Memorandums of Understanding (MoUs) are a pre-condition under the Alternative Investment Fund Managers Directive (AIFMD) to allow certain cross-border activities to take place.
Supervisory cooperation arrangements are required for:
- a full scope UK AIFM, or a full scope Gibraltar AIFM, to be able to market an alternative investment fund (AIF) under Regulation 57
- an above-threshold third country AIFM to be able to market under Regulation 59
However, supervisory cooperation arrangements are not required for the marketing of an AIF by a small third country AIFM under Regulation 58.
Our rules also require that a supervisory cooperation arrangement is in place with the relevant jurisdiction whether or not the competent authority supervises the particular entity in question.
High-risk and non-cooperative jurisdictions list
The AIFMD also requires that the third country is not listed as a ‘Non-Cooperative Country and Territory’ by the Financial Action Task Force (FATF). However, this list is no longer maintained by FATF, which instead maintains a list of ‘High-risk and non-cooperative jurisdictions’.
Firms should therefore refer to the latest High-risk and non-cooperative jurisdictions list published by FATF, which consists of two parts:
- jurisdictions that have strategic anti-money laundering (AML)/ combating the financing of terrorism (CFT) deficiencies and to which counter-measures apply; and
- jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies
Our NPPR MoUs
MoUs are designed to help us supervise compliance with the AIFMD requirements when a non-UK entity is involved in the management or marketing of an AIF within the UK, or where the AIF is established in a overseas jurisdiction.
UK AIFMs must not privately place non-UK AIFs in the UK unless the applicable MoU is in place.
It is the responsibility of firms to check whether there is an MoU in place before applying. Not doing so may result in the failure of an application or supervision/enforcement action for breaching applicable rules.
In February 2019, we agreed a multilateral MoU with EU and EEA National Competent Authorities covering supervisory cooperation, enforcement and information exchange. This MoU came into effect at the end of the transition period.
We have signed MoUs with the organisations listed below.
|Abu Dhabi Financial Services Regulatory Authority|
|Albanian Financial Supervisory Authority|
|Alberta Securities Commission|
|Australian Securities and Investments Commission|
|Autorité des marchés financiers, Québec|
|Bermuda Monetary Authority|
|Board of Governors of the Federal Reserve System, United States of America|
|British Columbia Securities Commission|
|British Virgin Islands Financial Services Commission|
|Capital Market Development Authority of Maldives|
|Capital Markets Board of Turkey|
|Cayman Islands Monetary Authority|
|Comissão de Valores Mobiliários do Brasil|
|Commodity Futures Trading Commission, United States of America|
|Conseil Déontologique des Valeurs Mobilières of Morocco|
|Dubai Financial Services Authority|
|Egyptian Financial Supervisory Authority|
|Financial Markets Authority of New Zealand|
|Financial Services Agency of Japan|
|Financial Services Board of South Africa|
|Financial Services Commission of Mauritius|
|Financial Supervision Commission of the Isle of Man|
|Guernsey Financial Services Commission|
|Hong Kong Securities and Futures Commission|
|Israel Securities Authority|
|Jersey Financial Services Commission|
|Labuan Financial Services Authority|
|Ministry of Agriculture, Forestry and Fisheries of Japan|
|Ministry of Economy, Trade and Industry of Japan|
|Monetary Authority of Hong Kong|
|Monetary Authority of Singapore|
|National Banking and Securities Commission of the United Mexican States|
|Office of the Comptroller of the Currency, United States of America|
|Office of the Superintendent of Financial Institutions, Canada|
|Ontario Securities Commission|
|Qatar Financial Centre Regulatory Authority|
|Republic of Srpska Securities Commission|
|Securities and Commodities Authority of the United Arab Emirates|
|Securities and Exchange Board of India|
|Securities and Exchange Commission, United States of America|
|Securities and Exchange Commission of Pakistan|
|Securities and Exchange Commission of the Republic of Macedonia, Former Yugoslav Republic of Macedonia|
|Securities Commission of Malaysia|
|Securities Commission of the Bahamas|
|Securities Commission of the Republic of Montenegro|
|Swiss Financial Market Supervisory Authority (FINMA)|
|State Securities Commission of Vietnam|
|The Financial Services Commission and The Financial Supervisory Service of Korea|