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Brexit: Implications for AMIC members of the UK vote to leave the EU
Following the UK vote on 23 June 2016 to leave the EU, ICMA has been working actively with all its members, large and small, sell side and buy side, through its Market Practice and Regulatory Policy Committees, Asset Management and Investors Council, Regional Committees and other Working Groups, as appropriate, to help them prepare for the international capital market implications of Brexit. ICMA’s mission continues to be the promotion of resilient and well-functioning international capital markets. For information on all of ICMA’s activities related to Brexit, please view the main ICMA Brexit page.

AMIC will keep its members up to date with its assessment of relevant new developments and assist its members where possible via its Executive Committee and various working groups as appropriate. Below we have started a compilation of frequently asked questions (FAQs) based on the issues which have been raised with us so far. This list is expected to grow over time.


Q1: Will EU investment funds continue to be able to delegate portfolio management and other functions to the UK after Brexit?

Yes, provided certain arrangements are in place. UCITS funds and AIFs can delegate portfolio management to third countries. UCITS funds can delegate portfolio management and other functions, such as custody, subject to complying with the UCITS delegation regime, which involves implementing a remuneration framework similar to the ones provided by the Directive. This also requires cooperation between the FCA and regulators in member states where the UCITS are established. Similarly, AIFs can delegate functions subject to satisfaction of the conditions set out in AIFMD regarding delegation of asset management and regulatory cooperation between the FCA and regulators in member states where AIFs are established. Therefore, it is important that, for both UCITS funds and AIFs, cooperation agreements are put in place between the UK and the EU27 regulators, as delegation may be restricted and current arrangements may be suspended in the absence of such agreements.

Delegation is one of the key pillars supporting the EU’s cross-border investment model which has made UCITS, and increasingly AIFs, a global brand and a European success story. The current fund distribution model in Europe, where assets are managed in local markets and funds are offered across borders, functions well. UCITS is a recognised global brand and a European success story. Together, UCITS and AIFs are recognised in over 75 jurisdictions worldwide including Asia and South America. These funds channel investment into Europe as well as across the rest of the world, funding corporate growth and job creation as well as enabling European savers to benefit from fund management expertise around the globe while enjoying the same level of investment protection as within the EU. UCITS have democratised investment and helped European citizens to invest and save for their retirement by diversifying their portfolios to increase returns and manage risk. Delegation is the key to offering savers best-in-class global investment opportunities, wherever in the world they are located.

It is important to note that in the 20 September 2017 European Commission proposals to reform the European Supervisory Agencies (ESAs), there is a suggestion to give the European Securities and Markets Authority (ESMA) power to issue opinions on delegation arrangements which could lead to an unwinding of existing approved delegation arrangements and putting in jeopardy future delegation arrangements. The Commission’s proposal would give the ESAs new powers to review both new and old delegation decisions firms to outsource, delegate or transfer a material part of risk outside the EU. ICMA’s AMIC is concerned about how this proposal would affect in practice the established and well-functioning model for fund delegation in Europe as governed by the AIFM and UCITS Directives. The negotiations on the ESAs Review is on-going and a final agreement between the European Parliament and Council is still pending.

The information contained herein is provided for general guidance only and should not be relied upon as advice. Recipients acknowledge that ICMA does not provide legal or other advice and expressly disclaims any responsibility for the information. Recipients should obtain legal or other professional advice as appropriate.