Ireland: What's Next For Post-Brexit Fund Management?

We now know the result of the UK's vote but none of us - the UK included - know what the consequences are or might be. We have seen market turmoil today but that may calm down in the short term, but the fallout from yesterday's Brexit vote will remain and it might prove to be a messy divorce. There may even be some immediate pressure from EU governments to accelerate the 2 year time frame for negotiation of the UK's exit given the impact on EU businesses, particularly exporters to the UK, who may be suffering from dramatic fluctuations in the Euro/Sterling exchange rate.

In the Asset Management and Investment Funds sector - one of our principal practice areas - the impact will very much depend on where one's target market is and what one's longer term objectives may be. Yes, it is true that we don't know the terms (let alone the outcome) of the exit negotiations but it would appear very strange to us if, having said all that it has, the UK would end up in the EEA. We don't see the UK in the EEA but very little is certain at this stage other than that the UK will not be within the EU.

So what might some of the more immediate consequences of Brexit be for the Asset Management and Investment Funds sector?

Member State Regulated Market

An initial consequence is that the London Stock Exchange will not be an EU Member State regulated market. That will have an impact on market abuse rules as well as on admission to dealing and public offer rules and, in addition to the Market Abuse Directive, the Prospectus Directive and the Transparency Directive. Funds and their managers will need to look at the impact of Brexit on audit regulations and on so much more.

Be wary that some little things can trip you up. A UCITS, for example, can generally only invest in instruments which are listed or traded on the recognised exchanges set out in its prospectus. Those lists capture all markets and exchanges in EU Member States and also EEA members, but without naming them individually. If the UK is not in the EU and does not join Iceland, Liechtenstein and Norway in the EEA, then until the prospectus is changed to list the UK markets by name, investing on those markets is not allowed. Small job to change, but don't forget to do so (for all your funds.....).

Check your investment policies too!

UK MiFID firms managing Irish Funds

What about UK asset managers managing Irish domiciled funds? At one level, there should be no immediate change.

Irish law as it currently stands allows an asset manager from outside the EU to provide asset management services to non-natural person Irish based clients without requiring a separate authorisation. So a UK firm acting as an asset manager to an Irish UCITS or AIF will still be fine but will need to go through a Central Bank approval process (under funds legislation), being treated no differently to (or no better than) , for example, a US asset manager. Those already approved should not require any new approvals.

Investment Services to Irish retail clients

This will be a problem. Without an EU passport or a local Irish head office authorisation, selling to/servicing retail clients in Ireland may face a big problem so it is worth careful consideration with your advisers.

Distribution capacities for UK firms managing Irish UCITS

Remember that fund sponsors set up funds which they seek to manage and which they seek to distribute. Where and to whom they distribute are key factors in any discussion of distribution post- Brexit?

If you are a UK manager managing an Irish UCITS which you sell mainly or exclusively in the UK, the impact on you may be minimal (although remember that to be a UCITS the fund has to be promoted for sale somewhere within the EU) as UK rules will govern your distribution activities as well as the capacity of the UCITS itself to enter the UK market.

There will likely have to be a new notification process for the UK, new arrangements entered into between the Central Bank and the FCA and, possibly a UK Supplement for your prospectus. None of that should be problematic.

However, if you are looking to sell into the EU the position changes. The EU distribution capacity of a UK investment manager (given its role as a promoter or sponsor of the Irish UCITS) will be negatively impacted as it will not (unless the exit negotiations provide a solution) have the benefit of any EU passport to do so. That will mean that it will either need to engage suitably authorised distributors in the local markets who have the requisite capacity or to set up its own EU based distributor (or UCITS ManCo) or look to more imaginative solutions like, for example, having board members of the UCITS represent it in cross border sales, given that it is the UCITS itself which has the passport. A UCITS may even hire its own employees to market it but remember that you will need to look at where sales charges go and the impact of such proposals on the tax status of the UCITS, not to mention employee rights.

What about AIFs ?

In the case of the alternative investment fund (AIF) industry, the position will also be somewhat different.

Remember, for a start, that in the AIF space the product doesn't get a passport. The two passports under AIFMD go with the AIFM. So it's quite different to UCITS.

Noting that there are two AIFM passports, one of managing and one of marketing, a UK AIFM will probably become what is known as a non--EU AIFM and so may well end up being treated just like a non-EU AIFM from the US.

It will not have the capacity to market its EU domiciled AIFs cross-border within the EU. It also will not have any passport to manage cross-border within EU but should be able to act as investment manager to Irish funds in the same way that a US manager can.

But if you want more....

All of the above might not be a problem for you if you are a UK based UK centric manager.

However, if you are a UK manager with plans to develop a business off the back of the large EU marketplace or if you are a US manager, for example, looking to establish a European beachhead for your fund products or asset management services, you might want to consider a jurisdiction which facilitates growing your business.

What might that involve? You might want to consider:

  • setting up a UCITS Manco or AIFM (or Super ManCo) in Ireland
  • using a third party AIFM (but that may not solve practical distribution issues)
  • putting your product on a third party platform (but that may not optimal for future growth of your business)

Other options or solutions may be available.

And even Governance needs to be considered

A further potential fly in the ointment is the proposal in the Irish Central Bank's latest consultation paper on corporate governance in the funds arena that at least two thirds of a fund's/ManCo's directors must be based in the EEA and that least two thirds of designated persons similarly be based in the EEA.

As noted, we don't see the UK joining the EEA. So, if these proposals do go ahead (and if the UK does not join the EEA), we may end up with the result that, from a supervisability perspective it will be okay to have your designated persons based just short of the Russian border but not in Belfast.

So what's the upshot of all of the above. It seems to be no changes for those UK managers who are UK centric, which presumably they will be happy with. For those UK managers who see the EU as a real distribution opportunity or for non-EU managers looking to establish EU based operations, it looks like Ireland will be a pretty good home.

We encourage you to get in touch with any Brexit related queries or concerns that you may have. For more details on how Dillon Eustace can assist you, to request copies of our most recent newsletters, briefings or articles, or simply to be included on our mailing list going forward, please contact any member of our Brexit Team listed on the cover page of this article, or your usual Dillon Eustace contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions