FCA reveals details of Ucis marketing ban

Enterprise investment schemes, venture capital trusts and ETFs are among the fund structures exempt from the FCA’s ban on the marketing of Unregulated Collective Investment Schemes (Ucis) to retail investors, much to the relief of industry experts.

FCA reveals details of Ucis marketing ban


The FCA today released details of the ban, which restricts the marketing of Ucis, qualified investment schemes, traded life policy investments and certain substitutes known as Non-Mainstream Pooled Investments (NMPIs) to sophisticated investors and high net worth individuals.

The move is the result of an investigation by the FSA which found that just one in four Ucis fund sales advised by an IFA was suitable for the client. The research also found many promotions breached existing marketing restrictions.


Guy Myles, managing director of Octopus Investments, said: “We were delighted to hear the outcome of the FCA review of the promotion of Ucis today, with confirmation that EIS and VCTs are among those investments that will remain outside the scope of the ban.

“In making this decision, the FCA has accepted that there’s a fundamental difference between what it considers to be risky, unregulated investment products and those it sees as being ‘higher risk’ in nature, but which already have strong corporate governance measures in place.”

Other Exemptions

Overseas investment companies that would meet the criteria for investment trust status if based in the UK, real estate investment trusts (REITs) are also exempt from the ban, as are special purpose vehicles pooling investment primarily in shares and bonds provided communications are fair, clear and not misleading.

Susan McDonald, Chairman of EIS fund manager Calculus Capital, said: “Imposing a blanket ban on the promotion of all EIS to retail investors would have been heavy-handed and we are pleased to see that the FCA has been more measured in its final decision.

“There is arguably a place for EIS funds in the investment portfolios of a wide range of investors; as long as the risks have been properly explained to them and they understand the nature of the investment.”



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