Under the European Union (Withdrawal) Act 2018—which aims, inter alia, to incorporate into U.K. law all applicable E.U. legislation and to give powers to Ministers to make such amendments to retained law as are necessary to deal with any deficiencies arising from withdrawal—HM Treasury has begun to publish drafts of statutory instruments (“SIs”) which will “onshore” E.U. legislation related to the financial markets. This paper considers legal uncertainties arising from the changes proposed by two draft SIs key to investment funds and their managers—the Draft Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018 and the Draft Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2018 (collectively the “draft investment fund SIs”).
The FMLC has highlighted legal uncertainties arising from the draft investment fund SIs, including those related to: (1) references to other legislation; (2) the new regimes for temporary recognition of funds and collective investment schemes; (3) arrangements for delegation by alternative investment fund managers; (4) the restriction on promotion of sub-funds; and (5) the transfer of functions to HM Treasury.
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