June 13, 2021

Volume XI, Number 164

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June 10, 2021

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FCA Update: New Authorized Fund Regime, RegData Data Collection Platform

FCA Consults on New Authorized Fund Regime for Investing in Long-Term Assets

On May 7, the Financial Conduct Authority (FCA) published a consultation paper on a new UK-authorized fund regime for investing in long-term assets (CP21/12). These assets are often called productive finance and include venture capital, private equity, private debt, real estate and infrastructure investments.

The FCA proposes a new category of open-ended fund called a long-term asset fund (LTAF). A new chapter in the Collective Investment Schemes sourcebook will contain LTAFs rules. Authorized fund managers will also need to comply with rules in other sourcebooks, including PRIN, FUND, COBS and SYSC.

LTAFs will be alternative investment funds (AIFs). They may make investments in complex and risky assets, which means that their managers will need to have appropriate resources as well as good systems and controls. Therefore, the FCA proposes to require that only firms that are authorized as full-scope UK alternative investment fund managers (AIFMs) can manage LTAFs.

The FCA’s proposed LTAF framework is principles-based, and it does not propose to set many detailed rules. LTAFs will facilitate investment through a UK-authorized fund in assets that are less liquid and potentially higher risk than assets that are available for mainstream retail funds.

Pending feedback, the FCA initially proposes to restrict the LTAFs distribution to professional investors and sophisticated retail investors. However, the proposed rules enable wider distribution if the FCA subsequently decides that this would be appropriate.

The FCA plans to enable LTAFs to invest in a range of long-term illiquid assets, with few restrictions on eligible investments. It proposes additional disclosures to help potential investors understand the management of the fund and explain its important features.

The FCA also proposes to amend the permitted links rules in COBS 21.3 to allow defined contribution pension schemes to invest in LTAFs.

Appendix 1 to CP21/12 contains the draft Long-Term Asset Fund Instrument 2021, which will amend the relevant rule.

CP21/12 closes on June 25. The FCA plans to publish a policy statement and final rules later in 2021.

CP21/12.

FCA Replaces Data Collection Platform Gabriel With RegData

On May 11, the Financial Conduct Authority (FCA) updated its webpage announcing the replacement of Gabriel, its data collection platform for gathering regulatory data from firms.

The FCA confirmed that Gabriel has been replaced by its new platform, RegData, which is intended to be faster and easier to use and built with flexible technology. RegData is also intended to fix issues more quickly and make ongoing improvements to user experience.

The FCA webpage announcing the replacement of Gabriel.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 134
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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