FCA opens consultation on Overseas Funds Regime
The OFR consultation will be open for feedback until 12 February 2024.
The OFR has been designed by parliament to allow foreign funds to be marketed in the UK from jurisdictions deemed to have equivalence to the UK.
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The FCA said the consultation will give global asset managers enough time to prepare for the regime's implementation.
Decisions on equivalence will reside with the UK Government, the regulator explained, although the FCA «may consult» about additional investor protection requirements «following each decision by government».
The FCA has proposed that, in order to be recognised under the OFR, overseas schemes will need to submit key information about their investment objectives and policies, as well as the main categories of assets they invest in.
Investors should also be informed of the types of protections they have, including access to the Financial Ombudsman Service and the Financial Services Compensation Scheme.
If those protections are not available to retail investors, the funds will have an obligation to specify this to «help consumers make informed decisions about which funds best meet their needs», the FCA explained.
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The consultation follows a recent investigation by Investment Week, which found the introduction of Consumer Duty has been putting global asset managers under compliance pressure and at risk of regulatory divergence, which could see many exit the UK retail market.
Sarah Pritchard, executive director of markets at the FCA, said: «We want to balance making the transition into the new regime as smooth as
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