A Life Saving Kit for European Fund Distribution

March 19, 2019

By Attilio Veneziano (World Gondola): Since the financial crisis in 2008, the European rulebook on financial services developed exponentially and virtually all areas of financial services, from the products themselves to the provision of services, nowadays are subject to a specific applicable regulation. If we take the example of the private placement of investment funds, today this is treated very differently at the two opposite sides of the Atlantic. US Fund Managers, accustomed to a more informal approach in their home country, are most often misguided when approaching Europe under national private placement regimes with their funds.  

Moreover, the European rulebook on financial services grew in an inorganic fashion, with a strong predominance of local rules and administrative practices, especially for what concerns the marketing of funds, adding complexity and costs to the exercise of compliance with European Fund Distribution rules.

Below the 5 Top benefits of World Gondola, the life-saving kit for European Fund Distribution rules compliance.

Benefit n.1 – Train your Internal Resources

Retain control. In an environment where it is difficult for US Fund Managers to secure in-house European Fund Distribution rules experts, compliance with these rules is most often outsourced by the legal and compliance departments. However, too often outsourcing takes place in an acritical manner. Internal resources are then left with the role of managing the external outsourced provider without a clear understanding of what is required to obtain and maintain a marketing authorisation for a fund in Europe. Also, when instructing outsourced providers, internal resources most often lack the knowledge of the big picture and the experience to be able to ask specific questions and filter out the most important elements of a European Fund Distribution project from what is merely accessory. This is one of the factors that drives up significantly the cost of compliance with European Fund Distribution rules. 

World Gondola provides training for internal resources with a Foundation, Advanced and Practical course on European Fund Distribution. Users can gain a greater understanding of the bigger picture of the European Fund Distribution rules through video tutorials as well as learn how to complete, submit and maintain marketing authorisations.

Benefit n.2 – Optimise response on European Fund Distribution rules compliance

Deal with queries faster and more efficiently. Most of the times relying on external counsels for the entire European Fund Distribution rules compliance infrastructure does not fit well with the needs of a fast-paced environment, where queries of sales and distribution teams need to be addressed promptly. Time zone difference as well as lack of personalised service from external providers makes it difficult most of the times to be able to obtain a response as fast as it is required.

World Gondola contains so-called Country Factsheets, available for the major European and non- European domiciles. In-depth overview of the do’s and the don’ts of how to market, sell and distribute European and non-European funds in Europe is organised per country and is easily accessible. This is an invaluable tool for teams in charge of European Fund Distribution rules compliance because they can use this actionable intelligence to deal with ad hoc queries from sales and distribution teams. The country factsheets allow users to take informed decisions in an independent fashion, whilst being in control of the amount of work to be outsourced to external providers.

Digital repositories of European Fund Distribution rules were affordable to few so far. We have changed that. 

Benefit n.3 – Reduce costs

Optimise resources. Compliance with European Fund Distribution rules and European Fund Distribution more generally is an expensive undertaking. The current political scenario in Europe, with Brexit looming and the recent measures adopted to ensure temporary permissions to carry out financial services and offer products both in the UK and in the main European domiciles adds complexity to a scenario that is already intricate. Cost of compliance is also expected to rise in light of the various additional work-around arrangements required to ensure that those same financial services and products can be offered throughout Europe for those US Fund Managers that had established a base in the United Kingdom and a set of operations there over time.

Gaining knowledge about the main themes surrounding European Fund Distribution compliance as well as ensuring that any step is taken on the basis of an understanding of the big picture is of paramount importance to optimise and make more efficient from a cost perspective European Fund Distribution projects. Knowing the right provider for a specific solution, as well as being independent in the search from overly relying on external counsels for each and any project is one of the key elements in reducing the costs of European Fund Distribution compliance.   

Benefit n.4 – Expand the geographical remit of distribution

Larger scope for European Fund Distribution. The remit of European Fund Distribution can only benefit in terms of expansions once the overall costs for compliance can be optimised and reduced to an acceptable level. Whilst not all cost variables can be controlled – for instance fees applied by local European national competent authorities in relation to granting marketing authorisations – there is always significant room for US Fund Managers to improve and make more efficient the whole structure of initial and ongoing compliance with European Fund Distribution rules. The more efficient deployment of resources of all types means that the savings can be redeployed to penetrate new markets and expand the existing European offering.

Benefit n.5 – One stop shop

European Fund Distribution involves different moving parts. These are legal, operational and commercial. No single outsourced provider is necessarily able to cover all these angles. Drawing on a deep reservoir of regulatory intelligence and a global network of service providers, World Gondola allows you to have all these angles covered in one solution.