Registration of collective investment schemes on a global scale

By Josef El Semari

Do you want to distribute your funds in the European Union (EU), Asia or Latin America? ACOLIN can take care of the cross-border fund registration process of Undertakings for Collective Investments in Transferable Securities (UCITS) and Alternative Investment Funds (AIF) in the EU as well as in selected international markets.

What service does the Global Fund Registration at ACOLIN Europe AG provide?

With the ACOLIN Group as your one-stop shop service provider, we enable smooth and fast market entry, allowing asset managers to focus more on their core competency – the managing of assets. ​

While the European investment fund market remains strongly nationally fragmented from a regulatory point of view, ACOLIN Europe AG as your provider of global fund registration services takes care of the entire cross-border fund registration process and on-going fund governance of UCITS and AIFs in the EU as well as in international markets abroad.

How do asset managers deal with challenges of complex regulatory frameworks?

As an asset or fund manager you might be interested in distributing funds to multiple countries. However, entering new markets can be time and resource intensive due to complex and varying regulations within different countries.

Although the respective country laws within the EU are based on the UCITS Directive and AIFMD, they are significantly lacking harmonization. This leads to a complex regulatory framework that differs from country to country within the EU so that each individual notification process varies according to the regulatory requirements of the relevant host country.

There is for example the legal requirement in the UK to appoint a so-called “Facilities Agent”, in Germany the “Information Agent”, in France the “Centralizing Correspondent Agent”, in Luxembourg the “Paying Agent” and in Spain the “Spanish Representative” in order to distribute UCITS funds in these countries.

This creates a need for foreign local agencies, with varying functions and of course different prices, which has been a big obstacle for the cross-border distribution in the past. At least 17 Member States currently require that local facilities are present on their territory in case of cross-border distribution of UCITS funds, while other Member States do not require a physical presence.

For this reason and due to other hurdles as country supplements or further specific additions to the fund documents and a large discrepancy in the registration and maintenance fees of the respective supervisory authorities, most of the funds in Europe are only distributed within the home country of the manufacturer.

As a result, according to the data provided by the European Commission, in 2017 70% of the assets under management in the EU were owned by investment funds that only operated in their home countries. Only 37% of Undertakings for Collective Investments in Transferable Securities (UCITS) and 3% of Alternative Investment Funds (AIFs) were registered in more than three EU jurisdictions.[1]

By what means does Global Fund Registration at ACOLIN facilitate cross-border registration for its clients?

ACOLIN takes care of the entire cross-border fund registration process of UCITS and AIFs within the EU as well as in selected international markets.

As elaborated before, for several states it is also necessary to appoint local representatives which need to be listed in the legal documents. Therefore, ACOLIN ensures that the fund is compliant with the respective legal requirements, it submits the necessary documentation in the correct form to the relevant authorities and will support you in selecting and appointing local representatives, agents or paying agents.

In this context, for Germany ACOLIN Europe AG acts as the legally mandatory Information Agent and for UK, our subsidiary based in London can act as the legally mandatory Facilities Agent.

Even more special cross-border registrations, such as AIFs to retail investors is feasible, as has been demonstrated by our previous pioneering work.

Once the funds are registered, mandatory regulatory filings will be automatically executed via our state-of-the-art internal database and related overviews can be provided on a regular basis. The latest regulatory amendments are closely monitored and all communication with the national supervisory authorities is managed.

With ACOLIN’s officially recognised electronic publication platform we can even help you to fulfil your fund publication requirements.

You mention the UK: How will Brexit effect you and how are you prepared for a NO-Deal scenario?

 Even though some possible future scenarios are at this stage not foreseeable, we are well prepared.

Since the UK has left the EU it entered an implementation period, which will operate until the end of December 2020. During this time, EU law will continue to apply in the UK and a so-called Temporary Permission Regime (TPR) will take effect at the end of the implementation period. It will allow the continuation of operating in the UK for a limited period while seeking full UK authorization if necessary.

Therefore, on one hand we have already notified our German MiFID entity for the Temporary Permission Regime (TPR) and on the other hand, we have notified the UCITS and EU-AIFs we manage for the TPR as well.

Since we also support funds whose Management Company/ Investment Fund Manager (IFM) has made the TPR notification by themselves, we have exchanged and are exchanging information with them accordingly.

Some questions cannot be answered yet as we do not know which law will be implemented in UK post Brexit, but we surely closely monitor the latest developments and are in close contact with the UK’s Financial Conduct Authority (FCA).

To summarize, ACOLIN is well prepared for all the possible scenarios.

About the Author

Josef El Semari is Vice President and Head of the Global Fund Registration Department of ACOLIN Europe AG, based in Konstanz, Germany. In this function he is responsible for the Global Fund Registration Department of ACOLIN Europe AG which is taking care of the cross-border registration and ongoing fund governance of mutual funds in the EU and in selected international markets. Josef joined ACOLIN more than three years ago and supports company’s clients with his expertise in cross-border registration. He holds a Bachelor of Business Law.