UK: The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019

The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 were made earlier this week: see here or here (pdf). Regulations 50(6), 58 and 61 to 71 are now in force; the remaining regulations come into force on exit day. The Regulations are accompanied by an explanatory memorandum and an impact assessment: see, respectively, here (pdf) and here (pdf). To quote directly from the explanatory memorandum (paras. 2.2 and 2.3):

A collective investment scheme is a fund that several people contribute to. It is managed by a fund manager who will invest the pooled money into one or more types of assets. This instrument will continue the standards as set out by the UCITS Directive (2009/65/EC) to maintain common standards for investor protection for UCITS. 

This instrument will also amend the commencement provisions in the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019".

Note: the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 have not yet been made - as far as I can tell - but were published in draft form last year and approved last month: see here.

Update (21 February 2019) - shortly after adding the above note, the UK Legislation website was updated and now includes a copy of the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019: see here. These Regulations were made on the same day as the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019.

Singapore: MAS consults on the introduction of a new corporate structure - the variable capital company

Last month the Monetary Authority of Singapore began a consultation on the legal framework for a new corporate structure for collective investment schemes: the variable capital company. These new companies will have their own legal framework, set out in the Singapore Variable Capital Companies Act, and will have the ability to create sub-funds with segregated assets and liabilities. Directors will be subject to a fit and proper persons test. For further information, see the consultation paper (here, pdf) and the draft Variable Capital Companies Act (here, pdf).

UK: Supreme Court judgment on collective investment schemes

The Supreme Court gave judgment earlier today in Asset Land Investment Plc v The Financial Conduct Authority [2016] UKSC 17 (on appeal from [2014] EWCA Civ 435). The court unanimously held that the arrangements in question, which centred on the selling of individual plots of land at six possible development sites, amounted to the operation of a 'collective investment scheme' within section 235 of the Financial Services and Markets Act 2000, and were therefore regulated activities for the purposes of the general prohibition found in section 19 of the Act. A summary of the judgment, which provided the court with its first opportunity to consider the regulation of collective investment schemes, is available here (pdf). A summary was also delivered before the court by Lord Carnwath: see the video recording below.

UK: Supreme Court judgment next week in collective investment scheme case

Next week, on Wednesday, the Supreme Court will hand down its judgment in Asset Land Investment Plc v The Financial Conduct Authority (on appeal from [2014] EWCA Civ 435), in which the principal question before it was the meaning of 'collective investment scheme' within section 235 of the Financial Services and Markets Act 2000.

UK: Supreme Court to hear appeal this week in collective investment scheme case

Later this week, on Wednesday, the Supreme Court will to hear argument in Asset Land Investment Plc v The Financial Conduct Authority (on appeal from [2014] EWCA Civ 435), in which the principal question will be the meaning of collective investment scheme within section 235 of the Financial Services and Markets Act 2000.

UK: England and Wales: what is a collective investment scheme?

The Court of Appeal gave judgment last week in Financial Conduct Authority v Capital Alternatives Ltd [2015] EWCA Civ 284. At issue was whether several schemes were collective investment schemes within section 235 of the Financial Services and Markets Act 2000. A short summary of the decision, prepared by the ICLR, is available here and this contains the following headnote: "The critical question in deciding whether property was 'managed as a whole' within section 235(3)(b) of the Financial Services and Markets Act 2000 was whether a characteristic feature of the arrangements under the scheme was that the property to which those arrangements related was managed as a whole. Whether that condition was satisfied required an overall assessment and evaluation of the relevant facts".

UK: England and Wales: Court of Appeal considers section 235 definition of 'collective investment scheme'

The Court of Appeal gave judgment last week in Asset Land Investment Plc v The Financial Conduct Authority (FCA) [2014] EWCA Civ 435. This is an important decision on the definition of a collective investment scheme under section 235 of the Financial Services and Markets Act 2000. In particular, the court considered the meaning of 'arrangement' as used in section 235. Lady Justice Gloster (with whom Lady Justice Sharp and Lord Justice Rimer agreed) stated (paras. [50] and [52]):

The authorities demonstrate that, when interpreted together, sections 235(1), (2) and (3) are drafted in such a way as to justify the giving of a very wide meaning to term "arrangements" in section 235(1), which includes understandings and agreements that are not legally binding ... I cannot accept [the] submission that in order for an 'arrangement' to exist, there has to be "a mutual expectation of adherence" to be represented arrangements. The existence of "arrangements" for the purposes of section 235 cannot depend upon what might be an involved investigation into the subjective intentions and expectations of a representor, whose representations have caused investors to reach certain understandings. Such an approach would unduly and illogically restrict the ambit and effect of section 235".

UK: England and Wales: what is a collective investment scheme?

A copy of the judgment Financial Conduct Authority v Capital Alternatives Ltd [2014] EWHC 144 (Ch) was added to the BAILII database yesterday. The trial judge, Mr N Strauss QC (sitting as a deputy judge), held that several investment schemes were collective investment schemes under section 235 of the Financial Services and Markets Act 2000. In doing so he considered several important elements of the section 235 definition including the pooling of profits and "managed as a whole". The latter, he observed, did not require the complete absence of any element of individual management.

IOSCO publishes principles for the regulation of exchange traded funds

The International Organisation of Securities Commissions has published its final report Principles for the Regulation of Exchange Traded Funds: see here (pdf). The principles relate to exchange traded funds that are organised as collective investment schemes and do not cover other exchange traded products.

UK: FCA bans promotion of unregulated collective investment schemes to most retail investors

The Financial Conduct Authority has published rules to ban the promotion of unregulated collective investment schemes and certain close substitutes to most retail investors in the UK: see here. The products within the ban are less extensive than originally proposed. The rules come into force on 1 January 2014 and are published in the FCA's policy statement: see here (pdf). The FCA has also stated that it intends to consult on whether to impose restrictions on the marketing of new types of security including contingent convertibles, building society deferred shares and similar instruments.

UK: England and Wales: land-banking and collective investment schemes

The High Court gave judgment last Friday in Financial Services Authority v Asset L I Inc (t/a Asset Land Investment Inc) [2013] EWHC 178 (Ch). The trial judge held that land-banking schemes were collective investment schemes as defined by section 235 of the Financial Services and Markets Act 2000. The judgment contains some interesting discussion of section 235 including the first part of the definition which refers to "any arrangements" in respect of which the trial judge stated (para. [160]):

"I accept that a (mis)understanding or expectation held by only one person involved in a matter does not amount to an "arrangement" about it. But there can be an "arrangement" without both (or all) parties sharing an intention or expectation (just as a person can make a contract without intending to keep it). The FSA's case, that I have upheld, is not that there would be arrangements if investors simply leapt to their own understanding about their investments or misunderstood what they were being told: it is that the investors' understanding was based, and reasonably based, on what they were told by Asset Land's representatives. Thus, arrangements were made even if Asset Land had no intention of acting in accordance with them and even if their representatives knew this when they made the arrangements. Mr Coppel accepted that a fraudulent scheme can be an arrangement, but explained this on the basis that the parties to it have "mutual expectations", the fraudulent party expecting the innocent party to adhere to it and the innocent party likewise expecting the fraudulent party to do so. I reject that argument; the parties to a fraudulent scheme do not have an arrangement because of such mutual expectations or because of any subjective expectations or intentions, but because of what they have arranged objectively."

Update (13 February 2013): a summary of the case, provided by the ICLR, is available here.