Jurisdiction(s):
United Kingdom

Implementing side pockets in FCA-authorised funds: emergency regime for Russia, Belarus and Ukraine sanctions-affected assets - scope, qualifying tests, governance, investor disclosures, costs and assessment of value under COLL

Published by a LexisNexis Financial Services expert

Practice notes

This Practice Note explains the Financial Conduct Authority (FCA) framework permitting authorised funds to deploy side pockets for assets hit by Russia’s invasion of Ukraine and the ensuing sanctions. It provides questions and answers on this framework, including topics such as:

scope
initial considerations
impact on investors
cost considerations
alternatives
changes to the FCA’s proposed rules
any further FCA guidance relating to side pockets and managing side pockets

It also highlights initial and ongoing considerations for establishing, operating, and managing side pockets within authorised funds effectively.

Background

On 6 July 2022, the Financial Conduct Authority (FCA) published policy statement PS22/8, ‘Protecting investors in authorised funds following the Russian invasion of Ukraine’, which outlined urgent measures to manage the invasion’s effects on authorised funds and retail investors. Those rules came into effect on 11 July 2022. That policy statement followed consultation paper CP22/8, ‘Protecting investors in authorised funds following the Russian invasion of Ukraine’, which invited views on the proposed emergency steps. The FCA recognises that the Russian invasion of Ukraine has had a significant impact on financial markets and on FCA-regulated authorised funds. To respond, the FCA is introducing an unprecedented liquidity management tool for authorised funds, called side pockets...

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Julian Brown

Eversheds Sutherland

Julian undertakes a broad range of financial services work, including the formation and regulation of collective investment schemes, regulatory work for fund management clients, and related company and commercial work.His experience includes unit trust and open-ended investment company launches and complex reorganisations, detailed regulatory advice, financial promotion and custody issues, and offshore closed-ended fund projects. Julian has also been closely involved in the establishment of investment fund supermarkets and other related `multi-manager` external fund link arrangements....

Angela Phelan

Eversheds Sutherland

Angela has experience in a range of financial services and products. Angela advises clients within the financial services sector including asset managers, institutional investors and funds on fund launches and realisation opportunities, relationships with service providers and regulatory compliance. She has experience of a broad range of work in respect of authorised funds (both UCITS and AIFs) and advises on structuring, establishment and authorisation of such investment funds. Angela has experience in large-scale project management, regulatory and advisory work involving financial services institutions, legal drafting and negotiation. Angela has negotiated fund documentation including transfers, distribution, private placement, depositary and rebate agreements. Angela has been on secondment to Ninety One Fund Managers UK Limited. Whilst on secondment she assisted with their applications to the FCA for authorisation under Open-Ended Investment Companies Regulations 2001 (the "OEIC Regulations"), merger projects and...

Thomas Pritchard

Eversheds Sutherland

Thomas is a Principal Associate Professional support Lawyer at Eversheds Sutherland in the Financial Services team. He has worked in legal knowledge management since 2002 in various fields including financial services, Brexit, insolvency, restructuring and banking. He has previously worked at Clifford Chance, Slaughter and May and White & Case and ran his own knowledge management company, principally supplying content for LexisPSL.Previously a PSL in the Finance team, in February 2018 Thomas switched disciplines to support our growing Financial Services team. His recent experience includes:Creating a know-how culture in the Financial Services team to ensure that know-how is captured, processed, stored and exploited to the full, internally and in thought leadership briefings for clientsDeveloping the first formal precedent suite for the Financial Services teamSupporting and developing the Financial Services teams internal and client facing training programme and...

Web page updated on 21/05/2026

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