Quarterly Consultation CP24/11
The Financial Conduct Authority (“FCA”) consistently updates its regulatory framework to maintain the integrity and efficiency of financial markets. A recent example is the Collective Investment Schemes Sourcebook (Concentration Limits) Instrument 2025, details of which were previewed in Quarterly Consultation Paper No. 44 (CP24/11). As with much of the content in quarterly consultations, the proposals were brought into force without a further Policy Statement.
UCITS Concentration Rules
A significant change introduced by CP24/11 is the deletion of COLL 5.2.30R(1)(c). This ensures that the concentration provisions in COLL 5.2.29R apply at the sub-fund level of an umbrella Collective Investment Scheme (CIS) investing in units of other CISs, rather than at the umbrella level. This amendment impacts how investment limits are calculated and adhered to within umbrella funds.
Amendments Introduced by Instrument FCA 2025/1
Effective 31 January 2025, the Collective Investment Schemes Sourcebook (Concentration Limits) Instrument 2025 introduces specific regulatory changes:
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- Concentration Limit Adjustments: The amendment to COLL 5.2.29R allows certain exceptions to the 25% investment limit in other CISs.
- Exemptions: Specific exemptions apply when both the investing UCITS scheme and the collective investment scheme are managed by the same authorised fund manager.
- Application at Sub-Fund Level: Ensures that concentration limits are applied at the individual sub-fund level within umbrella schemes, promoting more precise compliance and risk management.
These changes are designed to mitigate risks associated with high concentration levels in investment portfolios, promoting a more balanced and diversified approach.
How Can Complyport Help?
Navigating regulatory updates requires expertise and a proactive approach. Complyport offers comprehensive compliance services to ensure your firm remains compliant and well-positioned:
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- Regulatory Analysis – Our team provides in-depth analyses of FCA consultation papers and Handbook updates, interpreting their implications for your operations.
- Policy Development – We assist in revising and developing internal policies to align with new regulatory requirements, ensuring seamless integration into your compliance framework.
- Training and Support – Complyport offers tailored training sessions to educate your staff on regulatory changes, fostering a culture of compliance and awareness.
Engage with Complyport Today
Ensure your firm remains compliant and competitive. Contact Complyport today to schedule a consultation with our regulatory experts and discover how we can tailor our services to your specific needs.
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