Les conséquences du Brexit sur les fonds d'investissement et les acteurs financiers

Abstract

The purpose of this paper is to analyse all aspects linked to brexit on the investment funds industry is an area that is heavily regulated at EU level by the Alternative Investment Fund Managers Directive (“AIFMD”), the Undertakings for Collective Investment in Transferable Securities Directive (“UCITS”) and the Markets in Financial Instruments Directive (“MiFID”). While Brexit is not likely to occur before 2019, this paper summarise the impacts in the investment funds under different area of activities. In the first part, the regulatory environement is detailed as well as the processus of Brexit and the players who are involved. The primary considerations of Brexit for investment management professionals and the clients they serve are a loss of passporting rights (primarily for UK firms but also for others EU firms passporting to the UK), possible restrictions on the management of assets from the UK for clients based in the EU. A loss of passporting rights for investment firms would impact several aspects of the investment management business. These include, for example, cross-border marketing and distribution of investment funds, as well as some ancillary services, such as custody and administration. The provision of investment services to retail clients may also be impacted, given the limitations of the “third-country” regimes under certain EU laws. Then a special focus on the different outcomes of the negotiations (which comprise two phases) is described. In the second part we assess the potential impacts Brexit may have on funds and fund managers (regarding the locations of the different key fund’s players) and the needs to be considered and contingency plans put in place (with the elements to be considered). This is particularly relevant for fund managers wishing to keep EU distribution channels open. Ireland and Luxembourg are potential markets for re-domiciliation and future product initiatives as they are already hub centers for funds domiciliation.