10 key steps asset managers and investment funds should be taking to prepare for the end of the Brexit transition period
10 key steps asset managers and investment funds should be taking to prepare for the end of the Brexit transition period

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 the end of the Brexit transition period
  • ‘Onshoring’ of EU funds and asset management regulatory regimes
  • Key steps asset managers and funds can take to prepare for a ‘no deal scenario’
  • 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 for the end of the Brexit transition period.

‘Onshoring’ of EU funds and asset management regulatory regimes

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

During the current ‘Brexit transition period’ (implementation period) the Relevant Regimes, and associated marketing and management passports rights, apply in the UK. The European Union (Withdrawal) Act 2018 (EU(W)A 2018), as amended by the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020) onshores and preserves most EU and EU-derived law relating to the Relevant Regimes as it stands immediately before the end of the implementation period (IP completion day), which is due to end on 31 December 2020.

If the UK and the EU fail to reach an agreement that will cover the Relevant Regimes by the end of the implementation period (IP completion day), the UK will trade with the EU as a third country on World Trade Organization (WTO) terms. Given that WTO rules barely cover trade in services, this would effectively mean a