Business Irish

Sunday 22 January 2017

US funds can 'passport' into the EU

Huw Jones

Published 20/07/2016 | 02:30

A new EU law requires ESMA to say for the first time if rules for financial firms in non-EU countries meet the standard inside the 28-country bloc
A new EU law requires ESMA to say for the first time if rules for financial firms in non-EU countries meet the standard inside the 28-country bloc

Hedge funds from the United States, Singapore and Hong Kong should be allowed to market themselves in the European Union, the bloc's financial watchdog said yesterday.

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Equivalence will allow the much bigger US mutual funds sector as well as hedge funds to operate across the EU, ESMA had said.

The long-delayed recommendation from the European Securities and Markets Authority (ESMA) to the EU's executive European Commission for endorsement is a taste of what Britain's financial services sector might face after it leaves the bloc.

A new EU law requires ESMA to say for the first time if rules for financial firms in non-EU countries meet the standard inside the 28-country bloc. A positive view means that asset managers based outside the EU get a "passport" to continue offering services to investors across Europe, replacing a system of country-by-country authorisation. ESMA gave the green light to hedge funds from Canada, Guernsey, Japan, Cayman Islands, Jersey, Australia, and Switzerland, with provisos for some of them.

Irish Independent

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