carried into effect.

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

But a scheme is to be treated as complying with subsection (13) if it requires the operator to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in that subsection.

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

Section 272: Individually recognised overseas schemes.

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