On 15th November 2021, COLL 1.2 regarding types of authorised fund was updated. The update was due to the inclusion of a long-term asset fund.
In COLL 1.2.2, “3A” was added with the following:
(3A) (a) 7A long-term asset fund may be promoted only to:
(i) professional clients; and
(ii) retail clients who are sophisticated investors or certified high net worth investors,
on the same terms as non-mainstream pooled investments.
(b) A long-term asset fund is an AIF and must be managed by a full-scope UK AIFM (see COLL 15.2.2R (Authorised fund manager to be a full-scope UK AIFM)).
(c) Under the Act and the UK AIFM regime, the FCA is able to impose stricter requirements on an AIFM or an AIF marketed to retail clients than the requirements that apply to an AIFmarketed only to professional clients. This sourcebook contains stricter requirements for an AIF which is a long-term asset fund.
(d) A full-scope UK AIFM must also comply with the requirements in FUND and any other applicable provisions of the UK AIFM regime.
(e) A long-term asset fund could change to become a qualified investor scheme, a non-UCITS retail scheme or a UCITS scheme, provided it complies with the necessary conditions. The authorised fund manager of an LTAF may need to make significant changes to the LTAF’s constitution, objectives and investment powers for it to become a UCITS scheme or a non-UCITS retail scheme.
(f) A qualified investor scheme could become authorised as a long-term asset fund if the authorised fund manager operates, or proposes to operate, the scheme in accordance with the rules in COLL 15 (Long-term asset funds).
(g) The nature of the assets that are held (or expected to be held) by a long-term asset fund means that it will not be able to seek authorisation as a regulated money market fund, or to have the characteristics of such a fund without significant changes to its constitution, objectives and investment powers. See also article 6 of the Money Market Funds Regulation.
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