The UK will become a third country in relation to EU-rules if it withdraws from the EU without a deal (“hard Brexit” or ” no-deal Brexit “). Fund management companies based in third countries are not eligible for the notification regime (passporting) for marketing, as set out in the UCITS and AIFMD directives. Marketing of funds associated with third countries in Norway requires authorisation from Finanstilsynet.
Repeal of right to market funds in Norway
Foreign funds (UCITS and AIFs) may be marketed in Norway depending on the funds category and the location of both the fund and the fund manager. The following legal grounds to market funds in Norway will no longer apply in case of a no-deal Brexit.
- The right to market UCITS established in the UK under the notification regime according to the UCITS-directive. UCITS established in the UK will be reclassified as third country AIFs.
- The right to market UCITS established in another EEA-country where the fund manager is established in the UK, and the fund is notified for marketing in Norway.
- The right to market AIFs established in the UK to professional investors according to the notification regime in the AIFMD. This applies regardless of whether the AIFM is established in the UK or in another EEA-country.
- The right to market AIFs established in another EEA-country based on the notification regime as per the AIFMD where the AIFM is established in the UK.
- The right to market AIFs established in a third country where the AIFM is established in the UK with authorisation according to the Norwegian AIFM Act section 6-4 (AIFMD article 36).
If a no deal Brexit occurs, Finanstilsynet will deregister funds in the above listed categories, in which case all marketing activities must cease.
Marketing of alternative investment funds in Norway where the fund or the manager is established in a third country
In accordance with Norwegian law (The Norwegian AIFM Act and the Norwegian Securities Funds Act), funds established in third countries may be marketed in Norway with authorisation from Finanstilsynet. Finanstilsynet may also permit the marketing of funds domiciled in the EEA where the fund manager is established in a third country.
Marketing of funds to non-professional investors:
Marketing of securities funds to non-professional investors may be permitted under the Norwegian Securities Funds Act section 9-4. This includes current UK UCITS funds reclassified as AIFs in case of a no deal Brexit, and where authorisation from Finanstilsynet will be required.
Marketing of funds to professional investors:
- Alternative investment fund managers established in the EEA may apply for a marketing permission pursuant to the Norwegian AIF Act section 6-4 (AIFMD article 36), where the fund subject to marketing is established in a third country.
- Alternative investment fund managers established in a third country may apply for a marketing permission pursuant to the Norwegian AIF Act section 6-5 (AIFMD article 42). This applies regardless of where the fund is established.
Special cases
Alternative investment fund managers that hold a marketing authorisation granted under the Norwegian AIF Act section 6-4 (AIFMD article 36) may apply for an authorisation according to the Norwegian AIF Act section 6-5 (AIFMD article 42) following a simplified procedure. Reclassification of the AIFMs marketing authorisation will require reporting to Finanstilsynet pursuant to AIFMD Annex IV.
UCITS established in the UK that currently market units in Norway based on the notification-regime may apply for a license to market units to non-professional investors pursuant to the Norwegian Securities Funds Act section 9-4 following a simplified procedure. In addition, if the units are to be marketed to professional investors, marketing permission following the Norwegian AIF Act section 6-5 (AIFMD article 42) must be applied for.
Regarding applications
Finanstilsynet will not process any applications as described above before it is certain that the UK becomes a third country (no deal Brexit).
