COLL or the Collective Investment Schemes sourcebook replaces the previous 2007 sourcebook CIS (Collective Investment Scheme). Under the book of fund rules set by the Financial Services Authority (FSA), COLL defines the limitations on unit trusts regulated in the UK.
It describes three types of fund—those created under the rules of Undertakings for Collective Investment in Transferable Securities (UCITS), non-UCITS retail schemes, and the qualified investor schemes.
The first fund type is marketed through the European Union, while the second is limited only to the UK market. Both, however, can be marketed to investors in the retail market. The third fund type, on the other hand, is designed for sophisticated investors.
The COLL sourcebook also specifies regulated collective investment schemes that are FCA-regulated as authorized funds or FCA-recognized as recognized schemes. There are two types of authorized funds—an authorized unit trust scheme (AUT) and an investment company with variable capital (ICVC).
CIS is defined by law as any arrangement with respect to a property, including money and how the profits or income is shared among investment participants. It is essentially an investment vehicle where the investors do not have day-to-day control over how a property is managed.
The Financial Conduct Authority (FCA) is responsible for authorizing a CIS to be established or operated.