BREXIT SOLUTIONS - Carne Group Financial Services...2019/02/04 · Brexit has resulted in UK based...
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© COPYRIGHT CARNE GROUP 2019. ALL RIGHTS RESERVED. BREXIT SOLUTIONS FOR ASSET MANAGERS
Transcript of BREXIT SOLUTIONS - Carne Group Financial Services...2019/02/04 · Brexit has resulted in UK based...
© COPYRIGHT CARNE GROUP 2019. ALL RIGHTS RESERVED.
BREXITSOLUTIONSFOR ASSET MANAGERS
We guide you to make sureyou are always on the right track.
Brexit has resulted in UK based investment managers having to make decisions about their future EU 27 footprint.
In summary Brexit creates a number of challenges for investment managers: • What arrangements do they have in the EU 27 to manage their existing EU products?
• How will they be able to market their products in the EU 27 if they are currently relying on a UK MiFID licence to do this?
• How will they manage separately managed accounts in the EU 27 if they are currently relying on a UK MiFID entity to this?
Brexit is not a one-way street• Managers looking to access UK investors also need to consider how they will continue
to access the UK market if they have traditionally utilised Luxembourg or Irish Funds to do that.
3This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.
BREXIT
Investment Managers Have Three Options: 1. Utilise the services of an existing EU 27 regulated UCITS or AIF Manager. In this model
the management company will delegate the portfolio management function back to the UK regulated investment manager but retain the remaining management functions in the EU;
2. Build their own management company in an EU 27 jurisdiction with the requisite substance in that jurisdiction;
3. Set up a self-managed investment company in either Ireland or Luxembourg.
ESMA’s supervisory guidance has made it clear UCITS Managers, AIFMs and SuperManCos require that “key executives and senior managers of EU authorised entities are employed in the Member State of establishment and work there to a degree proportionate to their envisaged role”.
Marketing Funds in EU 271. Utilise the permission of the management
company or self-managed company to distribute the products which it manages.
2. Set up an EU 27 regulated MiFID firm.
3. Utilise the services of an existing EU 27 MiFID firm as their appointed representative.
This utilises the existing permission of a third-party management company or in-house EU 27 management company or SMIC but may require the secondment of employees from the UK entity.
This will require a lengthy EU approval process with significant substance requirements.
This is a very common model in the UK today but is less well utilised in the EU 27. With ESMA focusing on substance and delegation, it may not be a model that finds favour with local regulators.
Separately Managed AccountsOptions• Option 1 Set up an EU 27 AIFM, UCITS or SuperManCo with additional permissions. • Option 2 set up an EU 27 MiFID firm.
Again, both options will require significant substance although managers will be in a position to solve both the distribution problem and the separately managed account issue if they choose this route.
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SOLUTIONSManaging EU 27 Products
Parallel Funds?Much of the focus post Brexit has been on how UK based investment managers will continue to access the EU 27 Market. However, the UK is a very significant market and wi l l cont inue to be an attractive place for both UK and Non-UK investment managers to market their products. While the temporary permissions regime for EU 27 funds is a positive development, affording a window of up to 3 years for those funds registered under it, the uncertainty may prompt some managers who have previously utilised Irish and Luxembourg funds to market to UK investors to rethink that strategy.
Investment managers may need to consider setting up parallel UK structures to target UK investors.
“While much has been made of it not being in the EU 27’s long term interests to have its financial markets serviced primarily from London, many might question whether it will remain in the UK’s interest to have UK investors’ money managed in EU 27 domiciled funds.”
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SOLUTIONSUK Access
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EU 27 AccessCarne operates regulated UCITS and AIF Management companies in both Ireland and Luxembourg. With over 120 employees across both jurisdictions managing more than $100bn in assets, Carne is best placed to act as your independent management company.
Carne also provides substance to many management companies in Ireland and Luxembourg by providing designated persons, compliance officers, MLRO, company secretarial, passporting and management company accounting services in both jurisdictions.
Carne has developed a propr ietar y technology solution, CORR, to enable its clients to manage their myriad of regulatory requirements whether they be in the EU 27 or in the UK.
Carne has utilised its management company solutions to enable its clients to market funds under its distribution permissions.
Carne has been approved to provide MiFID services which will enable clients to continue to market in the EU/EEA as part of a tied agent solution.
UK AccessCarne has permission to act as Authorised Corporate Director to both UCITS and AIF funds in the UK and can support the establishment of parallel vehicles.
HOW CARNE CAN HELP
ExperiencedPeople Around the Globe
Focus on FundGovernance
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A long-term commitment to our clients, industry and community is based on a mixture of qualities that Carne feels connected with.
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WHY CHOOSE CARNE?WHAT OTHERS VALUE ABOUT THEIR PARTNERSHIP WITH CARNE
CARNE DublinDes Fullam+353 1 489 [email protected]
CARNE LondonAymeric Lechartier +44 203 666 [email protected] CARNE Channel IslandsMark Hodgson+44 1534 679 [email protected] CARNE New YorkJoe Hardiman+1 732 642 [email protected]
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CARNE LuxembourgSteve Bernat+352 2673 [email protected] CARNE Cayman IslandsJohn Ackerley+1 345 916 [email protected]
CARNE LisbonVictoria Roquette+351 926 598 900 [email protected]
CARNE New YorkNicola Cowman+1 732 642 [email protected]
CARNE New YorkKristin Koloniaris+1 718 730 [email protected]
CARNE ZurichVeronica Buffoni+41 78 664 [email protected]
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