Looking for FCA investment Management authorisation? FAQs AIFM tax solutions 1

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1 Looking for FCA investment Management authorisation? AIFM tax solutions 1

2 What type of firm are we, and do we need to apply under AIFMD of MiFID? This will be determined by whether you intend to be the AIDM directly, or whether you would be appointing the portfolio manager by the AIFM. The amount of assets to be managed can also be a factor. How long would it take to become authorised? Firms should typically allow 6 months between submission and approval of the application. Preparation time needs to be factored in to, which would include setting up the entity to be regulated. With AIFMD is this process going to be longer than expected? There has been no statement or warning from the FCA that this is the case, and they have hired more staff to accommodate this. The reality is that the FCA has up to 6 months to process AIFMD applications (up to 12 months for MiFID applications) and we anticipate no appreciable change in processing times at present. Is it as simple as saying that whilst no fees are being paid, no business is being carried on and there is no requirement to be authorised? Until authorisation a firm can not accept fees, give advice or market funds. 2

3 What is expected of someone applying to become an authorised person? This would entail completing a Form A which asks various questions concerning the individual s fitness and propriety and previous employment history; with this form a CV must also be attached. Providing there are no retail clients, there are no prescribed exam requirements. However, depending on the role to be undertaken and your previous experience, the FCA may require you to undergo some form of training. What are the regulatory capital requirements: Is there a specific sum, or is it in relation to a certain number of weeks fixed expenditure? The minimum is 50,000 for a MiFID application and 125,000 for an AIFMD application. The requirement will be equivalent to three months fixed expenditure if that is higher. AIFMs will also need to meet the professional negligence requirement. Firms also need to take start up costs into account. Do we have to have Professional Indemnity Insurance? No, but it is an option for meeting the professional negligence element of the capital requirements under AIFMD. What is the minimum number of people we need to run the firm? There needs to be a back up to having one portfolio manager, and there need to be at least two Directors of the business. 3

4 With teams in key financial services locations, we are able to provide expert advice wherever you or your clients are doing business. What is the FCA application fee, and what are ongoing FCA fees? The initial application fee is 5,000. Ongoing FCA fees relate to Assets under Management, and are set by the FCA each year. What can Kinetic provide in the way of ongoing compliance assistance and are they able to help with setting up the relevant systems to ensure ongoing compliance? This is a core part of our business, and we provide ongoing support to a large majority of our clients. We will look to tailor our services in accordance with your requirements, which will typically include: Undertaking quarterly on-site reviews Production of compliance reports Assistance with correspondence with the FCA Informing you of relevant changes in FCA regulation Customised advice via telephone and FCA Filings Compliance education and training 4

5 Disclaimer: This publication is for informational purposes only, and none of Kinetic Partners or its related entities (collectively Kinetic Partners ) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity within Kinetic Partners shall be responsible for any loss whatsoever sustained by any person who relies on this publication. 5