On November 19, 2018, HM Treasury published a draft version of the Long-term Investment Funds (Amendment) (EU Exit) Regulations 2018. The draft Regulations correct deficiencies in the directly applicable European Long-term Investment Funds) Regulation to be retained on Brexit, which governs funds that invest into infrastructure and other long-term projects. The draft Regulations will primarily affect fund managers operating ELTIFs registered in the U.K.
The draft Regulations will create a U.K.-specific regime, which will enable eligible funds to obtain "Long-term Investment Fund" designations. U.K. managers of ELTIFs already authorized or registered with the U.K. FCA would be automatically included in the U.K. regime. HM Treasury has published similar onshoring legislation for the European Venture Capital Funds Regulation, which governs funds that invest into small and medium- sized enterprises, and the European Social Entrepreneurship Funds Regulation, which governs funds that invest into social investments. U.K.-specific regimes for these funds will also be created, allowing designation as a Social Entrepreneurship Fund or Registered Venture Capital Fund.
HM Treasury intends to lay the draft Regulations before Parliament before exit day.
The draft Regulations are available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/757164/Long-term_Investment_Funds_SI_Draft_Text.pdf, the explanatory information is available at: https://www.gov.uk/government/publications/draft-eu-exit-sis-for-investment-funds-and-their-managers/venture-capital-funds-amendment-eu-exit-regulations-2018-social-entrepreneurship-funds-amendment-eu-exit-regulations-2018-and-long-term-inve and details of the proposals for U.K. regimes for Social Entrepreneurship Funds and Registered Venture Capital Funds are available at: https://finreg.shearman.com/uk-legislation-published-to-onshore-the-eu-ventur.
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