UK Law and Practice Contributed by: Sam Kay, Philippa List, Mark Stapleton and Nicolas Kokkinos, Dechert LLP
whereas the liability of the limited partner is lim - ited to the amount of capital it contributes to that partnership. Also, unless the partnership is a PFLP, there is a restriction on the ability of lim - ited partners to withdraw capital during the life of the partnership. To keep the capital element as small as possible, limited partners will typi - cally split their commitments into a loan element (typically 99.99% of total commitments) and a capital contribution element (typically 0.01% of total commitments). Listed Funds In respect of ITCs and REITs, UK companies leg - islation limits the liability of the shareholders for company debts to the capital originally invested in the fund. 2.1.4 Disclosure Requirements Private Funds Although not required by UK law, the key mar - keting document that is usually used for a closed-ended private fund is a private place - ment memorandum (PPM). UK law generally requires that any marketing material, including a PPM, is “clear, fair and not misleading”. Depend - ing on the intended recipient, the PPM may also need to be approved by an FCA-authorised per - son. Under the UK AIFM Regime, there are also specific requirements to make set disclosures to investors prior to their investment into the fund. These disclosures are usually included in the PPM. Listed Funds In addition to the UK AIFM Regime disclosure requirements, ITCs and REITs must also comply with the disclosure requirements set out in the FCA’s listing, prospectus, disclosure guidance and transparency rules.
Under UK companies legislation and the FCA’s listing, disclosure guidance and transparency rules, UK incorporated ITCs must also publish annual and semi-annual reports and accounts. The annual report and accounts must be pre - pared in accordance with the applicable account - ing standards, and must give a true and fair view of the assets, liabilities, financial position and profit and loss of the company. The semi-annual financial reports do not need to be audited, but it is common practice to ask the auditor to cast an eye over them, and the audit committee of the fund should certainly review them. Under the UK’s Packaged Retail and Insurance- based Investment Products (PRIIPs) Regime, derived from the EU PRIIPs Regulation, a short, standardised disclosure document containing the key information about the product being offered (a key information document, or KID) must also be produced and published for invest - ment products marketed to retail investors in the UK. If an investment product will also be mar - keted to retail investors in the EU, a separate KID prepared in accordance with the EU PRIIPs Reg - ulation must also be produced and published. Since 1 January 2023, changes to both the UK and EU regimes have led to divergence. In the UK the PRIIPs regime will be replaced by a new retail disclosure framework for ‘Consumer Com - posite Investments’ (CCIs), with the CCI regime covering similar products to PRIIPs. In Novem - ber 2024, HM Treasury’s new regulations grant - ing the FCA powers to construct and deliver the new CCI framework entered into force. The FCA is to set out detailed rules and guidelines for the CCI regime, which will only take effect once the UK PRIIPS regime has been repealed.
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