The Alternative Investment Fund Managers Regulations 2013

• Citation: S.I. 2013/1773
• Sections: 197

Section 1 Citation and commencement

These Regulations may be cited as the Alternative Investment Fund Managers Regulations 2013 and come into force on 22nd July 2013.

Section 2 Interpretation

(1) In these Regulations—

“ the Act ” means the Financial Services and Markets Act 2000;

“ AIF ” has the meaning given in regulation 3;

“ AIFM ” has the meaning given in regulation 4;

...

“ authorised AIF ” means an AIF that is—

an authorised unit trust scheme,

an authorised contractual scheme, or

an authorised open-ended investment company,

as defined in section 237(3) of the Act (other definitions) ;

“ Commission Delegated Regulation ” means the Commission Delegated Regulation ( EU ) No 231/2013 of 19 December 2012, supplementing Directive 2011/61/ EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision ;

...

“ depositary ” means a person appointed in compliance with the requirement for an AIFM to appoint a depositary in rule 3.11.4 of the Investment Funds sourcebook ;

“ the directive ” means Directive 2011/61/ EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers ;

“ EEA AIF ” means an AIF which—

is authorised or registered under the applicable law in an EEA state, or has its registered office or head office in an EEA State (but see paragraph (1A) if the AIF is a limited partnership) ; and

was marketed in the United Kingdom before IP completion day under these Regulations;

...

...

...

...

...

“established”: a reference to the place where an AIF is established (however expressed) is, in relation to an AIF that is a limited partnership, a reference to—

the country in which the AIF is authorised or registered, or

if the AIF is not authorised or registered, the country in which it has its principal place of business;

“ EuSEF ” means a European social entrepreneurship fund registered under Article 15a of the EuSEF Regulation as that Regulation applies in the European Union;

“ EuSEF Manager ” means the manager of a qualifying social entrepreneurship fund that is registered in accordance with Article 15 of the EuSEF Regulation;

“ EuSEF Regulation ” means Regulation ( EU ) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds as amended by Regulation (EU) No 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds ;

“ EuVECA ” means a European venture capital fund registered under Article 14a of the EuVECA Regulation as that Regulation applies in the European Union;

“ EuVECA Manager ” means the manager of a qualifying venture capital fund that is registered in accordance with Article 14 of the EuVECA Regulation;

“ EuVECA Regulation ” means Regulation ( EU ) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds as amended by Regulation (EU) No 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds ;

“ external AIFM ” has the meaning given in regulation 4(3);

“ external valuer ” means a person who performs the valuation function described in section 3.9 of the Investment Funds sourcebook in respect of an AIF managed by a full-scope UK AIFM, and is not the AIFM of that AIF;

“ FCA ” means the Financial Conduct Authority;

“ full-scope UK AIFM ” means a UK AIFM which has a Part 4A permission to carry on the regulated activity of managing an AIF and is not a small authorised UK AIFM;

...

“ full-scope Gibraltar AIFM ” means an AIFM which is authorised to manage AIFs under Part 4 of the Financial Services (Alternative Investment Fund Managers) Regulations 2013 of Gibraltar which is not a small AIFM within the meaning of regulation 8 of those Regulations;

“ Gibraltar AIF ” means an AIF which is authorised or registered under the national law in Gibraltar, or has its registered office or head office in Gibraltar (but see paragraph (1A) if the AIF is a limited partnership) ;

“ Gibraltar AIFM ” means a Gibraltar AIFM which is authorised to manage AIFs under Part 4 of the Financial Services (Alternative Investment Fund Managers) Regulations 2013 of Gibraltar which is exercising an entitlement under the Financial Services and Markets Act 2000 (Gibraltar) Order 2001 to establish a branch or provide services in the United Kingdom;

“ implementing provision ” means a requirement that is imposed—

by these Regulations;

by the Commission Delegated Regulation;

by any other EU Regulation which was made under the directive before IP completion day, and forms part of assimilated law;

by or under the Act, if the provision was relied on before IP completion day to implement the directive, or replaces such a provision ;

“ internal AIFM ” has the meaning given in regulation 4(3);

“ issuer ” means a company which has its registered office in the United Kingdom and the shares of which are admitted to trading on a UK regulated market, within the meaning of Article 2(1)(13A) of Regulation (EU) 600/2014 on markets in financial instruments;

“ leverage ” means any method by which the AIFM increases the exposure of an AIF it manages whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means;

“ limited partnership ” means a limited partnership registered under the Limited Partnerships Act 1907;

“managing an AIF” is to be interpreted in accordance with regulation 4(2), and cognate expressions are to be interpreted accordingly;

“ non-listed company ” means a company which has its registered office in the United Kingdom and the shares of which are not admitted to trading on a UK regulated market within the meaning of Article 2(1)(13A) of Regulation (EU) 600/2014 on markets in financial instruments;

“MMF” for the purposes of these Regulations means an AIF that is authorised as a money market fund under Article 5 of the MMF Regulation;

“MMF Regulation” means Regulation 2017/1131 of the European Parliament and of the Council of 14th June 2017 on Money Market Funds;

“ professional investor ” means an investor who is considered to be a professional client within the meaning of Article 2(1)(8) of Regulation (EU) 600/2014 on markets in financial instruments;

“ qualifying social entrepreneurship fund ” has the meaning given in Article 3(b) of the EuSEF Regulation;

“ qualifying venture capital fund ” has the meaning given in Article 3(b) of the EuVECA Regulation;

“ RVECA Manager ” means the manager of a venture capital fund that is registered in accordance with Article 14 of the EuVECA Regulation;

“ the Regulated Activities Order ” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ;

...

“ retail investor ” means an investor who is not a professional investor;

“ RVECA ” means a venture capital fund which is registered by the FCA in accordance with Article 14a of the EuVECA Regulation;

“ SEF ” means a social entrepreneurship fund which is registered by the FCA in accordance with Article 15a of the EuSEF Regulation;

“ SEF Manager ” means the manager of a qualifying social entrepreneurship fund that is registered in accordance with Article 15 of the EuSEF Regulation;

“ small AIFM ” has the meaning given in regulation 9;

“ small authorised UK AIFM ” means a UK AIFM which—

is a small AIFM;

has a Part 4A permission to carry on the regulated activity of managing an AIF; and

has not exercised the option ... to meet the full requirements applying to a full-scope UK AIFM ;

...

