Compass:Funds - Midshore Consulting

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Territories: 55

Updated December 2017.

Compass:Funds

Often businesses operating or considering funds are not aware of the marketing reach that offshore funds may achieve. Whilst clearly there is no access to the UCITS passport that EU/EEA funds enjoy, there are still many routes available to reach international clients. Under AIFMD, many EU/EEA countries have Article 36 or Article 42 registration routes to enable marketing to institutional clients. Some EU/EEA countries also allow access to retail investors subject to additional registration requirements.

Compass:Funds is a service to assist offshore fund providers with understanding and accessing international markets. Those operating a fund want it to enjoy access to as many potential investors in as many jurisdictions as possible, and ensure that their sales comply with local requirements.

Compass:Funds is a service designed to assist with all aspects relating to the cross-border selling of funds, and unlike other similar offerings it is the only service to specialise in non-UCITS offshore funds.

Registration
  • Information to enable fund providers to assess which jurisdictions their funds can be registered in and which client types can be accessed
  • Information in relation to private placement restrictions
  • Guidance on what constitutes marketing
  • Restrictions in relation to investments by reverse solicitation
Knowledge
  • Ensuring all requirements are met prior to registration
  • Assistance with the fund registration process
  • Mapping the requirements to the fund documentation (where required)
  • Mapping ongoing obligations
Disclosure & Documentation

Examples include:

  • AIFMD Article 23 requirements for EU/EEA institutional clients
  • PRIIPs KID for EU/EEA retail clients
  • Minimum Disclosure Document (MDD) under South African Board Notice 92
  • Disclosure Annex for Swiss Investors
  • Legends for Offering Documents
Reporting

Examples include:

  • Report & Accounts Disclosures under AIFMD Article 22
  • Regulatory Reporting under AIFMD Article 24
  • USA Regulation D ongoing reporting requirements
  • Regular Statement requirements under South African Board Notice 92
  • Transparency requirements under Report & Accounts

The list of jurisdictions are currently available under the service: Updated December 2017

EU/EEA under Articles 36 & 42
Austria (+ qualified retail + retail)
Belgium (+ retail)
Bulgaria
Cyprus (+ retail)
Czech Republic
Denmark (+ retail)
Estonia
Finland
France
Germany
Ireland (+ retail)
Liechtenstein
Luxembourg
Malta (+ retail)
Netherlands (+ retail)
Norway
Portugal
Slovakia
Sweden
United Kingdom (+ retail)
EU/EEA under non-AIFMD routes
Greece
Hungary
Iceland
Romania
Other European (non-EU/EEA)
Guernsey
Isle of Man
Jersey
Switzerland
Non-EU/EEA
Australia
Brunei Darussalam
China (QDII & QDLP)
Hong Kong
Macau
Philippines
Singapore (retail & restricted schemes)
South Korea
Taiwan
Middle East
Bahrain
United Arab Emirates
Africa
Botswana
Kenya
Mauritius
South Africa
Uganda
USA By State – Regulation D Private Placement
California
Florida
Illinois
New York
Texas
Other Americas
Bahamas
Canada (Ontario Private Placement)
Cayman Islands
Chile (AFP Market)
Curacao
Panama
Sint Maarten

 

Other jurisdictions will be added in the future. Please contact us for any updates.

Disclosure Documentation

Midshore are able to assist with information to be available to investors under various disclosure requirements, whether in the prospectus, financial statements or a separate disclosure document. Examples of this are:

  • The Key Information Document (KID) under the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) regime
  • Initial, periodic and annual disclosures under Articles 22 & 23 of the EU’s Alternative Investment Fund Managers Directive (AIFMD) regime
  • Disclosures under the Transparency Requirements of the Swiss Collective Investment Schemes Act
  • Minimum Disclosure Document under the South African FSB’s Board Notices 92 of 2014 and 74 of 2015

Regulatory Reporting

Midshore can assist with regulatory reporting, such as that required under Article 24 of AIFMD.

Cross-border Migrations and Mergers

Sometimes the ultimate solution to dealing with distribution requirements for a fund is to relocate that fund. Moving a fund between jurisdictions can result in an increase to the jurisdictions available for distribution. Alternatively, a business may realise that a fund it operates does not require the distribution it currently has access to and can be relocated to a lower cost jurisdiction. It may also be that a fund cannot easily meet the dealing frequency or liquidity requirements for a certain type of fund in a jurisdiction. It may make more sense to relocate the fund to a different jurisdiction with fund regulations that allow more flexibility.

There are three main options for relocating a fund and it’s investors.

Migration – in this case the legal structure of the fund remains the same but re-locates to a different jurisdiction. Most investor jurisdictions will recognise this as a continuation of the fund for taxation purposes.

Merger – a fund in one jurisdiction merges into a fund with the same investment parameters in another jurisdiction. Track record of the source fund can be carried over (if merging into a new fund), however some investor jurisdictions will recognise this as a taxable event.

Transition – the source fund remains exactly where it is; a new fund with the same investment parameters is launched in the new jurisdiction and clients are transitioned into the new structure as they issue instructions to “switch” their investment. This will normally create a tax point for investors, but requires less legal formalities to complete. Some jurisdictions either do not allow or place significant restrictions on a migration or merger out of that country, therefore the transition can be the only viable option.

The Managing Director of Midshore Consulting has many years of experience in cross-border movement of investment funds involving such jurisdictions as Guernsey, Jersey ,Ireland, the United Kingdom, the Cayman Islands and Luxembourg. Please contact us to discuss your requirements.

Compass Products

Compass is an ever evolving product aimed at offshore fund providers. Due to its evolutionary nature we regularly send updates about this service.
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Compass:Funds

Compass:Funds was developed to assist fund providers with assistance in accessing additional markets.

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