On October 8, HM Treasury published two draft statutory instruments (SIs), together with explanatory notes, which will make amendments to retained EU law relating to collective investment schemes (CIS) and alternative investment fund managers (AIFMs).
The purpose of the draft SIs is to ensure that the regimes established under the latest Undertakings for the Collective Investment in Transferable Securities Directive (UCITS IV Directive) and the Alternative Investment Fund Managers Directive (AIFMD) continue to operate effectively for investment funds and their managers after the United Kingdom’s withdrawal from the European Union (Brexit) on March 29, 2019 (Exit Day).
The draft version of the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018 (Draft SI for AIFMs), among other things:
- Amends the definition of alternative investment fund (AIF);
- Disapplies the UK National Private Placement Regime information and reporting requirements for funds marketing to retail investors;
- Sets out the design and structure of a “temporary permissions regime” for AIFs and AIFMs, including, for example, money market funds using an AIF structure; and
- Ensures that a UK AIFM will only be required to report on portfolio companies and comply with the restrictions on asset stripping when it acquires control of a UK company, instead of an EU company.
The draft version of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2018 (Draft SI for CIS), among other things:
- Sets out the design and structure of a “temporary permissions regime” for EEA UCITS; and
- Introduces a UK UCITS regime for funds established and authorized in the United Kingdom, which will be called “UK UCITS.”
HM Treasury will lay the draft SIs before Parliament in autumn 2018, and the SIs will come into force on Exit Day.