Undertakings for collective investment in transferable securities (UCITS) funds.

Non-UCITS retail funds (NURS).

The Financial Services and Markets Act 2000 (FSMA).

The Open-ended Investment Companies Regulations 2001 (OEIC Regulations).

Several statutory instruments made under FSMA, including:

Companies Act 2006 (CA 2006).

Corporation Tax Act 2010 (CTA).

Investment Trust (Approved Company) (Tax) Regulations 2011 (ITR).

Applicable FCA Rules including:

Conduct of Business Sourcebook Chapter 4 (COBS 4).

Investment Funds Sourcebook.

FSMA.

RAO.

The FCA in relation to listing, prospectus and continuing obligations.

HM Revenue and Customs (HMRC) in relation to taxation requirements.

Authorised by the Financial Conduct Authority (FCA), if domiciled in the UK.

Recognised by the FCA using the "recognised schemes" provisions in the Financial Services and Markets Act 2000 (FSMA), if domiciled in another jurisdiction.

A draft prospectus.

A draft instrument of incorporation (for OEICs) or trust deed (for AUTs).

An application form.

The application fee.

A key investor information document (KIID) for undertakings for collective investment in transferable securities funds (UCITS funds).

Solicitors' certificate confirming that the documents constituting the fund comply with FSMA and OEIC Regulations, as applicable.

The business of the company consists of investing its funds in shares, land or other assets with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds.

The shares making up the company's ordinary share capital (or, if there are such shares of more than one class, those of each class) are admitted to trading on a regulated market (such as the main market of the London Stock Exchange).

An AUT manager must:

An OEIC authorised corporate director (ACD) that is the sole director of an OEIC must:

Authorised as a trustee.

Independent from the manager.

Established in the UK or another EEA state and have a place of business in the UK.

Be a body corporate established in the UK or another EEA state.

Have a place of business in the UK.

Have their affairs administered in the country in which they are incorporated.

Be authorised persons.

Have permission to act as a depository.

Be independent of the company and of the persons appointed as directors of the company.

A separate corporate identity.

A single director or directors.

Shareholders.

Unit holders have beneficial ownership of the fund's assets.

The fund's assets are held on trust by the trustee.

As a closed-ended vehicle, the fund is not required to provide redemption rights to investors. This creates a more stable pool of capital in the fund.

Investment trusts benefit from more flexible investment and borrowing powers relative to open-ended retail funds (see Question 9).

Securities admitted to official listing in an EEA state or traded on an eligible securities market (approved securities) are permitted investments.

Transferable securities that are not approved securities are permitted investments, but with a 10% maximum limit.

Government and public securities are permitted investments, with no maximum limit

Regulated funds other than qualified investor schemes (see Question 14) are permitted investments.

Unregulated schemes and qualified investor schemes are not permitted investments.

Warrants are permitted investments.

Investment trusts are permitted investments.

Deposits are permitted investments.

Derivatives are permitted investments, with no maximum limit. Global exposure relating to derivatives and forward transactions may not exceed the net value of the scheme property.

Immovables (that is, real estate) are not permitted investments.

Commodities, including gold, are not permitted investments.

Hedging is permitted, with no maximum limit.

Stock lending is permitted, with no maximum limit.

Underwriting is permitted, with no maximum limit.

Borrowing is permitted, with a 10% maximum limit (on a temporary basis).

Securities admitted to official listing in an EEA state or traded on an eligible securities market (approved securities) are permitted investments, with no maximum limit.

Transferable securities that are not approved securities are permitted investments, but with a 20% maximum limit.

Government and public securities are permitted investments, with no maximum limit

Regulated funds other than qualified investor schemes (see Question 14) are permitted investments, with no maximum limit.

Unregulated schemes and qualified investor schemes are permitted investments, with a 20% limit (there is no maximum limit for funds of alternative investment funds (FAIFs) (see Question 1).

Warrants are permitted investments, with no maximum limit.

Investment trusts are permitted investments, with no maximum limit.

Deposits are permitted investments, with no maximum limit.

Derivatives are permitted investments, with no maximum limit. Global exposure relating to derivatives and forward transactions may not exceed the net value of the scheme property.

Immovables (that is, real estate) is a permitted investment (either directly or indirectly).

Gold is a permitted investment, with a limit of 10%. Other commodities are not permitted.

Hedging is permitted, with no maximum limit.

Stock lending is permitted, with no maximum limit.

Underwriting is permitted, with no maximum limit.

Borrowing is permitted, with a 10% maximum limit.

Cash and near cash is a permitted investment, with no maximum limit.

