Following last week’s post dealing with the EU fund passporting regime, we now turn our attention to the next topic in the series: how will an investment manager currently relying on a UK MiFID licence to market EU funds continue to do so?
Distribution – Bridging the Gap
You are an investment manager using a MiFID licence in the UK to distribute funds to investors in the EU. As things currently stand, there is a good chance that come March 2019, you will fall outside the MiFID regime and alternative arrangements will need to be made.
One idea that springs to mind is for you to set up an EU 27 regulated MiFID firm. Although this may seem like the most logical option, especially if you are a larger manager, this will involve a lengthy approval process, significant substance requirements and associated costs.
A more efficient solution may be to utilise the permission of an existing management company or self-managed investment company to distribute. If you are lucky enough to have your own EU 27 management company or SMIC, you could simply use this permission. If not, you could enlist the services of a third-party management company, although this may require the secondment of employees from the UK entity.
The third and possibly most straight forward option is to appoint an existing third-party EU 27 MiFID firm as an appointed representative. This option should be familiar to those managers based in the UK but is less common throughout the rest of the EU.
Carne is here to help in any of the above scenarios. We operate regulated AIFMs in both Ireland and Luxembourg with well over 100 employees across the two jurisdictions. We also provide substance to management companies in Ireland and can support management companies and MiFID firms in both Ireland and Luxembourg generally.
Last but certainly not least Carne will soon be able to further assist clients by marketing investment funds on their behalf or by appointing clients’ EU-based representatives to provide marketing services as tied agents, on the basis of its own MiFID licence.
Next week we will look at how a manager relying on a UK MiFID licence to operate individually managed accounts may continue to do so.