The Commission registers a huge variety of different charities, of all sizes and descriptions. However, this week the Commission has reached a rare milestone and registered an entirely new type of charity: the first Charitable Authorised Investment Fund.
A Charitable Authorised Investment Fund (CAIF) is a form of collective investment scheme which is authorised by the Financial Conduct Authority and also authorised by and registered as a charity with the Commission. Plans to introduce a new fund structure for charities were announced in the 2015 Budget announcement and the Commission worked with a group of external stakeholders to establish a model structure for such funds which was announced in October 2016.
Although charitable collective investment arrangements were already available, in the form of common investment funds (CIFs), CAIFs offer the advantages of FCA authorisation and regulation, and the ability to operate as a unit trust, a widely recognised fund structure. Since the model was announced, we have worked hard to develop and update our approach to the registration and regulation of CAIFs, and Sarasin Charity Authorised Investment Funds is now the first CAIF to be registered by us.
Looking forward, we anticipate that much of the demand for setting up these funds will come from fund managers of existing CIFs. CIF managers have already expressed enthusiasm for the new structure, which will allow them to transfer existing CIFs into a new, FCA-authorised investment fund and continue to serve their charity clients.
The Commission has been working with other parties including FCA and others for a number of years on the establishment of authorised investment funds which can be recognised as charities. The initiative will benefit charity investment funds, and ultimately the whole charity sector, by allowing for a fully regulated fund structure specifically devoted to investment by charities, so we’re delighted to have registered the first of what will hopefully be many CAIFs.
Anyone wanting to enquire about the setting of new CAIFs or the conversion of CIFs into CAIFs should contact our Charitable Status Legal team, at firstname.lastname@example.org.