The OFR has been designed by Parliament to provide a streamlined process that allows non-UK domiciled funds to market to UK retail customers where the government has found a jurisdiction equivalent.  

The regime supports the existing global operating model of asset managers, facilitates greater consumer choice, while also maintaining existing high standards. 

The FCA is consulting on changes to its rules that will allow overseas schemes to be recognised under OFR, should the UK Government make any determination on equivalence. This is to allow the FCA and firms enough time to prepare for the changes necessary. As the OFR allows the Government to recognise any overseas jurisdiction as equivalent, the FCA may consult about additional investor protection requirements following each decision by Government.  

The FCA has proposed the categories of information that overseas schemes will need to submit to become recognised by the FCA under the OFR. This includes key information about the scheme’s investment objective and policy, and the main categories of assets that it invests in. The FCA has sought to design a regime that is efficient and effective. 

The FCA has also put forward new measures to make sure investors are aware of the protections they have, such as access to the Financial Ombudsman Service and the Financial Services Compensation Scheme, if they invest in an overseas fund.  

Overseas funds will need to make it clear when these customer protections are not available. This will help consumers to make informed decisions about which funds best meet their needs. 

Sarah Pritchard, Executive Director of Markets, FCA, said: 

'We want to balance making the transition into the new regime as smooth as possible for firms, while also meeting our primary objective to protect UK retail investors.

'With our proposed rules and guidance, we set out what we think a strong but proportionate model looks like.'

Read the consultation paper.