19th February 2020
Following our last Annex IV update at the start of February, we received a large number of questions from clients about the impact of Brexit on Annex IV reporting. Clients are asking whether there is any clarity on what the reporting regime will look like when the transition period ends and UK whether mangers with UK funds will all be categorised as “non-EU".
As we are in the transition period until the end of the year, we fully expect all submissions for the period up to 31st December 2020 to be submitted to the Financial Conduct Authority ("FCA") as usual.
We understand that industry bodies are lobbying the UK Government for clarity on how financial services will interact post-Brexit. How AIFMD in general or Annex IV reporting specifically will be handled for the period commencing 1st January 2021, is not yet clear.
It may well be that managers with European investors in UK AIFs will be required to submit Annex IV reports to multiple regulators in the same way that is currently required under National Private Placement Regime ("NPPR"). The extent to which any grandfathering for existing AIFs will be available, is as yet unknown.
There are three possible scenarios managers should consider when thinking about their fund operations following the transition period, each dependent on eventual agreements with the EU.
Negotiations pertaining to financial services, including equivalence assessments, were expected to be completed by June 2020. However, given recent headlines this seems unlikely. Although equivalence decisions can be taken rapidly, some have indeed taken several years to conclude. We should hopefully have a clearer indication of the likely outcomes in the second half of this year.
Langham Hall is an award winning global provider of fund administration and AIFMD services to top tier fund managers. To hear more about how we can help, whatever the requirements, please get in touch with a member of our team.