On 19 November 2018, HM Treasury published a draft of The Long-term Investment Funds (Amendment) (EU Exit) Regulations 2018.
Currently, UK fund managers must apply to the FCA for authorisation of a European long-term investment fund (ELTIF) in order to market them using the ELTIF label. In a hard Brexit scenario UK fund managers will be unable to market qualifying funds under the EU regime. The UK regime of the ELTIF Regulations will only apply to UK Alternative Investment Fund Managers and funds domiciled in the UK. As a result of the changes made by the draft Regulations, UK fund managers will be able to register or be authorised with the FCA in order to market qualifying long-term investment funds within the UK. Existing UK managers of ELTIFs that are already registered or authorised with the FCA will be automatically transferred to the new UK regime. The draft Regulations also maintain the existing investment rules for ELTIFs domiciled in the UK to ensure continuity for investors.
HM Treasury has also published an updated explanatory information webpage which provides information on the draft Regulations and the Venture Capital Funds (Amendment) (EU Exit) Regulations 2018 and the Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2018, as part of a package of EU Exit statutory instruments for investment funds and their managers. Among other things the webpage discusses temporary marketing permissions as provided for in the Alternative Investment Fund Management (Amendment) (EU Exit) Regulations 2018.