Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
Tim Thornton, MUFG Fund Services

21623

MUFG says AIFMs must ensure investors don’t pay for Brexit passporting fall-out

RELATED TOPICS​

Tim Thornton, (pictured) COO, Fund Services, MUFG Investor Services has commented that the loss of AIFMD passporting rights that enable UK-based alternative fund managers to market products across the EU has been one of the industry’s main concerns since the Brexit vote.   

“Whether the UK retains its existing AIFMD rights or is required to apply through the equivalency process will only become clear as negotiations progress. The latter scenario is much more likely, but given that the regulatory regime in the UK already matches that of the EU, the process of bringing forward the approval of an AIFMD third country passport should be relatively straightforward,” he says.
 
“If the UK’s regulatory landscape substantially changes, we can expect the European Securities and Markets Authority (ESMA) to take a tougher line on passporting, pushing the UK further down the queue. Any gap in passporting rights could create significant upheaval and high costs for re-routing and restructuring funds. It would also raise questions about pre-existing investors around ongoing marketing, and parallel vehicles may need to be established. A sensible compromise is necessary to avoid increased fragmentation of the industry and costs which investors will ultimately end up bearing.
 
“Although London’s power as a global financial centre may be called into question should the UK lose its broader passporting rights, Britain remains a large economy with a significant investor base. Despite this, its focus could shift from being an operations centre for the majority of European fund managers, to a base which primarily supports UK investors and fund structures.
 
“The impact on the rest of Europe is potentially disadvantageous. On one hand, a loss of the UK’s passporting rights could encourage mangers to move their European operations to other jurisdictions, which would benefit those locations. On the other hand, should a fund’s primary investor base be the UK, we could see those products re-domiciled to the UK and become unavailable to European investors.  
 
“Any requirement for fund managers to move their operations away from the UK will very much depend on the wider outlook for its financial services sector.  Should London retain its status as a jurisdiction of choice, any movements are likely to be small enough to allow continued marketing in Europe, rather than a large scale overhaul of entire fund management operations.”
 
 

Latest News

MainStreet Partners has released its latest quarterly GSS Bonds report “Summer Edition”. This edition of..
Pension and insurance firms have backed a public-private blended finance model to help navigate investment..
MSCI has announced the launch of MSCI Private Capital Indexes, writing that with growing investor..

Related Articles

Rod Ringrow, Invesco
Geopolitical tension has surpassed inflation as the primary concern of sovereign investors and is prompting greater interest in allocating to emerging markets, according to the twelfth annual Invesco Global Sovereign Asset Management Study...
Geopolitical tension has surpassed inflation as the primary concern of sovereign investors and is prompting greater interest in allocating to..
Green energy
2024 has been the strongest ever year for green bond sales, with deals topping USD356 billion in the first six months, according to research from Bloomberg...
2024 has been the strongest ever year for green bond sales, with deals topping USD356 billion in the first six..
infrastructure headline
The new Labour government has launched a GBP7.3 billion National Wealth Fund which will target private capital to support the UK’s growth ambitions...
The new Labour government has launched a GBP7.3 billion National Wealth Fund which will target private capital to support the..
Tom McPhail, lang cat
Today’s news of a landslide victory from the UK’s Labour party, finds that the markets had mostly factored in a widely predicted Labour win...
Today’s news of a landslide victory from the UK’s Labour party, finds that the markets had mostly factored in a..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by