Revised Common Investment Funds schemes

The Charity Commission has published two revised model schemes for Common Investment Funds (CIFs) following a consultation this summer.

The revised schemes are needed to ensure that CIFs are compliant with the implementation of the Alternative Investment Fund Managers Directive (AIFMD).

A CIF is a collective investment fund in which only charities can participate. Charity law gives the Commission the power to establish these funds as charities. As a result, although the Commission does not regulate the performance of the investment funds, it does have responsibility for regulating these funds as charities.

The regulator will now only establish any new CIFs using these model schemes and have said that they will firstly consider whether the investment fund should more properly be created as an authorised investment fund. The Commission explains that the reason for this approach is because it considers charity investors are entitled to the protection that investment in an authorised investment fund provides because they are subject to a more extensive regulatory regime under the Financial Conduct Authority.

Existing CIFs may also amend their current schemes in accordance with the revised model schemes. They do not generally need the permission of the regulator to do so except where the changes relate to the remuneration of charity trustees or to the objects clause. They must inform the Commission of any changes made to the governing document of the charity.

Existing and new CIFs will be under dual regulation by the Charity Commission and the FCA. The Charity Commission only regulates CIFs as charities and the FCA regulates the funds as investment funds through its role in regulating the managers of alternative investment funds.

The revised schemes can be viewed at