Adviser Guides 1hr
Guide to FSA Ucis Ban Implications
In its August consultation paper 12/19, the FSA effectively said that advisers can no longer recommend unregistered collective investment schemes (Ucis) to ordinary retail investors, meaning they can only be marketed to wealthier, sophisticated investors.
As well as possible implications for Sipps providers, products such as more complex Enterprise Investment Schemes and Venture Capital Trust schemes may be covered under the scope of these rules, with the regulatory net thrown over a wider number of “non-mainstream pooled investments”.
So, what schemes come under the Ucis umbrella, should advisers avoid these products altogether (particularly with independence requirements under RDR), what should be done about existing Ucis investors, and what can advisers now recommend and to whom?
Answers provided by Judith Wright, compliance consultant at the Consulting Consortium, and Daniel Tunkel, financial regulation and funds partner at Howard Kennedy.
IN THIS GUIDE
Ucis are collective investment schemes which are not authorised and regulated in the UK but can still be sold here.
The variety of investments that come under the Ucis definition is wide and there are regulatory changes afoot.
Promotion of Ucis to the general public in the UK is prohibited by statute and the exceptions are stringent.
The FSA published its 12/19 consultation paper in August proposing to ban the promotion of Ucis and close substitutes to ordinary retail investors.
The FSA’s consultation paper proposes restrictions on who you advise and on certain products.
In light of the anticipated regulatory adjustments, advisers may be concerned about clients who are existing Ucis investors.
The scheme itself is unlikely to be protected, although the operator might be at fault and be liable to the financial ombudsman.