FIN-FSA Launches “Brexit Notification” for UK Fund Managers and UK Funds – Deadline 30 November 2020
13 October 2020
Authors: Sanna Boow, Jari Tukiainen and Senni Mäki-Hallila
As a result of Brexit, UK fund managers and EU fund managers of UK funds will lose their current fund marketing permissions in Finland after the end of the transition period under the Withdrawal Agreement, unless the fund managers obtain a post-Brexit marketing permission.
The Finnish Financial Supervisory Authority (the “FIN-FSA”) invites UK fund managers and EU fund managers of UK funds to submit new marketing notifications under Article 36 or Article 42 of the Alternative Investment Fund Managers Directive (the “AIFMD”) by 30 November 2020 under the new regulatory guidance issued by the FIN-FSA on 12 October 2020.
Following the approval by the Finnish regulator of the notification, UK fund managers and EU managers of UK funds will be able to continue to market their funds in Finland uninterrupted after the end of the transition period.
Fund managers that have not obtained a new marketing permission by the end of the transition period will be automatically de-registered and removed from the FIN-FSA’s register and will not be permitted to continue marketing in Finland.
New notifications under Article 36 and Article 42 of the AIFMD required for UK funds and fund managers
After the end of the transition period, the UK will be considered a “third country” under EU law, and all UK funds (including UK based UCITS) will be considered third country alternative investment funds (“AIFs”) under the AIFMD. Any existing UCITS or AIFMD notifications under the current EU passports will no longer apply after the end of the year.
This means that a UK fund manager or an EU manager of a UK fund will need to submit a new marketing notification to the FIN-FSA in accordance with the procedure under Article 36 or Article 42 of the AIFMD (as applicable), if it wishes to continue to market its funds to professional investors in Finland.
UK fund managers will not be able to market to non-professional investors in Finland after the end of the transition period.
New notifications under Article 36 and Article 42 of the AIFMD should be submitted by the end of November 2020
The FIN-FSA has confirmed that new Article 36 and Article 42 marketing notifications that are submitted by the end of November 2020 will be processed by the FIN-FSA by the end of December 2020. However, this requires that the marketing notification includes all the information required by the FIN-FSA.
If the marketing notification is incomplete, the FIN-FSA will ask the fund manager to supplement the notification, and the processing of the notification will continue once all the relevant information has been submitted to the FIN-FSA. If the fund manager fails to provide all the necessary information, there is a risk that the notification will not be processed by the end of December 2020. If that happens, the fund manager must cease any marketing of the relevant fund in Finland on 31 December 2020 until the FIN-FSA has approved the new notification.
According to the FIN-FSA, the fund manager will not necessarily receive its marketing approval letter by 31 December 2020, but these will be sent during the first week of January 2021. The 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.
The FIN-FSA continues to follow the Brexit situation and will update or change its guidance when needed.
Hannes Snellman assists with marketing notifications
In order to ensure that UK fund managers or EU fund managers of UK funds can continue to market their funds uninterrupted after the end of the transition period, it is critical that the new marketing notification is submitted on time (on 30 November 2020, at the latest) and that the notification meets all FIN-FSA requirements.
Hannes Snellman has a dedicated regulatory team with broad experience in assisting fund managers in completing their marketing notifications successfully and with short notice. Since the implementation of the AIFMD regime in Finland, our team have assisted international clients in over one hundred marketing notifications to the local regulator. We are available to discuss any questions and are happy to assist.