It looks like equivalence
Any EU-UK financial services deal will be based on third country equivalence which doesn’t help much. The EU can withdraw from equivalence agreements at short notice and it’s political: the EU Parliament now has influence here.
This matter had been raised extensively in the UK media recently because a senior British official, involved in the Brexit negotiations, said off the record that the UK and EU were close to an agreement on financial services. In response Michel Barnier tweeted the following:
What does no Brexit deal mean?
If equivalence is the most managers can hope for from an EU-UK agreement for what does no deal look like? Obviously no passporting rights but also changes to delegation rules putting UK managers in a worse position from other third country managers.
The substance struggle
The CBI, the CSSF and ESMA all want more local substance in EU fund structures post Brexit. But substance is difficult, if not impossible, to define. Is it local management and control or certain staff levels or both? Guidance is needed.
Coming soon ManCo 2.0: the hybrid
To meet ill-defined EU substance requirements some ManCo platforms are looking to develop a hybrid model that includes staff on secondment from UK managers fleeing Brexit. This will change ManCos.
Help for US managers
The Tracker is publishing a Guide for US managers interested in distributing funds in the EU. It provides advice on selection of ManCos, domiciles and service providers. Contact Tamara Sims firstname.lastname@example.org for details.