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Ucis restrictions will apply to some structured products


The proposed ban on unregulated collective investment schemes to retail investors could be applied to some structured products.

In its consultation on the sale of collective Ucis products, publiched today, the regulator says some special purpose vehicles should face restrictions on sales to retail investors.

The regulator highlighted concerns over the use of special purpose vehicles to pool investment assets “traditionally found within Ucis”.

“Pooled investment SPVs can and often do carry similar risks to Ucis in terms of operation, structure, governance standards and the choice of underlying assets,” it writes.

“Some structured products should be caught,” reports the FSA. “This is intentional; where a structured product’s risk profile or investment strategy are non- mainstream by virtue of their reference assets, they should be subject to the same restrictions and consumer safeguards as other non-mainstream pooled investments.”

However, the regulator revealed it would review structured products based on mainstream indices on a case-by-case bassis for those wishing for a waiver allowing marketing to retial investors. It adds that structured deposits are not intended to be caught out by rules.

The regulator has also set its sights on qualified investor schemes as a type of scheme that can expose investors to Ucis-type risks.

It has argued QIS fund managers “must act as gatekeepers” to ensure only qualified investors can buy into the fund, but says it is not always possible for them to identify the end investor.

The regulator says restrictions on sales to retail investors should be rolled out across QIS products.


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