The Dual Regime in Gibraltar has given the jurisdiction a number of post-Brexit freedoms many in the UK funds industry will look at with envy. In tandem, the formal realisation of the Gibraltar Authorised Regime (GAR) will provide the domicile with a unique opportunity, compared to other European fund centres, as it builds out market access with the UK.
By Anthony Freize, managing director, Red Ribbon Fund Management
The Dual Regime in Gibraltar has given the jurisdiction a number of post-Brexit freedoms many in the UK funds industry will look at with envy. In tandem, the formal realisation of the Gibraltar Authorised Regime (GAR) will provide the domicile with a unique opportunity, compared to other European fund centres, as it builds out market access with the UK.
The Dual Regime allows funds to opt out of the restrictive requirements of the AIFMD and places Gibraltar on more of a level playing field vis-à-vis global jurisdictions. “We would expect the Dual Regime to create new demand for Gibraltar domiciled-funds taking advantage of new freedoms while retaining full FSC authorisations,” outlines Anthony Frieze, Managing Director at Red Ribbon Fund Management.
The introduction of the GAR will also provide Gibraltar with further scope for growth. This development sees the UK and Gibraltar Governments agreeing to reciprocal market access for UK and Gibraltar financial services firms. These arrangements are not available to any other Overseas Territory, Crown Dependency or Third Country.
“Over the coming year, we would expect the formal realisation of what is, in all but name, a single Gibraltar – UK market through the operation of the GAR will give Gibraltar a unique opportunity compared to other European fund centres,” says Anthony.
Brexit did bring opportunity but it also gave rise to some challenges as, in the absence of agreement on financial services, limits the access of locally registered funds to sell into the European market. Anthony continues: “It is to be hoped that the first opportunity to renew and revise the TCA in 2025 will see the UK-EU being willing to revisit the mutual access of services to each other’s markets which could address this.”
Gibraltar’s links to the UK run deep, though Anthony highlights how as a company with a British-Indian ownership and organisation, Red Ribbon Fund Management remains strongly engaged in opportunities created by Brexit in terms of both deregulation and shifting trade and capital flows that it will lead to.
In line with this, UCITS represent a key area of future growth in Gibraltar. “There are many UCITS funds based in Europe that sell into the UK. Following Brexit and given Gibraltar’s privileged – and unique access to UK financial markets under the GAR then the opportunity for Gibraltar to sell UCITS into the UK is an interesting proposition,” says Anthony.
But, as the domicile eyes further development, the industry continues to struggle with a scarcity of qualified staff in the Gibraltar market as well as the cost of relocating staff to Gibraltar given elevated accommodation costs. Anthony identifies that this has already been seen in specific roles such as that of MLROs, but also extends into other areas of asset management expertise and indeed to the resource challenges faced by the FSC: “These concerns have been regularly raised by the industry with HMGoG. Solutions to these issues will be neither fast not easy but need to be the subject of ongoing governmental focus.”
Anthony Freize, managing director, Red Ribbon Fund Management – Anthony is the Managing Director and oversees the day-to-day operations of Red Ribbon Fund Management. He spent most of his banking career over 20 years at JP Morgan, BNY Mellon, Deutsche Bank and Allianz/Dresdner Kleinwort, originally as a stockbroker and then as a senior product specialist and relationship manager in agency repo and collateral management. His clients included some of the world’s largest sovereign wealth funds as well as a wide range of leading central banks and governmental and international investors across Europe, Asia Pacific and the Middle East.
