UK lays out roadmap for Overseas Funds Regime

European funds can seek longer-term access to the UK market from later this year, according to a new OFR roadmap released by HM Treasury and the Financial Conduct Authority. 

Managers should start expecting landing slots to transition existing TMPR UCITS funds into the OFR from the second half of 2024 until September 2026. Each landing slot will be for three months and the roadmap indicates that managers will be contacted by alphabetical order of name. Additionally, EEA UCITS funds that are not currently in the TMPR will also be able to enter the OFR from September 2024. This timeline does not apply to EEA money market funds (MMFs), as they have still not been recognised as equivalent by the UK authorities. 

A key question for the market is whether the UK's sustainability disclosure regime (SDR) will also be extended to apply to OFR funds. The roadmap today does not confirm the policy position but does set out the timeline for that decision to be made. A consultation paper is expected in Q3 2024.

The announcement today will also be very impactful for UK distributors who will need to keep track of which EEA TMPR funds on their platform enter the OFR and those which do not. Any TMPR EEA UCITS funds that do not enter the OFR by the end of their landing slot will cease to be UK-recognised and will be restricted from being sold to the broad UK retail market.