Overseas Fund Regime (OFR)

The Overseas Funds Regime (‘OFR’) was introduced so that funds domiciled in countries in the European Economic Area (‘EEA’) could continue to be made available to retail client investors in the UK.

Overseas funds that are offered to retail clients

Overseas or offshore funds potentially carry more risk to investors than those based onshore in the UK.

This is partly because if things go wrong with the fund, or with the parties involved in running the fund, investors may not have the same rights as owning onshore funds. For example, investors may not be able to complain or seek compensation from UK financial compensation schemes.

Where there is more risk to investors, fund operators (i.e. the companies with overall responsibility for the management of the funds) need to communicate the details of those risks to enable investors to make an informed decision.

Obtaining relevant disclosure for an OFR fund

All operators of OFR-recognised EEA funds must provide investors with a Key Investor Information Document (‘KIID’), which contains critical information about the fund.

You will receive a copy of the KIID as part of the application process for investing in a fund registered under OFR.

As a potential investor in an OFR-recognised fund, you must be provided with the following information by the fund operator, either within their KIID or in additional fund documentation issued by them:

• Whether the UK Financial Ombudsman Service (FOS) is likely to be able to consider complaints against the fund, its operator, or its depositary (the company responsible for the safekeeping of the fund’s assets);
• If there are arrangements to enable investors in the UK to have a complaint considered against the fund, its operator or its depositary by an alternative dispute resolution mechanism in the state in which the fund, operator or depository is based (its ‘Home State’);
• The activities of the overseas fund scheme operator and depository are unlikely to be covered by the UK’s regulatory system and compensation scheme (FSCS), and that investors may not be protected; and
• If arrangements exist in the Home States of the fund operator or its depository that enable investors in the UK to receive compensation from those parties, should either be unable to meet their liabilities to investors.

If you require information on the specific arrangements in place for a fund you intend to purchase, we suggest that you contact the fund operator for copies of the relevant additional fund documentation. Their contact details can be found on the KIID.

If you have any further questions, we recommend you contact the fund operator directly.

A list of funds that are now registered under OFR is available within the spreadsheet linked below:

Funds registered under OFR