UCITS passporting in the United Kingdom

Following the UK’s departure from the EU, overseas funds could market to UK retail customers either by utilising the Temporary Marketing Permissions Regime (“TMPR”) (which was applicable to certain existing EEA UCITS) or by applying for ‘individual recognition’ under section 272 of the Financial Services and Markets Act 2000.

The Overseas Funds Regime (OFR) was subsequently introduced with the aim of providing a more streamlined mechanism for marketing overseas funds to UK-retail investors. The OFR is available to overseas funds that are deemed by the UK Government as providing equivalent consumer protection to UK authorised funds. The first formal equivalence decision was made by the UK Government on 16 July 2024, recognising EEA UCITS (except money market funds) as “equivalent” to UK authorised funds under the OFR.

EEA UCITS which are currently marketed to UK-retail customers under the TMPR are required to apply for recognition under the OFR (via the My FCA System) to continue to be marketed to UK-retail investors. Operators of such funds must apply within a three-month ‘landing slot’ allocated by the FCA. The TMPR has been extended to 31 December 2026 to ensure the smooth transition from the TMPR to the OFR. The window for new EEA UCITS (not registered under the TMPR) to apply for recognition via the OFR gateway without the need for a ‘landing slot’ closed 30 September 2024.  

The operator of an EEA UCITS must complete an application form online using the My FCA system and pay a one-off application fee.

It is important to check the fund name(s) before making any OFR recognition application in case it is the same or similar to that of a UK authorised fund. This will not automatically result in exclusion; however, it can be a ground for rejection. The overseas operator must demonstrate to the FCA that they have taken reasonable steps to ensure that the UK distribution channels will make each fund’s domicile sufficiently clear to reduce the risk of investor confusion. Having different ID (ISIN) numbers for the funds is not enough, further steps must be taken.

The FCA has two-months to approve or reject each application. If the application is approved, the operator can market to UK retail investors immediately.

The following documents must be submitted alongside the application:

1. The latest Prospectus
2. Instrument constituting the fund
3. The latest annual report and (if more recent) the half-yearly report
4. Key Investor Information Document (KIID)
5. Portfolio Statement for the Fund(s)

The OFR Gateway opening dates for applications are: 

1. For non-TMPR EEA UCITS funds, applications opened on 30 September 2024.
2. For TMPR stand-alone EEA UCITS funds, ‘landing slots’ for applying were assigned from October 2024, in alphabetical order by operator name.
3. For TMPR umbrella EEA UCITS funds, ‘landing slots’ for applying were assigned from November 2024, in alphabetical order by operator name.

As regards TMPR stand-alone and umbrella EEA UCITS, landing slots for applications are open for three-months. If an application is not submitted during the landing slot, the fund will be removed from the TMPR; this would result in the EEA UCITS no longer being able to be marketed in the UK to retail investors.

During the landing slot window:

1. The FCA cannot consider any change of operator until the application for recognition has been processed.
2. EEA UCITS umbrella funds that are in the TMPR can only add additional sub-funds (provided those sub-funds were authorised before 31 December 2020) up to two weeks before the start of the landing slot.

After being approved under the OFR:

1. An umbrella fund may add new sub-funds, including sub-funds not in the TMPR.
2. All operators of recognised funds must notify the FCA of certain subsequent changes affecting the fund’s status as soon as reasonably practicable following home state regulator approval or, if no home state regulator approval is required, after the decision to implement a change. Some changes must be notified via the My FCA system and others by email.
3. The list of changes and events which require notification includes: changes to fund features, including its name, investment objective, or the firm that is approving its financial promotions, its termination and events that affect the fund such as supervisory sanctions imposed on the operator or a suspension of dealing.

Unlike under the TMPR, where fund operators are deemed to be “authorised persons” and can communicate financial promotions, the OFR requires financial promotions to be communicated or approved by a UK authorised firm (unless an exemption under the Financial Promotion Order applies). This will require operators of EAA UCITS to carry out due diligence over any FCA authorised firms, who are engaged to approve financial promotions, have the necessary FCA permissions to do so. 

Moreover, the prospectus of an OFR recognised scheme must contain disclosures regarding whether consumer redress schemes are available in the UK and overseas. Investors must be warned if the fund is not covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme. The same warning must be included in financial promotions.

For an application to the OFR, the FCA charges are:

1. £2,790 for a stand-alone fund; and
2. £5,580 for an umbrella fund.

Once a fund is recognised under the OFR, periodic fees are payable to the FCA, aligned with those charged to UK authorised UCITS funds. The table below is from Annex 4 to Chapter 4 of FEES within the FCA Handbook and notes the periodic fees payable for the period 1 April 2025 to 31 March 2026.

The periodic fees payable by an umbrella fund are calculated based on the number of sub-funds it has. However, there are no separate application or other fees at the sub-fund level.