ALFI responded to the UK Financial Conduct Authority (FCA) public consultation on the on paper CP23/26 ”Implementing the Overseas Funds Regime”.
ALFI, the representative of the Luxembourg investment fund and asset management industry, welcomes the public consultation on the implementation of the UK Overseas Funds Regime (OFR).
As at end of June 2023, the United Kingdom was within the top 5 countries of distribution for Luxembourg funds, and 49 of the top 50 Luxembourg fund promoters had registered their products for sale in the UK. Also, at that date, UK fund initiators were the second largest active fund houses in Luxembourg, with 17% of assets under management.
ALFI is thus pleased to hereby provide its views in this regard and you may find here below its responses and comments to the specific questions raised in this consultation.
Chapter 2 – The wider context
Q1: What, if anything, do you consider to be unintended consequences of our proposed intervention?
As a preliminary remark, ALFI would like to outline that overseas funds marketed in the UK, such as Luxembourg products, contribute to the diversity and quality of the products offered to the investors in the UK market. In our view, the amendments that are planned to be brought through the OFR should therefore not have the effect of reducing the attractiveness of Luxembourg products in the UK.
• Access to the UK market: As a general point, ALFI calls for the envisaged changes to the Temporary Marketing Permissions Regime (TMPR) to be limited to the strict minimum. ALFI fully supports the need for adequate investor protection, it is however also important to not disrupt the current state of the market and ensure that UK investors have access to a broad range of high-quality products. Requirements for additional information and documents could in fact easily result in barriers to market access.
It is further to be considered that Luxembourg investment funds are regulated products under EU rules and are also subject to the supervision of the Luxembourg national regulator. The existing level of regulation and supervision that provides for such a high standard should be considered when implementing the OFR...
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© ALFI - Association of the Luxembourg Fund Industry
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