“ small registered UK AIFM ” means an AIFM entered in the register maintained in accordance with regulation 10(1);

“ small third country AIFM ” means a third country AIFM which is a small AIFM;

“ third country ” means a state which is not the United Kingdom ;

“ third country AIF ” means an AIF which is neither a Gibraltar AIF nor a UK AIF;

“ third country AIFM ” means an AIFM which has its registered office in a third country;

“ third country AIF custodian ” has the meaning given in regulation 57(5)(a)

“ UK AIF ” means an AIF which—

is an authorised AIF; or

is not authorised or registered in the United Kingdom , but has its registered office or head office in the United Kingdom (but see paragraph (1A) if the AIF is a limited partnership) ;

“ UK AIFM ” means an AIFM which has its registered office in the United Kingdom;

...

“ UK UCITS ” has the meaning given in section 237(3) of the Act;

“ working day ” has the meaning given in section 191G(2) of the Act (interpretation of Part 12) .

(1A) In the application of the definition of “EEA AIF”, “Gibraltar AIF” and “UK AIF” to an AIF that is a limited partnership, a reference to the AIF’s registered office is to be read as a reference to its principal place of business.

(2) Unless otherwise defined—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) any expression used in these Regulations which is used in a ... EU regulation made under the directive which forms part of assimilated law has the same meaning as in that regulation; and

(c) any other expression used in these Regulations which is defined for the purposes of the Act has the meaning given by the Act.

(3) Any reference in these Regulations to an application for a Part 4A permission to carry on a regulated activity, the giving of such a permission or a refusal to give such a permission, includes reference to an application to vary a Part 4A permission by adding that regulated activity to the activities to which the permission relates, such a variation of a Part 4A permission or a refusal so to vary a Part 4A permission.

(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Any reference in these Regulations to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the FCA containing rules made and guidance issued by the FCA under the Financial Services and Markets Act 2000 as it has effect on 1 January 2022 .

(6) Any reference in these Regulations to any EU Regulation, EU decision or EU tertiary legislation (within the meaning of section 20 of the European Union (Withdrawal) Act 2018) is, unless the contrary intention appears, to be treated as a reference to that EU regulation, EU decision or EU tertiary legislation as it has effect on the day on which the Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2018 are made.

Section 3 Meaning of “AIF”

(1) “ AIF ” means a collective investment undertaking, including investment compartments of such an undertaking, which—

(a) raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of these investors; and

(b) is not a UK UCITS;

(2) An AIF may be open-ended or closed-ended, and constituted in any legal form, including under a contract, by means of a trust or under statute.

(3) None of the following entities is an AIF—

(a) an institution for occupational retirement provision which falls within the scope of Directive 2003/41/ EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision ;

(aa) an occupational pension scheme, within the meaning of section 1(1) (categories of pension schemes) of the Pension Schemes Act 1993;

(b) a holding company;

(c) an employee participation scheme or employee savings scheme;

(d) a securitisation special purpose entity.

Section 3A Arrangements not constituting an AIF: qualifying stablecoin arrangements

(1) Arrangements do not constitute an AIF where—

(a) they are arrangements under which money or an asset is held for the stabilisation of a qualifying stablecoin, and

(b) both the conditions in paragraph (2)(a) and (b) are met.

(2) The conditions referred to in paragraph (1)(b) are—

(a) that the issuer of the qualifying stablecoin does not pay, or arrange for another to pay, interest or yield arising from money or an asset held for the stabilisation of the qualifying stablecoin, or the benefits accruing from such to a holder;

(b) that under normal conditions, the qualifying stablecoin offers a holder a right to redeem the stablecoin with the issuer at the same value, in the currency the stablecoin referenced at issue (excluding any fees that may be payable on redemption).

(3) For the purposes of this regulation—

(a) “ qualifying stablecoin ” has the meaning given by article 88G of the Regulated Activities Order (qualifying stablecoin);

(b) money or an asset is held for the stabilisation of a qualifying stablecoin if it is held for the purpose mentioned in article 88G(2)(b) of the Regulated Activities Order.

Section 4 Meaning of “AIFM”, “managing an AIF”, “external AIFM” and “internal AIFM”

(1) “ AIFM ” means a legal person, the regular business of which is managing one or more AIFs.

(2) Managing an AIF means performing at least risk management or portfolio management for the AIF.

(3) The AIFM of an AIF may be either—

(a) another person appointed by or on behalf of the AIF and which through that appointment is responsible for managing the AIF (“external AIFM”); or

(b) where the legal form of the AIF permits internal management and where the AIF's governing body chooses not to appoint an external AIFM, the AIF itself (“internal AIFM”).

(4) None of the following entities is an AIFM—

(a) an institution for occupational retirement provision which falls within the scope of Directive 2003/41/ EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision , including, where applicable, the authorised entities responsible for managing such institutions and acting on their behalf referred to in Article 2.1 of that directive, or the investment managers appointed pursuant to Article 19.1 of that directive, in so far as they do not manage AIFs;

(aa) an occupational pension scheme, within the meaning of section 1(1) of the Pension Schemes Act 1993, including its trustees and managers;

(b) the European Central Bank, the European Investment Bank, the European Investment Fund, a bilateral development bank, the World Bank, the International Monetary Fund, any other supranational institution or similar international organisation, or a European Development Finance Institution, in the event that such institution or organisation manages AIFs and in so far as those AIFs act in the public interest;

(c) a national central bank;

(d) a national, regional or local government or body or other institution which manages funds supporting social security and pension systems;

(e) a holding company;

(f) an employee participation scheme or employee savings scheme;

(g) a securitisation special purpose entity.

Section 5 Applications for Part 4A permission

(1) This regulation applies where a person—

(a) applies to a regulator for permission under Part 4A of the Act to carry on the regulated activity of managing an AIF; and

(b) upon being given such permission would not be a small authorised UK AIFM.

(2) Where the applicant has a Part 4A permission pursuant to which it may carry on the regulated activity of managing a UCITS , the regulator may not require the applicant to provide information or documents which the applicant provided when applying for that Part 4A permission if such information or documents remain up to date.

