Brexit and UK funds' and fund managers' cross-border notifications
The UK left the EU on 31 January 2020 with a Withdrawal Agreement. It has entered a transition period which is due to operate until 31 December 2020. During the transition period, EU law will continue to apply to UK funds and fund managers.
Here are some preliminary instructions that the FIN-FSA has prepared for the UK funds and fund managers (AIFMs and UCITS). The FIN-FSA continues to follow the Brexit situation and will update or change these instructions when needed. Please notice that ESMA (European Securities and Markets Authority) hasn't given any common instructions or guidelines on this matter.
After the transition period UK will be considered a third country and all UK funds are considered to be third country AIFs. This means that if the fund or the manager is domiciled in the UK and wishes to market or continue to market funds in Finland they need to send a notification according to Article 36 or 42 of the AIFMD. Marketing for non-professional investors will be prohibited after the transition period.
Instructions for the notification can be found under Cross-border activities, third countries. The notification is to be submitted by email to kirjaamo(at)fiva.fi, header of the email: "Notification: AIFM Act, chapter 20, section 3 – management company name - Brexit" or "Notification: AIFM Act, chapter 20, section 2 – management company name - Brexit". The marketing of an AIF may commence when the manager has received an announcement to that effect from the FIN-FSA.
Please note that any existing UCITS or AIFM notifications under the current EU passports will no longer apply at the end of the year. The only way to continue marketing in Finland is to send a new notification according to Article 36 or 42 of the AIFMD. All those managers or funds that haven't applied for a new notification until the end of the year will be automatically de-registered and removed from the FIN-FSA’s register and are not allowed to continue marketing in Finland.
Notifications that have all the required information and that have been submitted to FIN-FSA according to the instructions by the end of November 2020 will be processed during December 2020. However approval letters for marketing will be sent during the first week (week number 1) of January 2021 after the transition period has ended. FIN-FSA will keep a list on its website of those fund managers and funds whose notification has been processed and who will receive an approval letter at the beginning of January 2021.
If the notification is incomplete the FIN-FSA will sent a request to supplement the notification. When the notification is incomplete the above mentioned schedule won’t necessarily apply. The processing of the notification will continue only after all the relevant information has been submitted to the FIN-FSA. Please note that to be able to market funds in January 2021 in Finland you need to have FIN-FSA's approval for marketing.
You may also send the notification after the end of November 2020 but we cannot guarantee that the notification is processed before Brexit.
Question and answers
Q: Does the AIFM need to submit a notification if the AIF has Finnish investors after Brexit but the AIF is no longer marketed in Finland from 1 January 2021 onwards?
A: The AIFM needs to submit a notification only if the AIF is marketed in Finland after Brexit.
Q: The AIFM has started conversations with Finnish investors in 2020 but investors are planning to make an investment in the AIF in 2021. Does the AIFM need to submit a notification in this situation?
A: Investors cannot make an investment in 2021 without an approved notification.
UK funds and fund managers whose notifications have been processed
These funds can be marketed in Finland from 3rd of January 2021 onwards:
- European Commission’s notice to stakeholders
- FIN-FSA’s instructions on the notification process for third country firms
- Information on AIFMD reporting
- ESMA tells market participants to continue preparations for the end of the UK transition period.
- New notifications: kirjaamo(at)fiva.fi, header of the email: "Notification: AIFM Act, chapter 20, section 3 – management company name - Brexit or Notification: AIFM Act, chapter 20, section 2 – management company name - Brexit "
- Brexit-related questions: AIFMquestions(at)fiva.fi