25 March 2019
Guernsey and Jersey secure UK market access post Brexit
Guernsey, Jersey and the UK have together acted to ensure that Guernsey and Jersey funds may continue to be marketed to UK investors post Brexit.
While the UK is a member of the EU, the ability of Guernsey and Jersey funds to be marketed by private placement in the UK is predicated on compliance with the requirements of the European Union's Alternative Investment Fund Managers Directive ("AIFMD").
Following the exit of the UK from the European Union, the AIFMD will cease to be a part of UK law. In anticipation of exit, the UK Parliament has passed the Alternative Investment Fund Managers (Amended, etc) (EU Exit) Regulations 2019, which amend the Alternative Investment Fund Manager Regulations 2013. The effect of those amendments is to remove any reference to the AIFMD from the UK Regulations such that private placement in the UK operates independently from the rest of the EU.
One of the principal requirements of both the AIFMD and the UK Regulations is that the supervisory authorities in respect of any jurisdiction where a fund manager is based, must have entered into a Co-operation Agreement or Memorandum of Understanding with the Financial Conduct Authority (FCA). On 12 March 2019, the Guernsey Financial Services Commission and Jersey Financial Services Commission entered into such a Memorandum of Understanding with the FCA.
In short, Guernsey and Jersey funds can continue to access UK investors via private placement following Brexit – be it hard, soft or no-deal.