Getting ready for Brexit

26/10/2020

While the final stages of negotiations between the UK and the EU are still ongoing, we want to answer some of your most frequently asked questions about Brexit as the end of the transition period approaches.

For more information, please get in touch with your regular contact at M&G or find the best way to reach us on the “Contact us” section of this website.

1. How have you been preparing for Brexit?

Following the EU referendum in 2016, M&G acted to minimise disruption to our clients, protect their interests and provide certainty and clarity where we could, regardless of the outcome of the Brexit negotiations.

We have built a new international hub in Luxembourg: a fully licensed and operational business distributing traditional and alternative funds and servicing our investors in Europe, Asia and America.

We completed the migration of assets for most non-UK investors from our UK OEIC range to our Luxembourg SICAV funds in March 2019. Since then, EU and international investors in our funds have been serviced through our Luxembourg hub, while UK investors continue to be serviced in London.

Our Alternative Investment Funds (AIFs) were already largely domiciled in either Luxembourg or Ireland. The operation of these will now managed by our Luxembourg hub.

2. Will you be able to manage funds distributed in the EU from the UK from 2021?

In short, yes.

For EU and other international investors in SICAV mutual funds and AIFs, the UK Financial Conduct Authority, the European Securities and Markets Authority and the National Competent Authorities (NCAs) have confirmed that the Memorandums of Understanding enabling continued delegation of portfolio management activities will be valid from 1 January 2021.

For our existing EU clients who have appointed M&G Investments Management Limited (MAGIM) to manage their segregated or advisory mandates, we are putting in place a number of arrangements to ensure that we can continue to provide these services. This includes expanding the regulatory permissions of our EU-based entities, as well as the passporting of those permissions to the relevant EU-jurisdictions.

3. Will EU investors be able to remain invested in UK funds after Brexit?

It is unlikely that UK-domiciled funds will retain their ‘Undertakings for Collective Investment in Transferable Securities’ (UCITS) status once the UK leaves the EU on 31 December 2020. This, along with the fact that with the UK exiting the EU the funds will no longer be domiciled or registered in the EU, could have implications for EU investors, including tax consequences.

We are in the process of contacting clients domiciled outside the UK who remain invested in the M&G Global Themes Fund and other smaller OEICs to explain their options. If we haven´t contacted you yet, we will shortly, but in the meantime please get in touch with your distributor or regular contact at M&G if you would like to discuss this now.

4. Do I need to do anything?

If you are domiciled outside the UK and invested in one or more of our SICAVs, or if you are a UK-domiciled client investing in one of our OEICs, you don´t need to take any action.

The vast majority of our clients domiciled outside the UK are invested in our Luxembourg-domiciled SICAVs.

We are in the process of contacting clients domiciled outside the UK who remain invested in the M&G Global Themes Fund and other smaller OEICs to explain their options. If we haven´t contacted you yet, we will shortly, but in the meantime please get in touch with your distributor or regular contact at M&G if you would like to discuss this now.

5. What impact could Brexit have on my investments?

As with any other market event, Brexit could result in a period of volatility for markets which may present risks and opportunities. Our fund managers constantly monitor all factors that may impact the long term returns of our clients’ investments, including the political environment, and Brexit is no exception.



For Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals. The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.