Tuesday, 8th December 2020
The Irish Funds Brexit Steering Group prepared a non-exhaustive list as a guide for identifying some of the main issues which may arise during Brexit planning.
The note covers:
- staff availability
- interaction with CBI
- CBI approach in relation to the UK's exit (including for example investment by UCITS and RIAIFs in UK investment funds)
- data (referencing Schrems II, EDPB recommendations and guidance from the Data Protection Commissioner in Ireland)
- staff eligibility to work and travel
- fund documentation and compliance
- segregated account investment management agreement requirements
- Share Trading Obligation (STO). In October 2020, ESMA published a final position on the STO to supplement their statement in May 2019. The latest position provides an exemption for any EEA ISIN being traded on a UK trading venue, but only where it is being traded in GBP. Early December, the FCA also issued a statement on their approach to the application of the STO following the end of the Brexit transition period. The FCA will allow UK firms to continue trading all shares on EU trading venues.
- Derivatives Trading Obligation (DTO). Absent the required equivalence decisions, EU counterparties subject to the DTO and UK counterparties wishing to trade derivatives with each other after the end of the transition period will face conflicting requirements where the derivatives fall within the scope of the EU and UK DTOs (in-scope derivatives). On 25 November, ESMA published a public statement clarifying that the DTO will apply, unchanged, following the end of the transition period on 31 December 2020.
- UK Temporary Permissions Regime (TPR). (In October, the UK published the financial services bill which contains provisions for the TPR period to be extended to 5 years).
- UK Overseas Funds Regime
- counterparties
- system updates
- regulatory environment in the UK
