Introduction
On 14 May 2024, the UK Government released official Regulations confirming its equivalence decisions regarding EEA states under the UK's Overseas Funds Regime (OFR). An explanatory memorandum, providing further clarification, accompanied the Regulations The Regulations take effect on 16 July 2024.
Background
In January 2024, the UK Government declared all EEA states (which include the EU's 27 Member States plus Iceland, Liechtenstein, and Norway) equivalent under the OFR concerning UCITS schemes (whether umbrella or standalone), excluding Money Market Funds (MMFs).
For further details please see our previous article.
What is the OFR in UK?
The OFR provides a simplified process for overseas schemes, such as EEA UCITS, to seek recognition from the Financial Conduct Authority (FCA). This recognition enables these schemes to be marketed to UK retail investors under section 271A of the Financial Services and Markets Act 2000 (FSMA 2000). Applications can be made by scheme operators if the scheme originates from a country approved by HM Treasury (HMT) and is of a specified type for that country. The publication of these Regulations is positive news, ensuring that EEA UCITS, excluding MMFs, can continue marketing in the UK without disruption. This follows their transition from the “Temporary Marketing Permission Regime” to formal recognition under the OFR.
A roadmap was issued on 1 May 2024 by the FCA and HM Treasury to explain the OFR.
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