Vol 14 (2017) - Issue 3

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Brexit and Gibraltar: A New Opportunity? An Analysis of Gibraltar’s Funds and Financial Services Sector Post March 2019

Following the UK referendum decision to leave the European Union, on 29 March 2017 the UK government served notice under Article 50 of the Treaty of Lisbon of its intention to secede as a member state of the EU. Gibraltar is a member of the EU by reason of the UK’s membership, and will leave the EU at the same time as the UK. Under Article 50, there will now be an interim period of two years to negotiate the terms of exit, which will occur on 29 March 2019 unless an alternative date is mutually agreed between the UK and all EU member states.
Nearly one year has passed since the UK referendum, and no negative impact has as yet been felt by the Gibraltar funds industry. In part this may be because Gibraltar remains within the EU and will do so for another two years, perhaps longer. In the meantime, Gibraltarian businesses continue as usual, enjoying the benefits of EU membership where relevant to them, such as rights contained in MIFID and AIFMD.
The mood has changed somewhat from one of initial shock, to one of cautious optimism. This is based on a realisation that the Gibraltar funds industry has little reliance upon the passporting rights that come with EU membership. The reality is that the majority of Gibraltar funds and investment managers do not avail themselves of the EU passport, either because they fall below the threshold under which they are available or because they fall within certain other exemptions such as being family offices or being funds not generally available to the public. For funds and fund managers that did not rely on the EU passport, Brexit will make little difference to them at all.