In March 2020, HM Treasury published a Consultation (the “Consultation”) on a proposal for an Overseas Fund Regime (the “proposed OFR”), which will establish a new process to allow investment funds domiciled overseas to access the U.K. market, with the objective of replacing the existing regime. Currently, E.U. funds access the U.K. market under the provisions of Section 264 of the Financial Services and Markets Act 2000 (“FSMA”), whilst the authorisation of non-E.U. funds is governed by section 272 of FSMA. The proposed OFR will establish equivalence regimes for overseas retail funds to come into effect after the U.K.’s withdrawal from the U.K., whereby HM Treasury may grant equivalence to a Third Country (including E.U. Member States) and allow funds domiciled in those countries to market in the U.K.
The FMLC has submitted a response, highlighting uncertainties in respect of the criteria and timing which will apply to assessments under the proposed OFR, the process for a possible withdrawal of equivalence, and other requirements as to reporting and financial promotion.
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