FCA Obligations of Small Registered UK Property AIFMs
This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The obligations of Small Registered UK AIFMs to the Financial Conduct Authority ("FCA") are summarised below. The obligations are imposed primarily by the Alternative Investment Fund Managers Regulations 2013 ("Regulations") and the FCA Handbook.
Registration as a Small Registered UK AIFM does not accord regulated firm status or grant exemption for other regulated activities under the Financial Services and Markets Act 2000 ("FSMA"). Small Registered UK AIFMs must still ensure that they do not carry out regulated activities under FSMA and comply with other applicable FSMA obligations, such as restrictions on financial promotions and penalties for misleading statements.
1. NOTIFICATION TO THE FCA OF CHANGES FROM FCA APPLICATION FORM
The FCA Application Form for registration as a Small Registered UK AIFM contains on the signature page a personal undertaking to notify the FCA immediately if there is a significant change to the information given in the application pack.
2. ONGOING REPORTING REQUIREMENTS
2.1 Regulation 21 of the Regulations obliges Small Registered UK AIFMs to provide the FCA with such information as the FCA may direct on (a) the main instruments in which the AIFM trades, and (b) the principal exposures and most important concentrations of the AIFs that it manages.
2.2 Only certain elements of the FCA Handbook apply to Small Registered UK AIFMs, essentially reporting requirements. However. the restriction in the Regulations on the FCA applying its wider rules to Small Registered UK AIFMs expires on 22nd July 2015 so this may change.
2.3 SUP 15.3.30 of the FCA Handbook deals with general reporting requirements of Small Registered UK AIFMs: A small registered UK AIFM must notify the FCA of changes in the following manner:
2.3.1 for the management of a new AIF or a new investment compartment of an AIF, (reporting immediately after taking it on) by using the form in SUP 15 Annex 6A R; (save where the management of the new AIF or investment compartment would result in the AIFM exceeding the relevant threshold of assets under management);
2.3.2 if it no longer meets the conditions in regulation 9 of the Regulations (meaning of "small AIFM"), by using the form in SUP 15 Annex 6D R; and
2.3.3 if it ceases to meet the conditions for registration in regulation 15(1) of the Regulations (small registered AIFMs ceasing to meet the requirements for registration), or proceedings begin against an individual responsible for the operation or management of the AIFM for a disqualification order or disqualification undertaking under the Company Directors Disqualification Act 1986 by using the form in SUP 15 Annex 6E D.
A link to these FCA forms is in SUP 15 Annex 6 of the FCA Handbook.
2.4 Annual reporting obligations are in SUP 16.18.7 of the FCA Handbook: Initially, small Registered UK AIFMs must report annually and reporting periods must end on 31 December in each calendar year. The first reports will be for the period to 31 December 2014.
2.5 The FCA requires reports to be via its Gabriel system using XML v1.1. Further details are on the FCA's web page for Reporting. The FCA indicates it plans to keep the process under review and provide firms with information on how to access Gabriel.
2.6 Small Registered UK AIFMs were due to be given access to GABRIEL transparency reporting during November 2014, with the FCA issuing a unique GABRIEL registration code to the AIFM by email.
2.7 If an AIFM does not submit reports after receiving a reminder of non-compliance, the FCA may take enforcement action. Ultimately, a Small Registered UK AIFM could have its registration revoked.
2.8 The FCA has prepared a Q&A on reporting requirements.
