Funds Update | October 2017

Written on 16 Oct 2017

Welcome to the latest edition of Osborne Clarke’s Funds Update.

We hope that you find it interesting. If you would like to discuss any of the content, or have a subject that you would like us to cover in a future edition, please let one of us know. Our contact details are set out below.

We would also like to take this opportunity to introduce you to Michael Lewis, our new general financial services regulatory partner, who recently joined us from Pinsent Masons. Michael has particular expertise in regulatory capital, client assets and conduct of business regulation. He advises on new business and product launches, the application of UK and EU financial services legislation, FCA rules and the regulatory aspects of acquisitions and disposals in the financial sector.

FCA’s Asset Management Study | an overview of the key findings and remedies

On 28 June 2017, the FCA published both its final report on the Asset Management Market Study and a consultation paper which looks at implementing some of the remedies and changes to the FCA handbook. The Final Report confirms both the findings set out in the interim report and a number of the remedies that were proposed back in November 2016.

In this article, we provide an overview of the proposed remedies set out by the FCA in light of its findings and consider when these are likely to be implemented and therefore directly impact your business.

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Senior Managers and Certification Regime | how and when will this impact your business?

On 26 July 2017, the FCA published a consultation paper which looks at extending the Senior Managers and Certification Regime to all FCA firms. In this article, we consider why the regulator is intending to extend the scope of the regime to effectively replace the current Approved Person regime, what it will mean for your firms and when you can expect final rules.

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ESMA’s opinion on investment management | what are the key points?

On 13 July 2017, ESMA published three opinions setting out sector-specific principles aimed at supporting supervisory convergence in the context of requests from UK financial institutions seeking to relocate to the EU27. In this article, we consider the key points in the context of investment management.

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Limited partnerships | the use of subscription lines

In June 2017, the Institutional Limited Partners Association issued guidance in relation to the use of subscription lines by GPs of private funds. We consider the recommendations and the likely practical impact.

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Limited partnerships | update on the new PFLP regime

In our previous Funds Update in June, we set out the key benefits and conditions of the new private fund limited partnership regime which came into force on 6 April 2017. It is now nearly 6 months since PFLPs were introduced, and in this article we provide a brief update on the popularity of PFLPs, as well as outlining one issue which is yet to be resolved. In summary, while there is evidence of PFLPs being established, in our view the new regime is yet to have a major impact within the funds industry.

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Irish Investment Limited Partnership: private equity reform

On 19 July 2017, the Irish Finance Minister announced that the Government had approved the legal drafting of the Investment Limited Partnership (Amendment) Bill 2017. Whilst an ‘Investment Limited Partnership’ was established in 1994, very few asset managers have availed themselves of the structure, with most concerned with the legislative limitations, which include:

  • the requirement for a separate GP for each partnership and minimum capital requirements for the GP; and
  • a requirement to file the LPA with the Central Bank which means it is then publicly available.

The purpose of the Amendment Bill is to enhance and reform the existing legislation, to align it with international standards for private equity funds and certain requirements of AIFMD. It is currently progressing through the Irish Parliament so we are likely to see further details over the coming weeks.

With a number of fund managers looking to establish English Limited Partnership style funds outside the UK, the proposed Irish reforms will give fund managers more options when considering post Brexit structures.