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Definition of a collective investment scheme

The definition of a CIS is contained in section 235 of the Financial Services and Markets Act 2000 (FSMA 2000). The definition is broad and somewhat vague and covers a broad variety of arrangements, not just traditional investment funds. The Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001, SI 2001/1062 (CIS Order) was therefore enacted to set out a number of arrangements which, if applicable, would mean that the arrangements in question would not be viewed as a CIS. Section 235 of FSMA 2000 defines a CIS as:

‘…any ‘arrangements’ with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive Profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of