In a post-Brexit world, the UK now has third country status for the European Economic Area (EEA) and the passports rights held by UK firms in the EU for conducting financial activities are no longer valid. The same is true for EU firms holding passport rights in UK for similar activities. This has a direct impact on how firms are marketed under the AIFMD regime.
- For UK AIFMs marketed in the EU
Because the marketing passport is no longer valid, these firms need to make use of the process in place under the National Private Placement Regime (NPPR) for other Non-EU firms.
- For EU AIFMs marketed in the UK
With passports rendered invalid, these firms can rely on one of two approaches to continue marketing in the UK. If the firms have registered their funds for transitional relief under the temporary permissions Regime (TPR) established by the UK, they can continue marketing funds. If not, they will have to use the NPPR approval process.
- For AIFMs outside the EU and UK
Brexit will have no impact on firms based outside of the EU and UK, as these firms can continue to be governed by their respective NPPR rules for marketing funds.
In addition, there is a direct impact on how firms report AIFMD filing to the UK and various EU jurisdictions. The major implications for AIFMD filing include:
- The UK is no longer part of the EEA for reporting purposes. This directly affects how securities are reported across geographies.
- EU jurisdictions such as Germany, Norway, Finland, Sweden, and others no longer accept master fund information if the domicile is the UK.
- UK-based AIFMs can no longer be managers for Luxembourg Reserved Alternative Investment Funds (RAIFs), because Luxembourg regulatory authority CSSF only identifies managers that are based in the EEA.
Brexit has complicated how AIFMD is reported across jurisdictions. IVP Regulatory Reporting (Raptor) offers a solution, using a centralized approach to jurisdictional nuances that makes the transition extremely coherent and smooth. With in-built variances for jurisdictions and updated validations, IVP Regulatory Reporting enables firms to generate multi-jurisdiction outputs with a one-time data input for AIFMD. Additionally, fund level controls allow users to include or exclude funds for jurisdictions as required.