Not more than 20% in value of the scheme property is to consist of deposits with a single body.

Not more than 5% in value of the scheme property is to consist of transferable securities or approved money-market instruments issued by any single body. This 5% limit can be increased as follows:

The exposure to any one counterparty in an over-the-counter (OTC) derivative transaction must not exceed 5% in value of the scheme property, this limit being raised to 10% where the counterparty is an approved bank.

In applying the limits detailed above, not more than 20% in value of the scheme property is to consist of any combination of two or more of the following:

Not more than 20% in value of the scheme property is to consist of transferable securities and approved money-market instruments issued by the same group.

Not more than 20% in value of the scheme property is to consist of the units of any one collective investment scheme.

Have a published investment policy relating to asset allocation, risk diversification and gearing.

Obtain the prior approval of its shareholders for any material change to that policy.

Is a property fund.

Is a fund of alternative investment fund (FAIF).

Has an investment objective that is to provide a specified level of return.

The registrar of the AUT approves the transfer.

The trust deed permits the transfer.

There is no stamp duty reserve tax (SDRT) payable or the trustee has been paid the amount of SDRT payable.

Short reports that are sent to all holders and include information on the fund's investment activity and performance, together with other required information.

Long reports that are available to investors on request. Long reports must include the accounts and a report from the auditor, the manager and trustee or depository, together with other required information.

Investors must also be provided with a Key Investor Information Document (KIID), which is a short document, designed to be easily understood by investors.

Chapters 9 and 15 of the Listing Rules (LR).

Chapter 4 of the Disclosure and Transparency Rules (DTR).

Investors must also be provided with a Key Investor Document (KID), which is a short document, designed to be easily understood by investors.

The fund's chargeable gains on the disposal of investments are generally exempt from UK tax.

The fund's income is subject to UK corporation tax at 19% (reducing to 18% in 2020). Income includes offshore income gains realised on a disposal of interests in certain non-reporting offshore funds (NROFs) and proceeds of disposal of assets bought and sold as trading transactions.

Certain categories of income are exempt from tax, such as income from most dividends and income from derivative contracts, options and creditor loan relationships, provided that the authorised investment fund accounts for such income using the appropriate method.

Funds are entitled to deduct management fees when calculating their taxable profits.

If 60% or more (by market value) of the fund's investments are "qualifying investments" (money placed at interest, securities, shares in a building society, qualifying units in another investment fund, certain derivative contracts and CFDs, and alternative finance arrangements) throughout the distribution period then distributions to investors are treated as payments of annual interest rather than dividends. To the extent that the distributions were derived from income taxable in the hands of the fund, the fund is entitled to deduct its interest distributions and deemed interest distributions when calculating its pre-tax profits. The fund will have to deduct basic rate income tax from distributions made to investors who do not qualify for gross payment of annual interest.

There are special tax regimes for certain types of open-ended retail fund, for example property authorised investment funds (PAIFs), tax electing funds (TEFs), funds investing in non-reporting offshore funds regime (FINROF), and authorised contractual schemes (ACS) which can apply when the relevant conditions are met.

In particular, an ACS is not a taxable entity for UK purposes and suffers no UK tax directly. An ACS is not subject to UK corporation tax, income tax or capital gains tax.

Funds are not required to pay value added tax (VAT) on the fees which they pay for management services.

Distributions treated as annual interest are subject to income tax at the savings rates (top rate currently 45%). 20% tax is deducted at source by the fund and additional tax (up to 25%) is payable by the investor. Investors not liable to income tax at the basic rate can recover the tax deducted at source. The Scottish rates of income tax do not apply to any savings or investment income from AIFs, irrespective of whether the investor is a Scottish tax payer.

Dividends received or deemed to be received are subject to income tax at the dividend rate (the top rate is currently 38.1%).

A gain realised on a disposal of an interest in an authorised investment fund that is not a FINROF is subject to capital gains tax at 20% in the hands of the investor.

Stamp duty reserve tax (SDRT) is payable on the acquisition of units in a fund at 0.5% of the price. SDRT is no longer payable on the redemption of units by a fund except in very limited circumstances.

Non-residents are generally exempt from UK tax on income from open-ended retail funds and from UK capital gains tax (CGT) on gains realised.

In relation to ACS, for direct tax purposes, investors will generally be treated as if they had invested directly in the underlying assets (apart from gains arising on the disposal of assets of a co-ownership scheme). However, foreign law advice should be taken in relation to the treatment of an ACS for non-UK tax purposes, and in particular whether it is regarded as tax transparent.