10 key steps asset managers and investment funds should be taking to prepare for Brexit
10 key steps asset managers and investment funds should be taking to prepare for Brexit

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • 10 key steps asset managers and investment funds should be taking to prepare for Brexit
  • ‘Onshoring’ of EU funds and asset management regulatory regimes
  • Key steps asset managers and funds can take to prepare for a hard Brexit
  • Temporary permissions regime in the UK
  • Temporary regimes and grandfathering in the EEA available to UK funds and firms
  • AIFs and AIFMs
  • UCITS
  • MiFID
  • Brexit-related delegation by an EU manager to a UK manager
  • Next steps

This Practice Note considers the potential impact of Brexit on asset managers and investment funds and key steps they can take to prepare.

The final outcome of the Brexit negotiations remains uncertain. However, for the purposes of this note it is assumed that on exit day (as defined in the European Union (Withdrawal) Act 2018 (EU(W)A 2018)):

  1. there will be a ‘hard Brexit’ ie the UK will cease to be a member of the European Economic Area (EEA)

  2. there will be no withdrawal agreement in place between the UK and the EU that covers UK and EEA managers and funds (and no associated implementation period during which the EU-wide marketing and management passports will apply)

‘Onshoring’ of EU funds and asset management regulatory regimes

The main EU regulatory regimes which regulate asset management and investment funds (the Relevant EU Regulatory Regimes) are:

  1. the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD)

  2. the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive 2009/65/EC

  3. the recast Markets in Financial Instruments Directive 2014/65/EU (MiFID II)

On exit day, the UK will be considered a third country (ie not a member of the EEA) for the purposes of these regimes. As a result, UK managers and funds will no longer have access to relevant EU-wide, streamlined marketing and management rights (passports). However, UK temporary permissions