In the UK investment funds are structured as collective investment schemes (CIS).
According to section 235(1) of The Financial Services Markets Act 2000 (FSMA), a collective investment scheme is any arrangement 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.
To be advertised to the public in the UK investment funds must be authorised or recognised by the Financial Conduct Authority (FCA).
An authorised fund, or ‘authorised CIS’, must be constituted in the UK and take one of the following legal forms:
It must also be classified, based on a marketing strategy, as one of the following:
If a fund registered outside the UK to be advertised to the public it must be recognised by FCA. A recognised fund may also be called a ‘recognised CIS’ or ‘overseas scheme’.
A UCITS established in another EEA country must be recognised, under section 264 of the FSMA.
Other funds established in another EEA country, including an alternative investment fund (AIF) authorised in another EEA country, must be recognised by FCA, under section 272 of FSMA.