Access to Financial Services Markets Overseas Funds Regime Recognition and notification
Once an equivalence determination is granted, individual schemes wishing to market in the UK will need to be recognised by the FCA.
	Retail collective investment schemes from a country which fall within an equivalence determination will need to apply to the FCA to gain recognition. The FCA will not be responsible for verifying scheme’s compliance with the overseas regulatory framework, reflecting the fact that the equivalence determination has already confirmed that schemes in the specified category offer equivalent investor protection. The FCA will have the power to require scheme operators to provide it with such information as is reasonably considered necessary for the purpose of determining the application. This would include information which confirms that the scheme is eligible for recognition and meets any additional requirements, where they have been specified as part of an equivalence determination. The Act also disapplies the notification requirements under the NPPR for schemes which are recognised under the retail equivalence regime of the OFR. This is because there are already sufficient reporting requirements under the OFR, such as the FCA power described above, as well as a requirement for a cooperation agreement.
	The process for MMFs gaining market access will depend on whether they intend to market to retail or professional clients. MMFs that wish to market to both retail and professional clients must either:
be located in a country or territory with equivalence determinations for both MMFs and retail schemes and apply for recognition under the OFR; or
be located in a country or territory with an equivalence determination for MMFs and be recognised as suitable for marketing to retail investors under section 272 of FSMA.
	In order to market solely to professional investors in the UK, MMFs must provide MMF equivalence and notify with the NPPR. The NPPR is a mechanism that allows some types of non-UK authorised or recognised schemes to market to professional investors in the UK, that are not allowed to do so through domestic marketing or passporting regimes.
	The Act also specifies that the OFR and section 272 of FSMA apply to both a collective investment scheme and a part of a collective investment scheme. This makes it clear that the regimes can recognise, if appropriate, schemes from other countries or territories where these are structured as umbrella funds and sub-funds. Umbrella funds and sub-funds are a way of structuring collective investment schemes: an umbrella fund is effectively a legal entity which groups together different sub-funds, with each sub-fund having its own pool of assets, typically to provide a range of different investment strategies for investors. Market practice has evolved considerably since FSMA gained Royal Assent in 2000 and it is now common for funds to use this structure. Where countries or territories allow schemes to be structured in this way, HM Treasury can therefore ensure it is the sub-fund that can gain recognition for marketing to UK investors. HM Treasury has the power to make modifications where appropriate to clarify how Part 17 and provisions made under Part 17 have effect in relation to parts of schemes recognised or seeking recognition under the OFR and section 272. To ensure that legislation outside of Part 17 FSMA is sufficiently clear, the Act gives HM Treasury the power to modify or amend legislative provisions in FSMA and other parts of the statute book, so that HM Treasury can clarify whether and how provisions, relating to schemes recognised or seeking recognition under the OFR or section 272, have effect for parts of schemes. HM Treasury is only permitted to use these powers in relation to legislation that was made before the OFR and the amendments to the section 272 regime under section 25 are commenced.