(3) The regulator must not give the Part 4A permission unless—

(a) the applicant would be an AIFM and would be the only AIFM of each AIF it managed;

(b) the regulator is satisfied that the applicant will comply with the implementing provisions applicable to a full-scope UK AIFM;

(c) the applicant has sufficient initial capital and own funds in accordance with rule 11.2.1 and section 11.3 of the Interim Prudential sourcebook for Investment Businesses ; and

(d) the shareholders or members of the AIFM that have qualifying holdings are suitable taking into account the need to ensure the sound and prudent management of the AIFM.

(4) The regulator must determine the application before the end of the period of three months beginning with the date on which it received the complete application.

(5) The regulator may extend the period mentioned in paragraph (4) for an additional period of three months where it considers it necessary due to the specific circumstances of the case, and where it has notified the applicant accordingly.

(6) Where the application is made to the PRA and cannot be determined by the PRA without the consent of the FCA, the FCA's decision must also be made within the period required by sub-paragraph (4), as extended under sub-paragraph (5) where applicable.

(7) If the regulator does not determine the application before the end of the period of six months beginning with the date on which it received the complete application, the applicant may refer the matter to the Tribunal.

(8) An application is complete for the purposes of paragraph (4) or (7) if it contains—

(a) information on the persons effectively conducting the business of the applicant;

(b) information on the identities of the applicant's shareholders or members, whether direct or indirect, that have qualifying holdings and on the amount of those holdings;

(c) a programme of activity setting out the organisational structure of the applicant, including information on how the applicant intends to comply with its obligations under the following provisions, so far as they apply to an AIFM—

(i) the Financial Services and Markets Act 2000;

(ii) these Regulations;

(iii) rules made by the FCA;

(iv) Commission Delegated Regulation;

(d) information on the remuneration policies and practices of the applicant that have been or will be adopted pursuant to implementation provisions relating to Article 13 of the directive;

(e) information about the investment strategies, including the types of underlying funds if the AIF is a fund of funds, and the applicant's policy as regards the use of leverage, and the risk profiles and other characteristics of the AIFs the applicant manages or intends to manage, including information about the ... third countries in which AIFs are established or are expected to be established; and

(f) information on where the master AIF is established if an AIF that the applicant manages or intends to manage is a feeder AIF.

(9) Paragraph (10) applies if—

(a) any of the information required under implementing provisions relating to Articles 7.2(e) and 7.3(c) to 7.3(e) of the directive (information to be provided in application for authorisation) was missing from the application; and

(b) the Part 4A permission is given less than one month after the applicant supplied the missing information.

(10) The Part 4A permission is to be treated as given one month after the applicant submitted the missing information.

Section 6 Supplementary provisions about AIFMs

(1) If a full-scope UK AIFM that is an external AIFM is unable to ensure compliance by an AIF it manages, or by another entity on the AIF's behalf, with an implementing provision for which the AIF is responsible, the AIFM must immediately inform—

(a) the FCA, ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

about the non-compliance.

(2) The FCA must require the AIFM to take steps to remedy the situation.

(3) If the non-compliance persists despite the steps mentioned in paragraph (2) being taken, the FCA must—

(a) require the AIFM to cease acting as manager of that AIF ; and

(b) require the AIFM to stop marketing the AIF; ...

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The FCA may use its powers under section 55J and 55L of the Act (variation or cancellation on initiative of regulator and imposition of requirement by the FCA) to impose the requirements mentioned in paragraphs (2) and (3), but this paragraph does not limit the powers of the FCA.

Section 7 Changes in conditions relevant to authorisation

(1) This regulation applies where a full-scope UK AIFM has notified the FCA of any material changes to the conditions for initial authorisation in accordance with rule 15.3.26 of the Supervision sourcebook .

(2) If the FCA decides to exercise any power so as to prevent the implementation of, or impose restrictions in relation to, the proposed changes, it must inform the AIFM within one month of receiving the notification mentioned in paragraph (1).

(3) The FCA may prolong the period of one month referred to in paragraph (2) by up to another month, if it considers this to be necessary because of the specific circumstances of the case, and after having notified the AIFM accordingly.

(4) If the FCA does not inform the AIFM of a decision under paragraph (2) within the period of one month mentioned in paragraph (2) or any extension thereof under paragraph (3), the AIFM may implement the changes.

Section 8 Notification to ESMA

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Section 9 Meaning of “small AIFM”

(1) “ Small AIFM ” means an AIFM which is the AIFM of portfolios of AIFs, the value of whose assets under management, calculated in accordance with Article 2 of the Commission Delegated Regulation—

(a) does not exceed 500 million euros in total in cases where the portfolios of AIFs consist of AIFs that are unleveraged and have no redemption rights exercisable during a period of 5 years following the date of initial investment in each AIF; or

(b) does not exceed 100 million euros in total in other cases, including any assets acquired through the use of leverage.

(2) For the purposes of paragraph (1), an AIFM may be the AIFM of an AIF whether it manages the AIF directly, or indirectly through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding.

(3) The assets under management by an AIFM are not to be considered to have exceeded the relevant threshold in paragraph (1) in a situation falling within Article 4.3 of the Commission Delegated Regulation (exceeding the threshold: temporary situation).

(4) A SEF Manager or a RVECA Manager may be both a small registered UK AIFM and a small authorised UK AIFM.

Section 10 Small registered UK AIFMs

(1) The FCA must keep a register of small registered UK AIFMs, and must enter an AIFM on the register if the conditions in paragraph (2), (3) or (4) are met.

(2) The conditions in this paragraph are that—

(a) the AIFM is—

(i) a UK AIFM;

(ii) a small AIFM;

(iii) the internal AIFM of an AIF that is a body corporate and is not a collective investment scheme; and

(iv) not an external AIFM;

(b) none of the individuals responsible for the management or operation of the AIFM—

(i) has been convicted of any offence involving fraud or dishonesty, or any indictable offence, and for this purpose “ offence ” includes any act or omission which would have been an offence if it had taken place in the United Kingdom; or

(ii) is subject to a prohibition order; and

(c) grounds do not exist which would permit or require a court to make a disqualification order within the meaning of section 1(1) of the Company Directors Disqualification Act 1986 against an individual responsible for the management or operation of the AIFM.

