The European Securities Markets Authority (ESMA) has signed an agreement with the UK Financial Conduct Authority (UK FCA) which provides a framework for supervisory cooperation between ESMA, the EU 27 national competent authorities and UK FCA, in the event of a no-deal Brexit.
EFAMA said: “Having such supervisory cooperation agreements in place is required under different EU legislation (such as UCITS or the Alternative Investment Fund Managers Directive) to make it possible to delegate portfolio or risk management to an entity in a third country, like the UK.”
It added: “Delegation is a reliable, well-functioning model, central to ensuring investors are provided with better value and choice.”
EFAMA affirmed the importance of regulatory and supervisory cooperation between ESMA and the UK FCA. It said this is crucial and will require substantial resources to be dedicated on both sides.
Tanguy van de Werve, director general at EFAMA, said: “This is a very important step that EFAMA has been calling for many months, as it will help avoid disruptions in the provision of asset management activities.”
He added: “Ensuring that delegation continues to be authorised as it is today is of paramount importance to the asset management industry. It brings comfort to the industry in their Brexit contingency planning but, most importantly, it ensures that EU investors will continue to access world-leading expertise in the management of their savings.”
