Global Trustee and Fiduciary Services News and Views Issue 48

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Global Trustee and Fiduciary Services News and Views | Issue 48 | 2017 25
years, although there is also no precedent
for the negotiation of a major FTA between
countries that are already convergent in
legal and regulatory terms. It may be that
starting from this position of convergence
enables the terms of a future trade deal to
be negotiated more quickly than comparable
agreements such as CETA. It is not yet
evident, however, that the two-year timetable
for achieving this is realistic.15
What the new Free Trade Agreement (FTA)
might look like is, of course, a matter of
conjecture. On the potential wish list, there
might be the following:
• An open door to skills so that there can be a
good system for cross-border movement of
skilled persons, including those with financial
services skills.
• Some new mutual recognition system for the
UK, for UCITS at least, so that:
Existing UK UCITS that passport into the EU
can continue to do so.
And EU-based UCITS can have a new version
of Section 264 FSMA so they can passport
into the UK. (One suspects there is little
appetite for replacing much of the fund range
currently promoted into the UK, notably, for
example, Irish-based ETF products.)
• A sound understanding on how delegation
arrangements can work effectively to UK-
based portfolio management teams in respect
of all three strands of a UCITS delegating
portfolio management, an AIFM delegating
portfolio management and a MiFID firm’s
delegation of investment management.
• And, on the understanding that there is such a
high level of interconnectedness between the
UK and Europe regarding financial markets,
some cooperation between regulators
continuing, particularly in communications
relating to ESMA workloads.
Pending certainty emerging from the Brexit
negotiations, and clarity on the timetable, UK
asset managers now need to plan – possibly on
a number of alternative bases. Not surprisingly,
UK asset managers are having to assume the
“worst-case-scenario” basis, at least as one of
their working models, so that they are prepared
for anything. Perhaps we should regard any
potentially creative and constructive outcome
of the post-Brexit deal as a bonus?
1 The chart is extracted from the European Commission’s
white paper: The Future of Europe: Reflections and
Scenarios for the EU27 by 2025, issued on 1 March 2017.
2 See
repeal-bill-white-paper, last downloaded on 11 May 2017.
Link
3 See
europe-reflections-and-scenarios-eu27_en, last downloaded
on 11 May 2017. Link
4 See
european-council/2017/04/29/, last downloaded on
11 May 2017. Link
5 See
BRIE/2016/577971/EPRS_BRI(2016)577971_EN.pdf:, last
downloaded on 11 May 2017. Link
6 Paragraph 1.21 HM Government White Paper: The United
Kingdom’s exit from, new partnership with, the European
Union CM 9417.
7 For a summary of the Act, see
bills/2009-10/constitutionalreformandgovernance.html, last
downloaded on 11 May 2017. Link
8 See
esma-advises-extension-funds-passport-12-non-eu-countries,
last downloaded on 11 May 2017. Link
9 For further development of this idea see speech “The
High Road to a Responsible, Open Financial System”
by Mark Carney, Governor of the Bank of England and
Chairman of the Financial Stability Board, delivered on
7 April 2017, accessible via .
last
downloaded on 11 May 2017. Link
10 See
work-programme, last downloaded on 11 May 2017. Link
11 Steven Maijoor, Chair ESMA, closing keynote speech, CMU
Mid Term Review Public Hearing, European Commission
Brussels, 11 April 2017.
12 See
publications/Consultation-Papers/cp86/161219_cp86-
feedback-statement_third-consult_final_rhd.pdf?sfvrsn=4,
last downloaded on 11 May 2017. Link
13 For a more detailed summary of the CP86 package, please
see the separate article from A&L Goodbody, included in
this publication.
14 The Probability Risk and Impact SysteMTM (PRISMTM) is
the Irish Central Bank’s risk-based framework for the
supervision of regulated firms.
15 Paragraph 45 House of Commons Select Committee Report
published 29 March 2017, and for further information see
paragraph 283 of that Report.
Kirstene Baillie
Partner
Fieldfisher LLP
With grateful thanks to Brian McDermott
of A&L Goodbody for the views concerning
the Irish regulatory position in this article.