(3) The conditions in this paragraph are that—

(a) the AIFM is—

(i) a UK AIFM; and

(ii) a small AIFM;

(b) each AIF managed by the AIFM—

(i) is a collective investment scheme;

(ii) is not an authorised unit trust scheme, an authorised open-ended investment company or an authorised contractual scheme (as each is defined in section 237(3) of the Act);

(iii) holds the majority of its assets as land as described in paragraph (7), but this condition does not apply during the first 180 days and the last 180 days of the period during which the undertaking is an AIF; and

(iv) subject to paragraph (8), does not hold any investment of a kind specified for the purposes of section 22 of the Act (regulated activities) ;

(c) each AIF managed by the AIFM is operated, or will be established and operated, by a person with a Part 4A permission to carry on the regulated activity of establishing, operating or winding up a collective investment scheme; and

(d) none of the individuals responsible for the management or operation of the AIFM—

(i) has been convicted of any offence involving fraud or dishonesty, or any indictable offence, and for this purpose “ offence ” includes any act or omission which would have been an offence if it had taken place in the United Kingdom; or

(ii) is subject to a prohibition order.

(4) The conditions in this paragraph are that the AIFM—

(a) is a UK AIFM;

(b) is a small AIFM; and

(c) has applied for registration as a SEF Manager or a RVECA Manager , and meets the conditions for such registration.

(5) The FCA may—

(a) keep the register of small registered UK AIFMs in any form it thinks fit;

(b) include on the register such information as the FCA considers appropriate; and

(c) exploit commercially the information contained in the register, or any part of that information.

(6) The FCA must—

(a) publish the register on a regular basis; and

(b) provide a certified copy of the register, or any part of it, to any person who asks for it—

(i) on payment of the fee (if any) fixed by the FCA; and

(ii) in a form in which it is legible to the person asking for it.

(7) For the purposes of paragraphs (3)(b)(iii) and (8), an AIF holds land if it holds such land either directly, or indirectly through an entity that meets the conditions in paragraph (3)(b)(ii) to (iv).

(8) For the purposes of paragraph (3)(b)(iv), an investment held by an AIF is not to be considered an investment of a kind specified for the purposes of section 22 of the Act if it is—

(a) an investment of the type specified by article 75 of the Regulated Activities Order (contracts of insurance) which relates to land held by the AIF;

(b) an investment of the type specified by article 76 of the Regulated Activities Order (shares etc. ) through which the AIF holds land.

Section 11 Applications for entry on register of small registered UK AIFMs

(1) An application for entry on the register of small registered UK AIFMs must—

(a) be made in such manner as the FCA may direct; and

(b) contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

(2) At any time after receiving an application and before determining it, the FCA may require the applicant to provide it with such further information as it considers necessary to enable it to determine the application.

(3) Different directions may be given, and different requirements imposed, in relation to different applications or categories of applications.

(4) The FCA may require an applicant to provide information which it is required to give under this regulation in such form, or to verify it in such manner, as the FCA may specify.

(5) This regulation does not apply in relation to an application for registration as a SEF Manager or a RVECA Manager .

Section 12 Determination of applications

(1) The FCA must determine an application for entry on the register of small registered UK AIFMs before the end of the period of three months beginning with the date on which it receives the completed application.

(1A) Paragraph (1) does not apply in relation to an application for registration as a SEF Manager or a RVECA Manager (in respect of which see Article 15(4) of the EuSEF Regulation or Article 14(4) of the EuVECA Regulation).

(2) The FCA may determine an incomplete application if it considers it appropriate to do so; and it must in any event determine such an application within six months beginning with the date on which it first receives the application.

(3) If the FCA decides to enter an AIFM on the register, it must give written notice of its determination to the applicant.

Section 13 Procedure when refusing an application

(1) If the FCA proposes to refuse an application made under regulation 11(1) , Article 15 or 15a of the EuSEF Regulation or Article 14 or 14a of the EuVECA Regulation it must give the applicant a warning notice.

(2) If the FCA decides to refuse an application—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

(3) If the FCA has not determined an application made under Article 15 or 15a of the EuSEF Regulation or Article 14 or 14a of the EuVECA Regulation before the end of the period of two months starting with the date on which the applicant has provided all the information required by the FCA in connection with the application—

(a) the FCA is to be treated as having refused the application, and

(b) the applicant may refer the matter to the Tribunal.

Section 14 Notification of new funds under the EuSEF Regulation or the EuVECA Regulation

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Section 15 Small registered AIFMs ceasing to meet the requirements for registration

(1) If a small registered UK AIFM ceases to meet any of the conditions in regulation 10(2)(a)(i), (iii) or (iv) or (b)(i) or (c), (3)(a)(i), (b), (c) or (d)(i), or (4)(a) ..., it must inform the FCA immediately.

(2) If proceedings begin against an individual responsible for the operation or management of a small registered UK AIFM registered pursuant to the conditions in regulation 10(2) for a disqualification order or disqualification undertaking under the Company Directors Disqualification Act 1986, the AIFM must inform the FCA immediately.

(3) Paragraph (4) applies if a small registered UK AIFM registered pursuant to the conditions in regulation 10(2) or (3)—

(a) does not comply with the requirement at Article 4.2 of the Commission Delegated Regulation (exceeding the threshold: situation not temporary) to apply for a Part 4A permission to carry on the regulated activity of managing an AIF; and

(b) does not appoint a person with such permission to act as AIFM of the AIF within the period mentioned in Article 4.2 of that Regulation.

(4) The AIFM's registration, to the extent that it was granted pursuant to the conditions in regulation 10(2) or (3), is treated as revoked upon the expiry of the period mentioned in Article 4.2 of the Commission Delegated Regulation.

Section 16 Applications for revocation of registration

(1) A small registered UK AIFM may apply to the FCA for its registration to be revoked, and for a Part 4A permission to carry on the regulated activity of managing an AIF.

(2) In its application, a small registered UK AIFM may apply to become—

(a) a small authorised UK AIFM; or

(b) a full-scope UK AIFM ....

Section 17 Grounds for revocation of registration

(1) Subject to paragraph (2), the FCA may revoke the registration of a small registered UK AIFM, including its registration under Article 15 of the EuSEF Regulation or Article 14 of the EuVECA Regulation, if—

(a) the AIFM does not meet a condition in regulation 10(2), (3) or, as the case may be, (4) (a) or (b) ;

(b) the AIFM has contravened an implementing provision ... that applies to it;

(c) the AIFM applies for or consents to the revocation of its registration;

(d) the AIFM is wound up; or

(e) a fee due in respect of the registration has not been paid.

