The Financial Services and Markets Act 2023 (Commencement No. 3) (Amendment) Regulations 2023, made on August 25, 2023, have postponed the revocation of the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013. This decision has implications for the financial services industry in the United Kingdom.
The Commencement No. 3 Regulations amend the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023, which were made on July 10, 2023, and provide for the entry into force of certain provisions of the Financial Services and Markets Act 2023. These provisions include revoking retained EU legislation relating to financial services, including the CITS Regulations.
The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 establish a fund vehicle for the UK investment management industry, making UK domiciled funds for collective investment in transferable securities more competitive. These regulations were initially set to be revoked. However, with the recent amendment, the revocation will now be determined at a later date appointed by the Treasury.
This decision to postpone the revocation of the CITS Regulations has significant implications for the investment management industry in the UK. The CITS Regulations have played a crucial role in making UK domiciled funds more competitive in the global market. They have provided a fund vehicle that attracts investment and supports the growth of the industry.
The revocation of the CITS Regulations would have had far-reaching consequences. It would have removed a competitive advantage for UK investment management firms, potentially leading to a decline in market share and a loss of business to other jurisdictions.
By postponing the revocation, the UK government recognizes the importance of maintaining a supportive regulatory framework for the financial services industry. This decision reflects a commitment to ensuring that the UK remains an attractive destination for investment and continues to foster a thriving and competitive financial sector.
The delay in revocation also provides an opportunity for the industry to adapt and prepare for potential changes. Market participants will have more time to evaluate the implications of the CITS Regulations’ revocation and make any necessary adjustments to their operations and strategies.
Overall, the postponement of revoking the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 is a positive development for the UK financial services industry. It allows for continued competitiveness and stability in the market, giving market participants the confidence to plan for the future. The industry can now focus on further developing and expanding its offerings, ensuring its continued success and contribution to the broader economy.