A collective investment scheme (or scheme) is an arrangement that is a collective investment fund under the Financial Services Regulations (other than an arrangement that is not a scheme under COLL, schedule 1).
Note on FSR definition of collective investment fund
The Financial Services Regulations (FSR), schedule 3, part 3, paragraphs 6.2 to 6.6 provide as follows:
6.2 Subject to paragraphs 6.5 and 6.6, a collective investment fund is any arrangement:
(1) the purpose or effect of which is to enable persons taking part in the arrangements (the participants) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of property or sums paid out of such profits or income;
(2) that meets the property condition in paragraph 6.3 and the investment condition in paragraph 6.4.
6.3 An arrangement will meet the property condition referred to in paragraph (2) if:
(1) the arrangement is made with respect to property of any description, including money, whether the participants become owners of the property or any part of it or otherwise; and
(2) any of the participants do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or give directions in respect of the property.
6.4 An arrangement will meet the investment condition referred to in paragraph 6.2 if:
(1) the contributions of the participants and the profits or income out of which payments to be made are pooled; and
(2) the property is managed as a whole by or on behalf of the operator of the scheme.
6.5 Arrangements for such pooling as is mentioned in paragraph 6.4 (1) in relation to separate parts of the property are not to be regarded as constituting a single collective investment fund unless the participants are entitled to exchange rights in one part for rights in another.
6.6 The Regulatory Authority may make Rules specifying the circumstances in which particular arrangements do not constitute a collective investment fund for the purposes of paragraph 6.1.