As we have reported in recent editions of Private Equity Comment, a number of European countries – including, for example, Cyprus and Luxembourg – are working hard to make themselves more attractive to private equity and venture capital fund managers. And, despite its President’s now-famous 2012 declaration that he was an enemy of finance, France has proved to be no slouch in this regard. For instance, the new French SLP is designed as an alternative to Luxembourg and English limited partnerships, and this summer saw the French regulator (Autorité des Marchés Financiers, or AMF) revise its (otherwise highly restrictive) policy on marketing funds to French investors by allowing for "pre-marketing" in certain circumstances. But its latest move is perhaps its most ambitious: last month the AMF implemented the “AGILITY” program with the aim of fast tracking the authorisation process for UK financial firms to establish a base of activities in France. While no mention was made of the Brexit vote in the official announcement, access to the European single market (and therefore to “passporting” rights) was highlighted as a key attraction.
Part of this fast track process is the so called "2WeekTicket", which allows fund management firms and fintech companies authorised by the Financial Conduct Authority and providing services covered by a European Directive (such as AIFMD, MiFID or UCITS), to receive a “pre-authorisation” from the AMF within two weeks. While this does not allow them to start providing financial services in France immediately (the final authorisation will take at least another two months), it does allow the firm to begin the planning phase, undertaking activities such as searching for offices and recruiting staff. The application for the 2WeekTicket is by way of submission of a standard form, in which the applicant will set out the current scope of activities for which it is authorised by the FCA, and also the proposed activities that it wishes to carry on in France.
Given that the French language has always been regarded as an affaire d'état – protected by the state and central to its national identity – perhaps the most striking feature of the programme is the establishment of an "English Desk": English speaking “coaches” will be on hand to help applicants understand the French regulations and laws that apply to their proposed activities. Many of the application forms and guidelines under these regulations are now in English and the applications (which require submission of corporate documents and various policies such as compliance, valuation and conflicts) can now be filed in English. And for those firms that provide a range of services on top of managing AIFs or UCITS funds, such as receipt and transmission of orders, AGILITY will offer coordinated access to a single contact point at both applicable regulators, the AMF and the ACPR (Autorité de Contrôle Prudentiel et de Résolution, which regulates some investment services, banks and insurance companies).
It is clear that this summer's Brexit vote has spurred on the AMF to develop the AGILITY program for UK managers, and the AMF have already been contacted by firms expressing a real interest. But they are keen to point out that this is not solely UK focused, and they intend to offer the same opportunities to fund managers across Europe. Given that we are still some way from the UK actually leaving the EU, the competition looks set to intensify in the years ahead, and it will be interesting to see whether other regulators follow the French lead.