This note sets out at a high level the potential impact of the United Kingdom’s (“UK”) exit (“Brexit”) from the European Union (“EU”) without a negotiated agreement on UK and European Economic Area (“EEA”) (a) alternative investment fund managers (“AIFMs”), (b) UCITS management companies (“ManCos”) and (c) investment management firms operating under a Markets in Financial Instruments Directive (2014/65/EU) (“MiFID”) licence.

These observations are subject to change – in fact, they may well do so, as the political and regulatory approach to Brexit continues to evolve.

This note assumes, for the purpose of forward planning (save as expressly noted) that:

no specific terms are put in place for the UK financial services sector in connection with Brexit, in effect, a “hard Brexit” following which the UK will be treated by the remaining EU member states (the “EU 27”) as a “third country”; the UK will implement EU law “as is” into domestic law with effect from the date of exit, with the UK and Gibraltar being the only “EEA states” for such purposes and all other states, including the EU 27 being, from the UK perspective, third countries; and the UK will continue to provide a level of access to the UK market for products or managers from the EU 27, including alternative investment funds or “AIFs” within the meaning of the alternative investment fund managers directive (2011/61/EU) (“AIFMD”) and undertakings for collective investments in transferrable securities or “UCITS” within the meaning of Directive (2009/65/EC) (the “UCITS Directive”), and management entities including AIFMs and ManCos and investment firms holding a MiFID licence...