Canada is an attractive distribution market for UCITS funds, according to a report by Royal Bank of Canada (RBC) Investor and Treasury Services and Borden Ladner Gervail LLP.
The report found that due to newly streamlined and nationally harmonised regulation system, the Canadian market is well prepared to facilitate the distribution of UCITS finds to qualified investors.
The market also offers some regulation exemptions to global asset managers when they’re distributing UCITS to qualified investors, that is, high net worth (HNW) and institutional investors.
Canada is home to the world’s fifth largest pension industry, which is expressing an increasing interest in the global assets market. Also, distributions can use European disclosure documents, making transactions simpler.
The country is also home to the world’s eighth largest population of HNW investors and the eighth largest mutual finds market.
Alfred Page, partner and national practice leader of securities, capital markets and public companies at BLG LLP, said: “Canada’s securities regulatory framework gives global players the opportunity to enter Canada and distribute UCITS funds – a brand of investment fund that is well understood in Canada – to qualified investors. This creates significant opportunities for international fund managers and allows greater investment choices for Canadian HNW and institutional investors”
As of the 30 June, worldwide net assets of UCITS amounted to $10.2 trillion, and 48 percent of these were domiciled in Luxembourg and Ireland.
The report pointed out that, with offshore centres in both of these domiciles, and 25 years of experience administering UCITS in each, RBC would be conveniently placed to assist in introducing the funds to Canada.
Sébastien Danloy, managing director for continental Europe and offshore at RBC Investor and Treasury Services said: “European and North American fund managers are increasingly looking to broaden and diversify their distribution strategies internationally.”
“The overall cachet of the UCITS brand, along with a large Canadian investor base, and harmonisation of the regulatory environment make Canada an attractive UCITS distribution market for international fund houses.”
