MiFID and SI Limited Partnerships
SI has received a small number of enquiries from adviser firms that are opted out of MiFID, seeking clarification on the marketing of unregulated collective investment schemes such as SI Limited Partnership No 7 to clients.
Chapter 4 of the FSA's MiFID Permissions and Notifications Guide (Sept 07), which covers Article 3 MiFID exemption and the marketing and selling of such schemes, states in the overview that: ·
- It is a condition of the ISD and MiFID exemptions that firms carrying on the activity of receiving and transmitting financial instruments, to which the directive applies, do not transmit orders directly to operators of unregulated schemes unless they are fund managers to which ISD or MiFID applies. ·
- In our view, where a financial adviser transmits orders to an authorised broker (or another authorised firm to which MiFID applies), this should fall within the scope of the exemption.
Following further clarification from the FSA, we have made the decision to make a small revision to the application process for SI Limited Partnership No 7 and future property limited partnerships. We have agreed with our sister company, Sigma Technology Management Limited ("STM"), an authorised firm to which MiFID applies, that it will receive applications on SI’s behalf.
To remove any doubt, this ensures that even adviser firms that are currently opted out of MiFID can market SI’s property limited partnerships without the need to revise their current FSA permissions.