Jurisdiction(s):
United Kingdom

Key definition

UCITs definition

What does UCITs mean? In practice, UCITS are regulated open‑ended retail investment funds that invest mainly in transferable securities and other eligible assets, subject to strict rules on diversification, liquidity, leverage, disclosure and depositary oversight. The term is defined in legislation: in the EEA by Directive 2009/65/EC (as amended, including “UCITS V”), and in the UK by the on‑shored “UK UCITS” regime under retained EU law and the FCA Handbook. Key features include eligible asset and concentration limits, daily/regular redemption, risk management, and prescribed investor disclosures (e.g., KIID/KID), making UCITS the standard vehicle for cross‑border retail distribution. Structures vary: in continental Europe common...

UK-authorised Qualified Investor Schemes (QIS): FCA regime, investment and borrowing powers, eligibility and promotion, and Genuine Diversity of Ownership tax requirements

Published by a LexisNexis Financial Services expert

Practice notes

This Practice Note examines the principal features of qualified investor schemes (QIS), a UK‑authorised fund framework, covering investment powers, eligibility requirements and possible tax consequences.

What is a QIS?

A QIS is a UK‑authorised fund first launched in 2004 to satisfy the fund management sector’s call for a Financial Conduct Authority (FCA) regulated investment vehicle operating under a comparatively light‑touch rulebook. It is aimed mainly at professional, institutional and sophisticated investors, including those within wealth management, and sits alongside the UK ucits, non‑UCITS retail schemes (NURS) and long‑term asset fund (LTAF) regimes. For additional detail on UCITS, NURS and LTAFs, see Practice Notes: UK Undertakings for Collective Investment in Transferable Securities (UCITS)—essentials, Non‑UCITS retail schemes (NURS) and The UK Long‑Term Asset Fund (LTAF).

A QIS can be structured as an authorised unit trust (AUT), an open‑ended investment company (OEIC), or an authorised contractual scheme (ACS). For more on AUTs, OEICs and ACSs, see Practice Notes: OEIC authorisation and winding‑up, Authorised unit trusts (AUTs) and Taxation of authorised contractual schemes (ACSs)—overview.

As it is not a UK UCITS, a QIS is treated as an alternative investment fund (AIF) under the UK alternative investment fund managers (AIFM) regime, within the UK regulatory landscape overall...

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Lora Froud

Macfarlanes

Lora advises clients on the structuring and operation of onshore and offshore investment funds, both regulated and unregulated, and also advises on all legal aspects of asset management. She specialises in regulated funds. Her clients include operators, asset managers, depositaries and custodians of investment funds. She regularly assists clients with related EU and UK regulatory and compliance matters. She has particular experience in advising on the UCITS regime, the Retail Distribution Review, the Alternative Investment Fund Managers Directive, MiFID and PRIIPs. Lora is an active participant in Investment Association initiatives and is currently advising the FCA and IA on the proposed Long Term Asset Fund. She is also on the Alternative Investment Management Association working groups in relation to UCITS, AIFMD and Liquid Alternatives and is on the IBA’s Investment Funds Committee. Lora is ranked as a leading individual in the retail funds space by a...

Web page updated on 21/05/2026

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