Were you secretly relieved when May’s heat wave turned into grey skies and rain? I was. I find it easier to spend time at the desk when the sunshine outside isn’t filling my head with thoughts of sun loungers and dips in the sea. I’ve spent the month writing a series of articles examining the impact of Brexit on the asset management sector. These looked at how important being a member of the EU had been for this industry and then went onto to examine the impacts of being outside of particular regulatory frameworks on the industry. They also discussed the effects of the EU tightening rules and UK divergence. Next month I’ll be focusing on my sustainable investment series.
Brexit and asset management – part one
As not everyone understands the intricacies of the asset management, the first in the series aimed to explain the purpose and structure of the industry. It also outlined how important it has been for the sector to be a member of the EU. Data from the latest Investment Association survey shows UK firms managed 37% of the European assets – a disproportionate amount as we were one of 31 EEA nations.
Brexit and asset management – part two
With the fundamentals of the industry established, it was time to look at the impact of being outside of the EU for asset managers. This article focused on the impact of the loss of the Ucits passport and how firms now have to domicile both funds and management companies within the region. It discusses how the EU is reviewing which business operations can be carried outside of the region. It is likely asset managers will have re-locate more staff and assets to the region over time.
Brexit and asset management – part three
The third – and final – part of the series showed the asset management sector can no longer sell its investment funds to clients in the EEA using UK-based sales and marketing teams. These now need to be located within the region to take advantage of the passporting advantages of another regulatory framework known as Mifid. It also takes a look at the UK’s Taskforce on Innovation, Growth and Regulatory Reform proposals to ditch best execution reports required by Mifid. But firms have already built the systems needed to comply with these rules so managing different reporting requirements in the EU and the UK will create a headache for companies.
Over the summer, I’ll return to my sustainability investment series. I’ll take a deeper dive into the different styles of sustainable investing and examining the pros and cons. I’ll also take a look at some of the big areas of debate such as the benefits of exclusion compared with engagement.