Following the acquisition of GFR (Global Funds Registration) by FE earlier in 2017, we spoke to Martin Neason, Director at FE Global Funds Registration (GFR), to find out how he and his team work with their clients on a daily basis. We asked Martin about the challenges of cross-border funds’ registrations, Europe’s regulatory landscape , and the impact that Brexit may have on FE’s clients.
- What is your role at FE and how long have you been involved with GFR?
I have been involved with FE GFR since its inception in 2006 and my tenure has continued through the acquisition of GFR in 2017 by FE. My role is basically to manage the operations of the team on a day to day basis as well as assisting with the promotion of GFR and the acquisition of new business.
- Could you briefly outline what the FE Global Funds Registration service is?
Our team provides specialised project management centred around the overseas registration of what are predominantly UCITS funds. We provide information, advice and guidance on the regulatory requirements of a fund’s target jurisdiction and then work with the fund and the necessary regulators to ensure the registration is arranged and then maintained, with as little impact on resources for the fund group as possible.
- Which country or jurisdiction in your view is the toughest when it comes to regulatory requirements?
The toughest at the moment is Spain. This is not due to regulatory requirements as such, rather the local tax requirements and the fact that there is a significant number of parties involved. The process often involves having conversations and negotiating with the tax authority rather than following formal procedures.
Outside of Europe, Hong Kong is famous for the length of time it can take to register a fund there. We have known it to take up to nine months to register a fund instead of the standard six to eight weeks.
- What do you see as the most pressing challenges for clients and the industry in general currently?
Well, the main challenge for clients is obtaining the information that they need in order to register their funds abroad. Each regulator is meant to publish their own requirements on their website but really, it’s not always very clear and although usually written in English there is a myriad of pages and sites that an asset manager would have to trawl through. If they come to us we can provide all the information in a comprehensive, clear and easy to understand manner.
In terms of more general industry challenges at the moment, the main one is the upcoming change to German tax requirements, which are still being confirmed and implemented.
We have been proactive though - we have already spoken to a number of German tax advisers to try to get a consensus of opinion as to what the final version of the regulation will look like and also what the market expectations are likely to be. If you are a fund manager you would have to spend precious time trying to contact and speak to all the different parties to find out what we can find out far more easily through our extensive network.
- What impact is Brexit having on the industry?
The problem with Brexit is that no one knows what is going to happen and that is creating some uncertainty for sure. Much of the confusion is based around where a fund should be domiciled. If the fund is domiciled in the UK, is the fund group going to be allowed to distribute its funds in mainland Europe as easily as they do now? Is the UCITS passport still going to apply or do they need to consider redomiciling the fund in an EU jurisdiction, for example Dublin or Luxembourg? We have had a couple of existing clients actively looking at where they might relocate their funds.
Alternatively, some fund groups have set up mirror funds – they maintain their UK fund which is domiciled in the UK but have set up a fund with the same investment strategy in another location. There are number of big names who have decided to do that. We are all just waiting to see what the ultimate impact of Brexit will be.
- Given all the uncertainties and challenges of cross-border registrations, how can FE GFR help?
We have over a decade’s experience in cross-border fund registrations and we know the hurdles and pitfalls that a fund group needs to avoid.
The level of administrative support that we provide is extensive. We can literally be given a prospectus and a list of countries and we can find a solution, without engaging the fund group at all. We also have a comprehensive network of the essential third parties: lawyers, translators, paying agents – which gives us a competitive advantage over most firms.
In a nutshell, FE GFR makes fund passporting easy and hassle-free for asset managers looking to sell their funds in international jurisdictions.
For more information about FE's cross-border funds regstration, please contact us