What is an Unregulated Collective Investment Scheme?

The FSA defines an Unregulated Collective Investment Scheme in section 235 of the Financial Services and Markets Act 2000

“any arrangements 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”

The full legislation can be read within the FSA’s online Glossary

To summarise the above legislation, a UCIS is a fund into which investors’ (“persons”) investment funds are pooled together in order to invest/acquire assets (“property of any description”) which are managed (“management”) on their behalf, with the intention of generating shared profits. A crucial point is that the management must be such that investors have no day-to-day role whatsoever in the running of the fund.

The term “unregulated” is somewhat confusing because, in fact, all UCIS schemes must have an operator who is regulated by the FSA. In addition, the promotional material and the persons who can invest into a UCIS are both governed by strict regulations. Citadel is crucially aware of the high compliance standards that operators must meet and this is reflected in the level of service that we can provide to our clients as an operator of UCIS projects.