Quarterly Funds Update: Autumn 2016
Published on 6th Oct 2016
Welcome to the latest edition of Osborne Clarke’s Quarterly 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.
Execution of the AIFMD marketing passport to third countries: the latest from ESMA
On 19 July 2016, ESMA published its latest advice on the extension of the AIFMD marketing passport to third countries – i.e. extending the right of managers/funds based in third countries to market AIFs to professional investors throughout the EEA on the basis of a single registration. AIFMD includes provision for such an extension of the passport, but requires ESMA’s positive advice before the European Commission can legislate for it.
Here we look at the countries assessed by ESMA so far and the impact this may have, particularly in the UK in the wake of the Brexit vote.
Proposed updates to EuVECA and EuSEF regulations represent a positive step forward
The EuVECA Regulations and EuSEF Regulations allow for the marketing of qualifying venture capital funds and qualifying social entrepreneurship funds to investors throughout the EEA member states by way of marketing passports, and while these passports are similar to those provided under AIFMD, they do have some key differences.
However, both seemingly attractive regimes have seen a very low uptake, leading the European Commission to publish a legislative proposal to amend the regulations in an attempt to increase investment into venture capital and social projects and so achieve the Commission’s aim of establishing a Capital Markets Union.
Property fund suspension: FCA guidance and positive future developments
Several fund managers of open-ended UK commercial property funds announced the temporary suspension of redemption from their funds in early July 2016 in response to receiving unusually high redemption requests from investors following the outcome of the UK Brexit referendum.
Following the temporary suspension of these property funds, the FCA has issued a guidance reminding fund managers that they have a duty to act in the best interests of all investors and must therefore ensure the on-going fair treatment of all investors in their funds.
Capital Markets Union: consultation on the cross-border distribution of funds
In June 2016 the European Commission published a consultation paper on the cross-border distribution of funds, as part of its September 2015 action plan for a Capital Markets Union (CMU). The aim of the CMU is to create a deeper single market for capital in order to strengthen Europe’s economy and encourage investment. The consultation seeks feedback on a number of areas.