21 Jul 2020

On 1 February 2019, the European Securities and Markets Authority (ESMA) and the European securities regulators agreed on Memoranda of Understanding (MoUs) with the FCA should the UK leave the EU without a withdrawal agreement. The MoUs cover cooperation and exchange of information provisions, and include:

  1. An MoU between ESMA and the FCA on exchange of information related to the supervision of Credit Rating Agencies (CRAs) and Trade Repositories (TRs)
  2. A multilateral MoU with the EU and EEA National Competent Authorities (NCAs) covering supervisory cooperation, enforcement and information exchange, which will allow information sharing in the area of market surveillance, investment services and asset management activities

On 17 July 2020, ESMA and the FCA announced that the MoUs remain valid and will take effect at the end of the transition period expiring on 31 December 2020. They confirmed these MoUs remain relevant and appropriate to ensure continued good cooperation and to avoid disruptions in the sectors of investment management, Credit Rating Agencies and Trade Repositories.

Delegation of portfolio management from EU27 firms to UK entities

The MoUs cover the substance of the regulatory cooperation agreements needed to permit delegation to the UK under UCITS and AIFMD, and outsourcing under MiFID. In fact, the multilateral MoU with the EU and NCAs will allow fund manager outsourcing and delegation to continue to be carried out by UK based entities on behalf of counterparties based in EEA. This marks an important milestone for delegation arrangements post-Brexit and brings more clarity for asset managers seeking to finalise contingency plans. ESMA statement also urged financial market participants to finalise preparations and implement suitable contingency plans in advance of the end of the transition period, further stating that it will continue to review its Brexit-related statements, in particular in relation to operational issues. It will further communicate in due course.

If members have any questions or queries on Brexit in relation to property funds please send them to us at info@aref.org.uk.



Jacqui Bungay

Jacqui Bungay

AREF Secretariat, AREF

Jacqui provides policy guidance and secretariat services to the AREF Board and AREF Management Committee as well as the following AREF Committees: Corporate Governance, ESG & Impact Investing, Investor, Public Affairs, Research and Information and Retails Funds. In addition, Jacqui monitors members’ compliance with AREF’s Code of Practice. 

Jacqui joined AREF in 2014 after working for over 25 years in fund compliance, client relationships and administration at Natwest Trustee & Depositary Services.