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Authored by partners at global law firm Dechert LLP.

The voters have spoken. Britain will (absent any new deals) leave the EU. 

Under the EU Treaty, the exit process should take at least two years. During this two-year period, UK-based asset management entities, including UK subsidiaries of US and other overseas firms, will continue to take advantage of current EU rights but will need to adapt their businesses to the new reality.  

This will, subject to the terms of separation, include:

• UK-domiciled Undertakings for Collective Investment in Transferable Securities (UCITS) funds and alternative investment funds (AIFs) would lose their EU marketing passports. UK UCITS funds would become AIFs. If EU marketing is required, UK funds could either be marketed under the Alternative Investment Fund Managers Directive (AIFMD) national private placement regimes (where these are permitted) or they could be re-domiciled to an EU member state. Extending the AIFMD third country passport to the UK would mean UK AIFs could continue to be marketed into the EU without substantial change, and UK UCITS funds could be marketed to professional investors in the EU as AIFs. Existing and new Irish, Luxembourg and other EU-based UCITS and AIFs will, subject to the following, continue largely as before and the two-year period will allow plenty of time to add new ones where required. Dechert is uniquely positioned to......................

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