Hong Kong Seminar. 15 January irishfunds.ie

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2 Hong Kong Seminar 15 January

3 Industry Update & Key Developments Hong Kong, 15 January 2018 Pat Lardner Chief Executive 3

4 Who / What are we industry association for all aspects of regulated cross border funds in Ireland o representative function o promotional function 125 member firms, located both in and outside Ireland key link to the authorities & policy makers in Ireland and beyond the industry s representative in Europe and globally a platform for collaboration, information sharing and driving outcomes & improvement 4

5 The Irish Funds Industry supports managers from all over the world Fund Managers 903 full range of services for Irish domiciled funds as well as providing expert services for funds domiciled outside of Ireland solutions are provided to managers across the full spectrum of investment strategies Irish Domiciled Funds 2.4 trillion UCITS 1.8 trillion Irish Administered Funds Non Domiciled Funds 2 trillion AIFs 0.6 trillion Source: Central Bank of Ireland, October 2017, figures rounded to nearest 0.1bn 5

6 What does the industry in Ireland provide? EU Single Market Access: product & service passports Investor Access: European Market and beyond Best Country in Western Europe to invest in Service Excellence / Developed Ecosystem Low Costs Low Tax Environment 1 st FLEXIBILITY AND ADAPTABILITY OF PEOPLE Regulatory Environment Commitment from Government Infrastructure : language/legal/telecommunications 1 st IN EUROPE FOR COMPLETION OF 3 RD LEVEL EDUCATION 6

7 Why Ireland? Distribution and investor support Global Distribution of Irish UCITS broad mix of institutional and retail clients served 30 languages supported 23 currencies supported Source: Lipper, PwC & Irish Funds,

8 EUR Billion Total Assets Under Administration Irish Domiciled and Non-Domiciled Fund Assets - billion 4,500 4,000 Total Non Domiciled Total Domiciled 3,806 4,095 4,273 3,500 3,375 3,000 2,500 2,000 1,500 1, ,722 1,976 2,011 2,199 1,907 1,883 1,886 1,711 1,378 1,394 1,398 1, , , , , ,227 1, , Sep-17 Source: Central Bank of Ireland 8

9 Irish Domiciled Asset Breakdown UCITS represent 75% of Irish Domiciled Assets 86 UCITS Man Cos 161 AIFMs Registered or Authorised 630 AIFMs operating in Ireland on cross border basis 390 ICAVs established (since 18 March 2015) Source: Central Bank of Ireland 9

10 % Cumulative Growth Growth of largest European fund domiciles 120% 100% Europe Luxembourg Ireland France Germany UK 80% 60% 40% 20% 0% Q3 Europe 0% 13% 23% 42% 58% 78% 92% Luxembourg 0% 14% 25% 48% 67% 77% 93% Ireland 0% 16% 27% 57% 80% 98% 118% France 0% 9% 10% 14% 21% 29% 39% Germany 0% 13% 24% 40% 53% 66% 78% UK 0% 17% 35% 59% 79% 77% 92% Source: EFAMA Statistics 10

11 billion Irish domiciled funds net sales Net Sales: Ireland v Total European Union YTD Sept 2017 Ireland Net Sales EU Net Sales Net sales for YTD Sept 2017 have surpassed the total for 2016 which itself was a record year Source: Central Bank of Ireland 11

12 Brexit interdependent themes Current context OVER 2,000 IRISH FUNDS SOLD TO UK INVESTORS 1 Target outcome Continuity in UK investor access to EU/Irish funds Distribution Management Models ( Delegation ) bn 2 IN IRISH FUND ASSETS MANAGED BY 170+ UK FIRMS IN IRELAND 2 SOURCE: 1-Lipper IM Dec Monterrey Ireland Fund Report 2016 Growth Increase Ireland s growth trajectory as an international asset management centre Continuity in UK firm management of Irish funds

13 Structuring options: Management models Global Asset Managers Regional Asset Managers MiFID Firm Super ManCo w/ Add-on Authorisations ( v2 ) Super ManCo w/ Delegates ( v1) SMIC Simple option for single umbrella fund 13 DEFINITIONS: MiFID Firm : Investment firms authorised under Markets in Financial Instruments Directive (2007, to be replaced by MiFID 2 / MiFIR in January 2018) Super ManCo : authorised to provide services to UCITS and AIFs w/ the option of add-on authorisations for segregated mandates SMIC : Self-Managed Investment Company Management Models ( Delegation )

14 Other developments. Updating of Ireland s Investment Limited Partnership Legislation Legislative amendments approved by Irish Government. Entering legislative process Will provide additional scope for private equity and real asset funds. European Commission ESAs Proposals While there are aspects to the European Supervisory Authorities (ESAs) proposals we welcome, there are a number of areas which are of significant concern. We have shared our views in Ireland and in Europe. Strong advocates of delegation to globally based experts. Loan Origination We continue to engage with the CBI and Public sector with a view to enhancing the current Loan Origination offering. Tax Transparency OECD has awarded Ireland the highest international rating on tax transparency and exchange of information. 14 EU Cross Border Distribution Consultation on removing barriers to Cross Border Distribution submitted 2016 and follow-up questionnaire completed We have subsequently met with the European Commission. Expected Q1 2018

15 Other developments. Pan European Personal Pension Plan (PEPP) Industry white paper published on PEPP. We have subsequently met with the European Commission. Financial Action Task Force (FATF) Mutual Evaluation Report (MER) of Ireland FATF s assessment of Irelands anti-money laundering and counter terrorist financing concluded that Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing. In addition the Report highlights National coordination mechanisms and the Private Sector Consultative Forum (PSCF) were fruitful in broadening the understanding of its ML and TF risks across all relevant agencies and with the private sector. CBI engagement re Exchange Traded Funds (ETF) Responded to Central Bank of Ireland (CBI) ETF discussion paper and engaged with the CBI throughout the process. Consultation paper on CIS Liquidity Risk Management Response provided to the International Organization of Securities Commission (IOSCO) Consultation paper. 15

16 Conclusion EU Member & Strategically Positioned + International Hub for Globally Distributed Investment Funds + Unrivalled Experience and Expertise in the Widest Range of Fund Structures 16

17 Disclaimer: The material contained in this document is for marketing, general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. Further, this document is not intended to be, and should not be taken as, a definitive statement of either industry views or operational practice. The contents of this document may not be comprehensive or up-to-date, and neither Irish Funds, nor any of its member firms, shall be responsible for updating any information contained within this document. 17

18 Keynote Presentation: Economic Market Update Connie Boland Economic Research Analysis Ltd 18

19 Panel One: ETF Update Moderator: Julie Kerr, EY Panellists: David Quah, Value Partners Shay Lydon, Matheson Simon Lee, CSOP Asset Management Paul Heffernan, HSBC Nik Bienkowski, HANetf 19

20 Fireside Chat: The Market Opportunity and Regulatory Environment for Online Advisory Platforms in Asia Moderator: James Lloyd, EY Panellists: Benedicte Nolens, Securities and Futures Commission Byron Wong, Yunfeng Financial Group 20

21 Panel Two: Perspectives on the Irish and Global Regulatory Agenda Moderator: Michelle Lloyd, Maples and Calder Panellists: Mark Dillon, Deacons Paul Moloney, Eversheds Winnie Pun, BlackRock Marie Gervacio, EY 21

22 Keynote Address Michael D Arcy Minister of State at the Department of Finance 22

23 Closing Comments Conor O Mara Jefferies 23

24 Drinks Reception Kindly sponsored by EY 24

25 Hong Kong Seminar 15 January