BREXIT is having a negative impact on the local funds industry, a leading lawyer has said.
Gavin Farrell, partner at new law firm Ferbrache and Farrell, and one of the island’s top funds lawyers, said that the island was finding it harder to attract new funds business over the past few months.
European regulations were making fund managers and promoters think harder about where they want funds to be domiciled and promoted, he said, and he was sure that the Brexit referendum vote had impacted the island’s opportunity to secure a passport under the EU’s Alternative Investment Fund Managers Directive.
Within a month of the UK referendum, Guernsey had received a positive assessment from the European funds regulator Esma, and it was expected that the passport would be issued shortly thereafter.
It still has not been, and although that has allowed ‘business as usual’, Mr Farrell said it was far from ideal.
‘Brexit is highly political in Europe,’ said Mr Farrell.
‘I think had Brexit happened two months later most probably we would have got the passport. I don’t think it would have been pushed back into the long grass to the same extent it has, and now the European Commission has bigger fish to fry. I think we would have had a far easier ride without Brexit.’
Mr Farrell said that the local industry was having to work much harder for business as promoters started to look at alternative domiciles for funds, for a variety of reasons. The local industry has long held concerns that the European regulatory environment for funds was becoming more challenging and competitive.