Britain to grant long-term access for EU investment funds

Funds known as UCITS are listed in Dublin and Luxembourg and are widely used by UK investors, but asset managers concerned that obtaining long-term post-Brexit access to Britain could come with burdensome new requirements

Britain said on Tuesday it would grant long-term market access for EU-based investment funds used by UK investors, and without new costly requisites like mandatory valuation assessments, triggering relief in the sector.

Funds known as UCITS are listed in Dublin and Luxembourg and are widely used by UK investors, but asset managers concerned that obtaining long-term post-Brexit access to Britain could come with burdensome new requirements, like having to re-assess the value of assets in their funds.

Britain's financial services minister Bim Afolami said that following a detailed evaluation, the government has found that EU funds are "equivalent", meaning they operate under home rules that are robust enough to protect UK investors.

The government does not aim to require the funds assessed to abide by any additional UK requirements as part of this equivalence determination, Afolami said in a statement.

The equivalence decision, Britain's first under its new post-Brexit Overseas Funds Regime (OFR), has been long awaited by the funds industry as many of the asset managers for EU-listed funds are based in Britain.

We strongly welcome today’s confirmation from HM Treasury that UK investors will continue to benefit from the full range and choice of European funds, including exchange traded funds (ETFs), said Jonathan Lipkin, director of policy at the Investment Association, which represents asset managers in Britain.

It also strengthens the UK’s place as the leading global centre for investment management, he said.

Secondary legislation would be needed to implement the equivalence decision, he added.

It replaces a system of temporary access permission, which was due to expire at the end of 2025, but will now be extended by a year to permit enough time to implement the legislation, Afolami said.