AIFM passporting in United Kingdom

1. EEA AIFMs

Following the expiry of the transition period in respect of the arrangements for the UK’s withdrawal from the EU on 31 December 2020, in the absence of agreement otherwise between the UK and the EU, all non-UK funds, including EEA AIFs, are classed as third-country AIFs in the UK. 

This means that EEA AIFMs that have not made use of the UK’s short term temporary marketing permissions regime in respect of the EEA AIFs they manage, need (unless they are recognised under s 272 of the Financial Services and Markets Act 2000), to comply with the UK’s National Private Placement Regime and the UK’s financial promotion rules (as applicable) in the same way as AIFMs based in non-EEA (third country) jurisdictions wishing to market third-country AIFs are already required to do.

A summary of the UK private placement regime can be found at Private placement rules and law in the UK | CMS Expert Guides.

However, the UK government has made provision for a new overseas funds regime (OFR) through the Financial Services Act 2021. When it comes into force, the new system will give the UK Treasury the ability to determine whether a third country jurisdiction and funds established in that jurisdiction are equivalent to a UK authorised fund (these are funds which have been approved by the FCA for marketing to retail investors in the UK). This will allow them to benefit from a simplified process to enable marketing to UK retail investors.Financial Services and Markets Act 2000 (“FSMA”)

2. Third country AIFMs.

Until the OFR comes into effect, AIFMs based in third country jurisdictions wishing to market EEA and / or Non-EEA AIFs in the UK will be required to comply with the UK’s National Private Placement Regime, as well as the UK’s financial promotion rules as applicable.

3. Pre-marketing

The UK does not have a separate regime for pre-marketing. Pre-marketing is subject to the same financial promotion rules as any other marketing of a fund in the UK.

4. Fees

N/A.