(2) If an AIFM applies to the FCA for permission in accordance with regulation 16(2)(b), the FCA may not revoke the registration of the AIFM on the ground that the AIFM is not a small AIFM until the FCA has determined the AIFM's application.

Section 18 Procedure on revocation

(1) If the FCA proposes to revoke the registration of a small registered UK AIFM on the grounds mentioned in regulation 17(1)(a) or (b) , or under Article 22 of the EuSEF Regulation or Article 21 of the EuVECA Regulation , the FCA must give the AIFM a warning notice.

(2) If the FCA decides to revoke the registration of a small registered UK AIFM on such grounds or under such an Article —

(a) the FCA must give the AIFM a decision notice, and

(b) the AIFM may refer the matter to the Tribunal.

Section 19 Grounds for suspension of registration

(1) If one of the grounds in paragraph (2) is met, the FCA may suspend the registration of a small registered UK AIFM for a specified period, until the occurrence of a specified event, or until specified conditions are complied with.

(2) The grounds are that it appears to the FCA that—

(a) the AIFM does not meet a condition in regulation 10(2), (3) or, as the case may be, (4);

(b) the AIFM has contravened, or is likely to contravene, an implementing provision, or a requirement imposed by the EuSEF Regulation or the EuVECA Regulation, that applies to it.

(3) In this regulation “ specified ” means specified by the FCA in a notice given under regulation 20.

Section 20 Procedure on suspension

(1) The suspension of the registration of a small registered UK AIFM takes effect—

(a) immediately, if the notice given under paragraph (3) states that that is the case;

(b) on such date as may be specified in the notice; or

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A suspension may be expressed to take effect immediately or on a specified date only if the FCA, having regard to the ground on which it is exercising its power under regulation 19, considers that it is necessary for the suspension to take effect immediately or on that date.

(3) If the FCA proposes to suspend a registration, or suspends a registration with immediate effect—

(a) it must give written notice to the AIFM; and

(b) the AIFM may refer the matter to the Tribunal.

(4) A notice given under paragraph (3)(a) must state—

(a) the details of the suspension;

(b) when the suspension takes effect;

(c) the FCA's reasons for imposing the suspension and for its determination as to when the suspension takes effect;

(d) that the AIFM to whom it is given may make representations to the FCA within such period as may be specified in it (whether or not it has referred the matter to the Tribunal); and

(e) that the AIFM has the right to refer the matter to the Tribunal.

(5) The FCA may extend the period allowed under the notice for making representations.

(6) Having considered any representations made by the AIFM to whom the notice was given—

(a) the FCA must give written notice to the AIFM as to whether it decides—

(i) to make the suspension in the way proposed (or, if the suspension has already been imposed, not to revoke the suspension),

(ii) to make the suspension in a way other than that proposed (or, if the suspension has already been imposed, to amend the suspension), or

(iii) not to make the suspension (or, if the suspension has already been imposed, to revoke the suspension); and

(b) unless the FCA decides not to make, or to revoke, the suspension, the AIFM may refer the matter to the Tribunal.

(7) For the purposes of paragraph (1)(c), section 391(8) of the Act (publication) applies as if a notice under paragraph (3)(a) or (6)(a) were a supervisory notice.

Section 21 Disclosure obligations of small registered UK AIFMs

(1) A small registered UK AIFM must provide the FCA with such information as the FCA may direct under paragraph (2) or (3).

(2) The FCA may direct that a small registered UK AIFM must provide information on—

(a) the main instruments in which the AIFM trades, and

(b) the principal exposures and most important concentrations of the AIFs that it manages,

in order to enable the FCA to monitor systemic risk effectively.

(3) The FCA may direct that a small registered UK AIFM must provide information in relation to its compliance with—

(a) the implementing provisions,

(b) the EuSEF Regulation, or

(c) the EuVECA Regulation,

in order to enable the FCA to discharge its supervisory obligations.

(4) Information provided under paragraph (1) must be given at such times and in such manner, and verified in such manner, as the FCA may direct.

Section 22 Power to direct small registered UK AIFMs and SEF and RVECA Managers to take appropriate measures

(1) The FCA may direct a small registered UK AIFM to take such specified steps as are necessary for the purpose of securing its compliance with—

(a) an implementing provision,

(b) the EuSEF Regulation, or

(c) the EuVECA Regulation.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) An AIFM must comply with any direction given to it by the FCA under paragraph (1) ....

(4) Sections 55Y (exercise of own-initiative power: procedure) and 55Z3(2) (right to refer matters to the Tribunal) of the Act apply to a direction to an AIFM under paragraph (1) or (2) as they apply to a requirement imposed on an authorised person under section 55L(3) of the Act (imposition of requirements by the FCA).

Section 23 Application of FCA rules to small authorised UK AIFMs

(1) Notwithstanding the powers of the FCA under the Act, the FCA may not make a rule of a kind specified for the purposes of this regulation to the extent that such rule applies to a small authorised UK AIFM.

(2) A rule of a kind specified for the purposes of this regulation that was made by the FCA before 22nd July 2013 does not apply to a small authorised UK AIFM.

(3) Subject to paragraph (4), a rule is of a kind specified for the purposes of this regulation if it—

(a) is made by the FCA for the purposes of implementing the directive; or

(b) has the same effect as a provision in the Commission Delegated Regulation.

(4) A rule is not of a kind specified for the purposes of this regulation to the extent that—

(a) it is an implementing provision relating to Article 3 of the directive;

(b) it applied to the AIFM in respect of the management of an AIF immediately before 22nd July 2013, or would so have applied if the AIFM had managed the AIF at that time; or

(c) it has the same effect as a rule which falls within sub-paragraph (b).

(5) This regulation ceases to have effect on 22nd July 2015.

Section 23A Manner of application for UK LTIF authorisation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 23B Procedure in relation to the refusal of an application for UK LTIF authorisation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 23C Procedure in relation to the revocation of UK LTIF authorisation otherwise than by consent

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 23D Manner of application for registration of a qualifying social entrepreneurship fund or qualifying venture capital fund

(1) An application for registration of a qualifying social entrepreneurship fund under Article 15a of the EuSEF Regulation, or of a qualifying venture capital fund under Article 14a of the EuVECA Regulation, must—

(a) be made in such a manner as the FCA may direct; and

(b) contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

(2) At any time after receiving an application and before determining it, the FCA may require the applicant to provide it with such further information as it considers necessary to enable it to determine the application.

