The United Kingdom’s Financial Conduct Authority recently clarified that, for non-EU master-feeder structures that are actively marketed by non-EU fund managers under the UK’s private placement regime (as opposed to just relying on “reverse enquiry”), Form PF-like reports known as Annex IV Reports are NOT required in respect of the master fund. Such reports are still required for any feeder fund marketed in the UK, however, this report is much easier to complete than the master fund report, since the feeder’s sole asset is the master fund and there is no look-through to the portfolio. This dramatically reduces the complexity, cost and compliance burden required of non-EU fund managers in relation to marketing under the UK’s private placement regime.

A non-EU fund manager doesn’t need to be FCA-registered in order to market under the UK’s private placement regime. It needs to comply with the remaining disclosure and reporting obligations, and file a one page document with the FCA notifying the FCA of its intention to market the feeder fund in the UK and self-certifying the fund manager’s compliance with AIFMD.

Given that the UK is by far the largest investor market within the EU for non-EU funds, we believe that this significant easing of the regulatory burden, as well as the fact that the UK private placement regime avoids “reverse enquiry risk” (including associated investor put rights), will cause many non-EU fund managers to reconsider their position with respect to active marketing in the UK.

If you have any questions, please contact your primary attorney at Seward & Kissel LLP. In addition, our investment management alliance partner, Simmons & Simmons, has significant expertise with respect to AIFMD throughout the EU and is available to assist in this regard.