HM Treasury Consultation on the treatment of overseas funds16 March 2020
Last week HM Treasury (HMT) in the UK published a formal consultation on the treatment of overseas fund recognition which will come into place post Brexit.
Irish Funds will be responding to the consultation primarily co-ordinated through the Brexit Steering Group, with input from the UK Distribution WG and other relevant groups. The deadline for responding to the consultation is May 11, if you would like to contribute to the response please contact Kieran Fox, (Kieran.firstname.lastname@example.org).
HMT is proposing 2 regimes, one for recognising overseas retail funds and one for Money Market Funds, with both operating on ‘outcomes-based equivalence’ advice from the FCA. This should mean decisions about equivalence are based on similar regulatory outcomes around investor protection and independent depositaries.
In order to grant equivalence, HMT must be satisfied that:
- the regulatory regime achieves ‘at least equivalent standards of investor protection’ to comparable UK authorised funds, and
- there are, or will be, regulatory cooperation agreements in place between the FCA and the relevant national competent authority.
In the consultation, HMT refers to certain obligations which may apply to all retail funds as ‘conditions for operating within the UK’ and expect all overseas retail funds to comply with the following;
- disclosure about access to the Financial Ombudsman and role of alternative dispute resolution,
- provision of investor facilities in the UK and the use of authorised persons in the UK to make or approve financial promotions,
- regular reporting to the FCA on changes to fund governance arrangements, and
- payment of regulatory fees for the operation of the ORF regime.