Collective investment schemes—one minute guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Collective investment schemes—one minute guide
  • What is a collective investment scheme?
  • Corporate bodies and CIS
  • Regulated activities and CIS
  • The regulation of CIS
  • Regulated CIS
  • Unregulated CIS
  • Location
  • Property
  • Structure
  • More...

Collective investment schemes—one minute guide

This one minute guide provides a brief summary of the key regulatory requirements for collective investment schemes (CIS). For a more detailed discussion, see Practice Note: Collective investment schemes-essentials, or to access the entire collective investment schemes subtopic, see: Collective investment schemes (CIS)—overview.

What is a collective investment scheme?

A CIS is an investment fund used for collective investment by investors. Investors’ money is invested on a pooled basis by an investment manager in return for a fee. Section 235 of the Financial Services and Markets Act 2000 (FSMA 2000) defines a CIS as:

‘...any arrangements with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.’

The term ‘arrangement’ is very wide. No formality is required (FSA v Fradley, Arden LJJ at [33]) and communications do not need to give rise to any legally enforceable agreement (Re Duckwari plc (No 2) v Offerventure Ltd). Arrangements can also include preparatory steps, a view endorsed in Brown v InnovatorOne PLC, Hamblen J at [1170]. There are no restrictions on the

Popular documents