The OFR Update

We’re making our way through the OFR landing slots 5 – 7 (for managers beginning with D, E, F and G) and thought it might be a good time for us to share some thoughts on the process so far.

The OFR:

OFR Applications: Feedback from both the FCA and managers regarding the OFR application process has been broadly positive. The FCA appears to be adopting a pragmatic approach, with applications typically being processed in under two months. Smaller umbrella applications may even be completed within a week.

Financial Promotions: As previously highlighted, there will be a significant difference from the rights which operators of recognised schemes using the UCITS passport could enjoy while the UK was a member of the EU. At the moment, EEA UCITS in the TMPR can communicate financial promotions themselves, as they are deemed to be authorised persons under FSMA 2000. However, once recognised, fund operators will only be able to lawfully issue a financial promotion in the UK if (a) they can make use of an exemption in the Financial Promotions Order 2005 or (b) a UK authorised person approves the promotion for issue in the UK on their behalf. There still remains uncertainty about whether a prospectus would be outside the financial promotion regime. The FCA isn’t delaying applications on this point alone but they do require information about who will approve the promotions.

Extension of SDR to OFR Funds: We are still waiting to hear about whether and how the Government will be extending the regime to OFR funds. We are seeing some of our clients include disclosures in the supplement indicating that the fund is currently outside the scope of SDR.

The UK’s new disclosure rules for “Consumer Composite Investments” – replacement of the KIID/KID in the UK:

As widely expected, one of the Brexit “benefits” to be provided to the UK financial services industry is the removal of the much-derided PRIIPs key information document and the UCITS key investor information document. However, as with all things connected to the PRIIPs regime, nothing is as easy as it seems and the FCA is now proposing a separate form of disclosure requirements, which will need to be supplied to UK retail investors.

The FCA announced at the end of 2024 that it would be creating a new product information framework for “Consumer Composite Investments” (“CCIs”). CCIs are defined as “investments where the returns depend on the performance of, or changes in, the value of indirect investments” and include UCITS (both UK and overseas). The new regime aims to introduce "a more flexible and proportionate product information framework" applicable to any firm manufacturing or distributing CCIs to retail investors in the UK. This regime will replace PRIIPs KIDs and UCITS KIIDs with a 'Product Summary' that must be provided to consumers. The proposals include changes to the presentation of disclosures, ensuring they are tech-neutral, and standardised rules for calculating key metrics.

Please see our articles for further information about these proposals:
FCA consults on new CCI disclosure rules to replace UK PRIIPs regime (December 2024)

FCA consults on further proposals for Consumer Composite Investments (April 2025)

We’re currently waiting for the FCA to publish its final rules on this disclosure regime (expected in late 2025). We are monitoring this carefully and will be in touch with more details soon.

Please feel free to reach out if you have any questions or require further clarification on any of these points.