Unregulated Collective Investment Schemes (UCIS)
Many of our clients have some involvement with unregulated collective investment schemes either as provider, promoter, introducer, manager or operator.
Despite significant regulatory work in the area of unregulated collective investment schemes over the last few years they remain an emerging product risk in the eyes of the FSA. The FSA's concerns are as follows:
- investment managers, often operating within opaque offshore structures, are advising on and managing UCIS sometimes without due regard for whether products end up in the portfolios of the wrong customers or the long-term effects on the end client;
- intermediaries are promoting UCIS to retail clients without explicit regard to statutory restrictions on such activities;
- UCIS are promoted to customers who are not eligible for this type of investment and intermediaries lack understanding of individual UCIS and what they invest in; and
- consumers are receiving unsuitable advice to invest in UCIS even when provision of such advice is permitted.