Section 283A: Master-feeder structures, Financial Services and Markets Act 2000

The operator of a UKUCITS may not invest a higher proportion of the property which is subject to the collective investment scheme constituted by that UCITS in units of another UCITS than is permitted by rule 5.2.11(9) of the Collective Investment Schemes sourcebook unless the investment is approved by the FCA in accordance with this section.

An application for approval under subsection (1) of an investment must be made by the operator of the UKUCITS in such manner, and accompanied by such information, as is required by rules made by the FCA.

The FCA must grant an application made under subsection (2) if it is satisfied—

that the UK UCITS, its operator, trustee or depositary and auditor and the UCITS in which it proposes to invest, and its operator, have complied with—

the requirements laid down in the Chapter 8 provisions, and

any other requirements imposed by the FCA in relation to the application;

in a case where the application is made by the operator of a feeder UCITS in respect of the investment of the proceeds of the winding-up of its master UCITS, that the proceeds of the winding up are to be paid to the feeder UCITS before the date on which the investment is to be made.

In subsection (3)(a)(i) "the Chapter 8 provisions" means—

in relation to a UK UCITS or its operator, trustee or depositary, or auditor, any provision made by or under an enactment in implementation of Chapter 8 of the UCITS directive, and

in relation to an EEA UCITS or its operator, Chapter 8 of the UCITS directive.

In a case within subsection (3)(b), approval must be subject to the conditions in subsections (5) and (6).

The first condition is that the feeder UCITS is to receive the proceeds of the winding-up—

in cash; or

wholly or partly in assets other than cash in a case where the feeder UCITS so elects and each of the following so permits—

the decision of the master UCITS that it should be wound up;

the trust deed , contractual scheme deed or instrument of incorporation of the feeder UCITS; and

either the agreement between the feeder UCITS and its master UCITS, or the internal conduct of business rules operated by the feeder UCITS and the master UCITS in accordance with rules made by the FCA.

The second condition is that cash received by the feeder UCITS in accordance with paragraph (5)(a) may not be reinvested before the date on which the feeder UCITS proposes to invest in the new UCITS, except for the purpose of efficient cash management.

The FCA must, within 15 working days of the date on which the FCA had received all the information required in relation to the application, give written notice to the operator—

that the FCA approves its application, or

that the FCA objects to the application.

Following receipt of notice that the FCA objects to the application, the operator may refer the FCA's decision to the Tribunal.

Section 283A: Master-feeder structures

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