(3) Different directions may be given, and different requirements imposed, in relation to different applications or categories of applications.

(4) The FCA may require an applicant to provide information which it is required to give under paragraph (1)(b) or paragraph (2) of this regulation in such form, or to verify it in such manner, as the FCA may specify.

Section 23E Procedure in relation to the refusal of an application for registration of a qualifying social entrepreneurship fund or qualifying venture capital fund

(1) If the FCA proposes to refuse an application made by a UK AIFM for registration of a qualifying social entrepreneurship fund under Article 15a of the EuSEF Regulation, or of a qualifying venture capital fund under Article 14a of the EuVECA Regulation, it must give the applicant a warning notice.

(2) If the FCA decides to refuse an application—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

Section 23F Procedure in relation to the revocation of registration of a qualifying social entrepreneurship fund or qualifying venture capital fund otherwise than by consent

(1) If the FCA proposes to revoke the registration of a qualifying social entrepreneurship fund or a qualifying venture capital fund otherwise than by consent, the FCA must give separate warning notices to the AIFM and the depositary of the qualifying social entrepreneurship fund or qualifying venture capital fund.

(2) If the FCA decides to revoke the registration of a qualifying social entrepreneurship fund or a qualifying venture capital fund otherwise than by consent—

(a) the FCA must give each of the AIFM and the depositary a decision notice; and

(b) either of them may refer the matter to the Tribunal.

Section 23G Manner of application for MMF authorisation

(1) An application for an AIF to be authorised as an MMF under Article 5 of the MMF Regulation must—

(a) be made in such a manner as the FCA may direct; and

(b) contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

(2) At any time after receiving an application and before determining it, the FCA may require the applicant to provide it with such further information as it considers necessary to enable it to determine the application.

(3) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.

(4) The FCA may require an applicant to provide information which it is required to give under paragraph (1)(b) or paragraph (2) in such form, or to verify it in such manner, as the FCA may specify.

Section 23H Procedure in relation to the refusal of an application for MMF authorisation

(1) If the FCA proposes to refuse an application made in respect of an AIF for authorisation as an MMF under Article 5 of the MMF Regulation, it must give the applicant a warning notice.

(2) If the FCA decides to refuse an application—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

Section 23I Procedure in relation to the revocation of MMF authorisation otherwise than by consent

(1) If the FCA proposes to revoke the authorisation of an MMF otherwise than by consent, the FCA must give separate warning notices to the AIFM and the depositary of the MMF.

(2) If the FCA decides to revoke the authorisation of an MMF otherwise than by consent—

(a) the FCA must give each of the AIFM and the depositary a decision notice; and

(b) either of them may refer the matter to the Tribunal.

Section 24 Valuation

(1) An external valuer must carry out the valuation function described in section 3.9 of the Investment Funds sourcebook impartially, and with all due skill, care and diligence.

(2) An external valuer may not delegate such valuation function to a third party.

(3) If the FCA considers the appointment of an external valuer does not comply with the implementing provisions, the FCA may require that another external valuer be appointed instead.

(4) Any liability of a full-scope UK AIFM to an AIF managed by it, or to an investor of such an AIF, arising out of the AIFM's responsibility for the proper valuation of AIF assets, the calculation of the net asset value of the AIF and the publication of that net asset value, is not affected by the appointment by the AIFM of an external valuer in respect of that AIF.

(5) Irrespective of any contractual arrangements that provide otherwise, an external valuer is liable to the AIFM of an AIF in respect of which the external valuer is appointed for any losses suffered by the AIFM as a result of the external valuer's negligence or intentional failure to perform its tasks.

Section 25 Disqualification of external valuer

(1) If it appears to the FCA that an external valuer has failed to comply with an implementing provision applicable to it, it may disqualify the valuer from acting as an external valuer, or from so acting for any particular class of AIFs.

(2) If the FCA proposes to disqualify a valuer under this section, it must give the valuer a warning notice.

(3) If the FCA decides to disqualify a valuer—

(a) it must give the valuer a decision notice; and

(b) the valuer may refer the matter to the Tribunal.

(4) The FCA may remove any disqualification imposed under this regulation if satisfied the disqualified person will in future comply with the implementing provisions.

Section 26 Approval for delegation of functions by full-scope UK AIFMs

(1) A full-scope UK AIFM may not delegate its functions of portfolio management or risk management for an AIF to an undertaking, and that undertaking may not sub-delegate such function to another undertaking, unless—

(a) the undertaking to whom the functions are to be delegated or sub-delegated falls within paragraph (2); or

(b) the FCA has approved such delegation or sub-delegation.

(2) An undertaking falls within this paragraph if it is—

(a) authorised or registered for the purpose of asset management; and

(b) subject to supervision in relation to its asset management function.

(3) An application for approval under paragraph (1)(b)—

(a) must be made in such manner as the FCA may direct; and

(b) must contain or be accompanied by such information as the FCA may reasonably require for the purposes of determining the application.

(4) At any time after receiving an application and before determining it, the FCA may require the applicant to provide it with such further information as it considers necessary to enable it to determine the application.

(5) An application under paragraph (3) must be determined by the FCA within one month of receiving the completed application.

(6) The FCA may determine an incomplete application if it considers it appropriate to do so; and it must in any event determine such an application within two months of receiving the application.

(7) If the FCA proposes to refuse an application under paragraph (3) it must give the applicant a written notice.

(8) If the FCA decides to refuse an application under paragraph (3)—

(a) it must give the applicant a written notice explaining its reasons for the decision; and

(b) the applicant may refer the matter to the Tribunal.

Section 27 Revocation of approval for delegation

(1) The FCA may revoke its approval granted under regulation 26.

(2) If the FCA proposes to revoke its approval it must give the applicant a warning notice.

(3) If the FCA decides to revoke its approval—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

Section 28 Liability following delegation ...

