Alternative Market Briefing

Other Voices: UK private funds face Brexit challenges

Thursday, March 04, 2021

By: Elena Faloutsou, Greg Norman, Abigail Reeves - Skadden

The negotiations that culminated in the establishment of the Trade and Cooperation Agreement (TCA) at the end of 2020 concluded with no meaningful agreement in relation to the provision of financial services between the United Kingdom and the European Economic Area (EEA). For the private funds community operating in the UK, this result was disappointing but not unexpected. Private fund sponsors and managers have implemented different solutions since the 2016 Brexit referendum to address this outcome. In this article, we explore some of those solutions and what may follow now that the transition period has concluded.

Takeaways

The TCA failed to provide any meaningful cooperation regarding financial services.
UK-based alternative investment fund managers (AIFMs) remain subject to the same rules as before Brexit, but without the benefit of the marketing passport.
UK divergence from the EU rules on private funds and their managers seems possible but limited in scope.
The UK fund industry continues to lobby to improve the UK as a destination for both fund vehicles and fund managers.

Background

In the UK, the regulations applicable to the management and marketing of private funds have largely stemmed from Directive 2011/61/EU, or the Alternative Investment Fund Managers Directive (AIFMD), which was transposed into the national laws of the EEA member states in 2013. The......................

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