Financial Services and Markets Bill - continued        House of Lords
PART XVII, COLLECTIVE INVESTMENT SCHEMES - continued

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Schemes authorised in designated countries or territories
Schemes authorised in designated countries or territories.     265. - (1) A collective investment scheme which is not a recognised scheme by virtue of section 259 but is managed in, and authorised under the law of, a country or territory outside the United Kingdom is a recognised scheme if-
 
 
    (a) that country or territory is designated for the purposes of this section by an order made by the Treasury;
 
    (b) the scheme is of a class specified by the order;
 
    (c) the operator of the scheme has given written notice to the Authority that he wishes it to be recognised; and
 
    (d) either-
 
      (i) the Authority, by written notice, has given its approval to the scheme's being recognised; or
 
      (ii) two months, beginning with the date on which notice was given under paragraph (c), have expired without the operator receiving a warning notice from the Authority under section 266.
      (2) The Treasury may not make an order designating any country or territory for the purposes of this section unless satisfied-
 
 
    (a) that the law and practice under which relevant collective investment schemes are authorised and supervised in that country or territory affords to investors in the United Kingdom protection at least equivalent to that provided for them by or under this Part in the case of comparable authorised schemes; and
 
    (b) that adequate arrangements exist, or will exist, for co-operation between the authorities of the country or territory responsible for the authorisation and supervision of relevant collective investment schemes and the Authority.
      (3) "Relevant collective investment schemes" means collective investment schemes of the class or classes to be specified by the order.
 
      (4) "Comparable authorised schemes" means whichever of the following the Treasury consider to be the most appropriate, having regard to the class or classes of scheme to be specified by the order-
 
 
    (a) authorised unit trust schemes;
 
    (b) authorised open-ended investment companies;
 
    (c) both such unit trust schemes and such companies.
      (5) If the Treasury are considering whether to make an order designating a country or territory for the purposes of this section-
 
 
    (a) the Treasury must ask the Authority for a report-
 
      (i) on the law and practice of that country or territory in relation to the authorisation and supervision of relevant collective investment schemes,
 
      (ii) on any existing or proposed arrangements for co-operation between it and the authorities responsible in that country or territory for the authorisation and supervision of relevant collective investment schemes,
 
    having regard to the Treasury's need to be satisfied as mentioned in subsection (2);
 
    (b) the Authority must provide the Treasury with such a report; and
 
    (c) the Treasury must have regard to it in deciding whether to make the order.
      (6) The notice to be given by the operator under subsection (1)(c)-
 
 
    (a) must contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act; and
 
    (b) must contain or be accompanied by such information and documents as may be specified by the Authority.
Procedure.     266. - (1) If the Authority proposes to refuse approval of a scheme's being a recognised scheme by virtue of section 265, it must give the operator of the scheme a warning notice.
 
      (2) To be valid the warning notice must be received by the operator before the end of two months beginning with the date on which notice was given under section 265(1)(c).
 
      (3) If, having given a warning notice, the Authority decides to refuse approval-
 
 
    (a) it must give the operator of the scheme a decision notice; and
 
    (b) the operator may refer the matter to the Tribunal.
 
Individually recognised overseas schemes
Individually recognised overseas schemes.     267. - (1) The Authority may, on the application of the operator of a collective investment scheme which-
 
 
    (a) is managed in a country or territory outside the United Kingdom,
 
    (b) does not satisfy the requirements prescribed for the purposes of section 259,
 
    (c) is not managed in a country or territory designated for the purposes of section 265 or, if it is so managed, is of a class not specified by the designation order, and
 
    (d) appears to the Authority to satisfy the requirements set out in the following provisions of this section,
       make an order declaring the scheme to be a recognised scheme.
 
      (2) Adequate protection must be afforded to participants in the scheme.
 
      (3) The arrangements for the scheme's constitution and management must be adequate.
 
      (4) The powers and duties of the operator and, if the scheme has a trustee or depositary, of the trustee or depositary must be adequate.
 
      (5) In deciding whether the matters mentioned in subsection (3) or (4) are adequate, the Authority must have regard to-
 
 
    (a) any rule of law, and
 
    (b) any matters which are, or could be, the subject of rules,
       applicable in relation to comparable authorised schemes.
 
      (6) "Comparable authorised schemes" means whichever of the following the Authority considers the most appropriate, having regard to the nature of scheme in respect of which the application is made-
 
 
    (a) authorised unit trust schemes;
 
    (b) authorised open-ended investment companies;
 
    (c) both such unit trust schemes and such companies.
      (7) The scheme must take the form of an open-ended investment company or (if it does not take that form) the operator must be a body corporate.
 
      (8) The operator of the scheme must-
 
 
    (a) if an authorised person, have permission to act as operator;
 
    (b) if not an authorised person, be a fit and proper person to act as operator.
      (9) The trustee or depositary (if any) of the scheme must-
 
 
    (a) if an authorised person, have permission to act as trustee or depositary;
 
    (b) if not an authorised person, be a fit and proper person to act as trustee or depositary.
      (10) The operator and the trustee or depositary (if any) of the scheme must be able and willing to co-operate with the Authority by the sharing of information and in other ways.
 
      (11) The name of the scheme must not be undesirable or misleading.
 
      (12) The purposes of the scheme must be reasonably capable of being successfully carried into effect.
 
      (13) The participants must be entitled to have their units redeemed in accordance with the scheme at a price related to the net value of the property to which the units relate and determined in accordance with the scheme.
 
      (14) But a scheme is to be treated as complying with subsection (13) if it requires the operator to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in that subsection.
 
      (15) Subsection (13) is not to be read as imposing a requirement that the participants must be entitled to have their units redeemed (or sold as mentioned in subsection (14)) immediately following a demand to that effect.
 
Matters that may be taken into account.     268. For the purposes of subsections (8)(b) and (9)(b) of section 267, the Authority may take into account any matter relating to-
 
 
    (a) any person who is or will be employed by or associated with the operator, trustee or depositary in connection with the scheme;
 
    (b) any director of the operator, trustee or depositary;
 
    (c) any person exercising influence over the operator, trustee or depositary;
 
    (d) any body corporate in the same group as the operator, trustee or depositary;
 
    (e) any director of any such body corporate;
 
    (f) any person exercising influence over any such body corporate.
Applications for recognition of individual schemes.     269. - (1) An application under section 267 for an order declaring a scheme to be a recognised scheme must be made to the Authority by the operator of the scheme.
 
      (2) The application-
 
 
    (a) must be made in such manner as the Authority may direct;
 
    (b) must contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act;
 
    (c) must contain or be accompanied by such information as the Authority may reasonably require for the purpose of determining the application.
      (3) At any time after receiving an application and before determining it, the Authority may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.
 
      (4) Different directions may be given, and different requirements imposed, in relation to different applications.
 
      (5) The Authority may require an applicant to present information which he is required to give under this section in such form, or to verify it in such a way, as the Authority may direct.
 
 
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