(1) Irrespective of any contractual arrangements that provide otherwise, any liability of a full-scope UK AIFM to an AIF it manages, or to an investor of such an AIF, is not affected by—

(a) the delegation of functions by the AIFM to a third party (“a delegate”);

(b) any sub-delegation of such functions by the delegate to another person (“a sub-delegate”); or

(c) any further sub-delegation of such functions by a sub-delegate.

(2) A delegate or sub-delegate which has delegated or sub-delegated such functions must review on an ongoing basis the services provided by the person to whom functions have been delegated or sub-delegated.

Section 29 Depositary liability: general provisions

(1) This regulation and regulations 30 to 32 apply in relation to the depositary of a UK AIF managed by a full-scope UK AIFM or a Gibraltar AIFM .

(2) Any obligation or liability of a depositary under regulation 30 or 31 to the investors of the AIF may be invoked directly or indirectly through the AIFM, depending on the nature of the legal relationship between the depositary, the AIFM and the investors.

(3) For the purposes of regulations 30 to 32, the provision of services as specified by the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 by a designated system (within the meaning of regulation 2(1) of those Regulations) , or the provision of similar services by a third-country securities settlement system, is not to be considered a delegation of custody functions.

Section 30 Depositary liability for loss of financial instruments held in custody

(1) This regulation applies where a financial instrument held in custody in accordance with rule 3.11.21 of the Investment Funds sourcebook by the depositary or a third party to whom the custody has been delegated or sub-delegated is deemed to have been lost under Article 100 of the Commission Delegated Regulation.

(2) Subject to paragraphs (3) and (4), the depositary must return a financial instrument of the identical type or the corresponding amount to the AIF, or the AIFM acting on behalf of the AIF, without undue delay.

(3) The depositary is not required to comply with the obligation in paragraph (2) if it can prove that the loss arose as a result of an external event beyond the depositary's reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary.

(4) The depositary is not required to comply with the obligation in paragraph (2) if it can prove that—

(a) the lost financial instrument was held in custody by a third party;

(b) the depositary had delegated its functions to the third party in accordance with rule 3.11.28 of the Investment Funds sourcebook ;

(c) a written contract between the depositary and the third party—

(i) expressly transfers the obligation in paragraph (2) to the third party; and

(ii) enables the AIF, or the AIFM acting on behalf of the AIF, to make a claim against the third party in respect of the loss of the financial instrument, or for the depositary to make such a claim on their behalf; and

(d) a written contract between the depositary and the AIF, or the AIFM acting on behalf of the AIF, expressly allows a transfer of the depositary's obligation in paragraph (2) and establishes an objective reason for the transfer.

(5) A third party (“A”) to which custody of a financial instrument has been delegated and to which the obligation in paragraph (2) has been transferred in accordance with paragraph (4) is not required to return a financial instrument of the identical type or corresponding amount to the AIF, or the investors of the AIF, if it can prove that—

(a) the lost financial instrument was held in custody by another third party (“B”);

(b) A had sub-delegated its functions to B in accordance with rule 3.11.28 of the Investment Funds sourcebook ;

(c) a written contract between A and B—

(i) expressly transfers from A to B the obligation to return a financial instrument of the identical type or corresponding amount to the AIF, or the investors of the AIF; and

(ii) enables the AIF, or the AIFM acting on behalf of the AIF, to make a claim against B in respect of the loss of the financial instrument, or for the depositary to make such a claim on their behalf; and

(d) a written contract between A and the depositary expressly allows a transfer of A's obligation to return a financial instrument of the identical type or corresponding amount to the AIF, or the investors of the AIF, and establishes an objective reason for the transfer.

(6) Irrespective of any contractual arrangements that provide otherwise, but subject to paragraphs (4) and (5) and regulation 32(2), the obligation of the depositary under paragraph (2) or of a third party as referred to in paragraph (4)(c) or (5)(c) is not affected by any delegation by the depositary or sub-delegation by the third party of the functions referred to in rules 3.11.21 and 3.11.23 of the Investment Funds sourcebook .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 31 Depositary liability for other losses

(1) If an AIF, or investors of an AIF, have suffered losses other than the loss by the depositary or a third party to which custody has been delegated or sub-delegated of financial instruments held in custody in accordance with rule 3.11.21 of the Investment Funds sourcebook , the depositary is liable to the AIF, or investors of the AIF, if the losses are a result of the depositary's negligent or intentional failure to comply with an implementing provision that applies to it.

(2) Irrespective of any contractual arrangements that provide otherwise, any liability of the depositary to the AIF, or to investors of the AIF, under paragraph (1) is not affected by any delegation by the depositary of the functions referred to in rules 3.11.21 and 3.11.23 of the Investment Funds sourcebook .

Section 32 Depositary liability and third country custodians

(1) This regulation applies where—

(a) the law of a third country requires certain financial instruments to be held in custody by a local entity; and

(b) there is no local entity that satisfies the delegation requirements in rule 3.11.28(4)(b) of the Investment Funds sourcebook .

(2) The depositary is not required to comply with the obligation in regulation 30(2) in relation to the financial instruments mentioned in paragraph (1)(a) if—

(a) the rules or instruments of incorporation of the AIF concerned expressly allow for a discharge of the obligation;

(b) the investors of the AIF were informed of the discharge and of the circumstances justifying the discharge prior to their investment;

(c) the AIF, or the AIFM on behalf of the AIF, instructed the depositary to delegate the custody of the financial instruments to a local entity;

(d) a written contract between the depositary and the AIF, or the AIFM acting on behalf of the AIF, expressly allows for such a discharge; and

(e) a written contract between the depositary and the local entity expressly transfers the obligation of the depositary to the local entity and enables the AIF, or the AIFM acting on behalf of the AIF, to make a claim against the local entity in respect of the loss of financial instruments or for the depositary to make such a claim on their behalf.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 33 Management of third country AIFs

A full-scope UK AIFM may manage a third county AIF that is not marketed in the United Kingdom or Gibraltar only if appropriate cooperation arrangements are in place between the FCA and the supervisory authorities of the third country where the AIF is established in order to ensure an efficient exchange of information that enables the FCA to carry out its duties in accordance with the Financial Services and Markets Act 2000, these Regulations, and any EU tertiary legislation made under the directive which forms part of assimilated law .

Section 34 Introductory provision

In this Part, a reference to an AIFM is to—

(a) a full-scope UK AIFM; or

(b) a third country AIFM to which the requirement at regulation 59(3) applies, with respect to the AIFs by virtue of which that requirement applies.

