On 31 January 2024, a draft statutory instrument (SI) – the Financial Services Act 2021 (Overseas Funds Regime and Recognition of Parts of Schemes) (Amendment and Modification) Regulations 2024 – was published on legislation.gov.uk, along with a draft explanatory memorandum.

The draft SI is intended to support the operationalisation of the Overseas Funds Regime (OFR), the new equivalence regime to recognise overseas funds under section 271A of the Financial Services and Markets Act (FSMA) 2000, which was legislated for in the Financial Services Act 2021. The draft SI makes consequential amendments to provisions across the statute book to insert references to section 271A FSMA 2000, where such provisions refer to schemes recognised under section 272 FSMA 2000 (the route for individually recognising funds). Some references are also being modified to ensure they capture recognised sub-funds.

These changes are intended to ensure that the OFR works as intended, as a streamlined route for overseas funds to market to UK retail investors. Under the new OFR, overseas funds from jurisdictions that are determined to be equivalent to the UK in terms of consumer protection will be able to market to UK retail investors following an application for recognition.

The draft SI states that it will come into force on 26 February 2024.