Section 35 Ways of acquiring control or shares

(1) This Part applies where control is acquired of a non-listed company or issuer in one of the following ways—

(a) one AIF acquires control individually;

(b) two or more AIFs, managed by the same AIFM, acquire control jointly on the basis of an agreement aimed at acquiring such control; or

(c) two or more AIFs, managed by two or more AIFMs, acquire control jointly on the basis of an agreement aimed at acquiring such control.

(2) This Part also applies where an AIF acquires, holds or disposes of shares of a non-listed company (but control is not acquired).

(3) This Part does not apply where the non-listed company or issuer is—

(a) a small or medium-sized enterprise within the meaning of Article 2(1) of the Annex to Commission Recommendation 2003/361/ EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises ; or

(b) a special purpose vehicle with the purpose of purchasing, holding or administering real estate.

Section 36 Meaning of “control” and calculation of voting rights

(1) For the purposes of this Part, “ control ” means—

(a) for a non-listed company, holding more than 50% of the voting rights of the company; and

(b) for an issuer, holding the percentage of voting rights that confers control in the United Kingdom, calculated in accordance with rules made by the Panel on Takeovers and Mergers under the Companies Act 2006.

(2) When calculating the percentage of voting rights for the purposes of this Part, if paragraph (1)(b) does not apply, in addition to the voting rights held directly by the AIF, the voting rights of the following are included—

(a) an undertaking controlled by the AIF; and

(b) a person acting in their own name but on behalf of the AIF or on behalf of an undertaking controlled by the AIF.

(3) For the purposes of this Part, if paragraph (1)(b) does not apply, voting rights are calculated on the basis of all the shares to which voting rights are attached even if the exercise of those rights is suspended.

Section 37 Confidential information

(1) This regulation applies to—

(a) employees of a non-listed company or issuer,

(b) representatives of the employees, and

(c) experts who assist the employees or representatives,

who receive information in accordance with this Part, or corresponding provisions adopted in an EEA State ... implementing Articles 26 to 30 of the directive (obligations for AIFMs managing AIFs which acquire control of non-listed companies and issuers).

(2) If the information mentioned in paragraph (1) is provided in confidence—

(a) regulation 25 of the Information and Consultation of Employees Regulations 2004 (breach of statutory duty), or

(b) regulation 25 of the Information and Consultation of Employees Regulations (Northern Ireland) 2005 (breach of statutory duty),

applies to the information as it applies to information or documents given in confidence by an employer pursuant to the employer's obligations under those Regulations.

Section 38 Notification of the acquisition or disposal of major holdings and control of non-listed companies

(1) When an AIF acquires, disposes of, or holds shares of a non‑listed company, the AIFM managing the AIF must notify the FCA of the proportion of voting rights of the non-listed company held by the AIF any time when that proportion reaches, exceeds or falls below the thresholds of 10%, 20%, 30%, 50% and 75%.

(2) When an AIF acquires control of a non-listed company, the AIFM managing the AIF must notify the following persons of such control—

(a) the non-listed company;

(b) the company's shareholders of which the identities and addresses are available to the AIFM or can be made available by the company or through a register to which the AIFM has or can obtain access; and

(c) the FCA.

(3) The notification required under paragraph (2) must contain the following additional information—

(a) the resulting situation in terms of voting rights in the company;

(b) the conditions subject to which control was acquired, including information about the identity of the different shareholders involved, any person entitled to exercise voting rights on their behalf and, if applicable, the chain of undertakings through which voting rights are effectively held; and

(c) the date on which control was acquired.

(4) The AIFM must—

(a) in its notification to the non-listed company, request the board of directors of the company to inform the employees' representatives or, where there are none, the employees themselves, without undue delay of the acquisition of control by the AIF and of the information in paragraph (3); and

(b) use its best efforts to ensure the board of directors complies with its request.

(5) The notifications required under this regulation by an AIFM must be made as soon as possible, and in any event no later than ten working days after the date on which the AIF reaches, exceeds or falls below the relevant threshold or acquires control over the non-listed company.

Section 39 Disclosure in case of acquisition of control

(1) When an AIF acquires control of a non‑listed company or an issuer, the AIFM managing the AIF must make available the information in paragraph (2) to—

(a) the company or issuer;

(b) the shareholders of the company or issuer of which the identities and addresses are available to the AIFM or can be made available by the company or issuer or through a register to which the AIFM has or can obtain access; and

(c) the FCA.

(2) The information is—

(a) the identity of the AIFM which either individually or in agreement with other AIFMs manages the AIF or AIFs that have acquired control;

(b) the policy for preventing and managing conflicts of interest, in particular between—

(i) the AIFMs or the AIFs, and

(ii) the company or issuer;

(c) the specific safeguards to ensure that any agreement between—

(i) the AIFMs or the AIFs, and

(ii) the company or issuer,

is concluded at arm's length; and

(d) the policy for external and internal communication relating to the company or issuer, in particular as regards employees of the company or issuer.

(3) The AIFM must—

(a) in its notification to the company or issuer, request the board of directors of the company to give the employees' representatives or, where there are none, the employees themselves, without undue delay the information in paragraph (2); and

(b) use its best efforts to ensure that the board of directors complies with its request.

Section 40 Additional disclosure when control is acquired of non-listed companies

(1) When an AIF acquires control of a non‑listed company, the AIFM managing the AIF must ensure that within a period of 20 working days starting on the day on which control is acquired the AIF, or the AIFM acting on behalf of the AIF, discloses its intentions with regard to the matters in paragraph (2) to—

(a) the non-listed company; and

(b) the shareholders of the non-listed company of which the identities and addresses are available to the AIFM or can be made available by the non-listed company or through a register to which the AIFM has or can obtain access.

(2) The matters are the future business of the non‑listed company and the likely repercussions on employment by the company, including any material change in the conditions of employment.

(3) The AIFM must—

(a) request that the board of directors of the non-listed company notifies the employees' representatives or, where there are none, the employees themselves, about the AIF's intentions with regard to the matters in paragraph (2); and

(b) use its best efforts to ensure the board of directors complies with its request.

(4) When an AIF acquires control of a non-listed company, the AIFM managing the AIF must provide the FCA and the AIF's investors with information on the financing of the acquisition.