SG Hambros beats the pack to obtain vital AIFMD depositor's licence an article in the Gibraltar Chronicle by Peter Schirmer – July 2014
As new EU Directives reach deadlines and are implemented (the Alternative Investment Funds Managers Directive (AIFMD) is set to take effect within a fortnight) and changes in the laws relating to funds management in Switzerland and in the Chanel Islands are implemented, some 400 funds will be looking for new homes. It is a potential harvest ready for Gibraltar to pluck. So it is against this background that SG Hambros Bank (Gibraltar)'s strategic move to acquire the AIFMD Depository licence, which the FSC eventually confirmed in writing this week, makes sound banking sense. Theirs is the first such licence granted in Gibraltar and puts them several steps ahead of their competitors on the Rock and is expected to add a service of which the whole Societe Generale group can - and will - take advantage. SG is already the second largest custodian in Europe and the Gibraltar licence will fit well in this aspect of its operations. In terms of the Directive, funds managers must ensure that any alternate investment funds in their care are deposited with a suitably licensed bank. Licence now in hand, SG Hambros Gibraltar stands ready with open arms to welcome them, Aspects of the new AIFMD are tortuous and, as Jon Tricker audit partner with Deloitte Gibraltar pointed out in an assessment of the Directive almost a year ago, it 'poses several challenges to the hedge fund/investment management industry in Gibraltar.' But, he added that 'if those challenges can be overcome, the foundations of the strong investment and funds managing industry already in place in the jurisdiction, together with external factors are likely to make Gibraltar even more attractive'. It would not only be well placed to draw more business - for both AIFMD compliant managers and funds. But in terms of the AIFMD managers no longer just have a custodian role' liability levels increase and cash flows must be watched - not only by managers but by their depository banks, with traditional bankable assets their main targets. Because we are part of the EU locally licenced investment managers have the ability to passport within Europe - creating a huge market potential. And clearly, SG Hambros - known for setting new thresholds - would like a piece of the action. Their newly-obtained licence could help the private bank get a significant slice. For although Dublin and Luxembourg are significantly bigger players on the funds management stage - and banks in both of these jurisdictions already have the licences required by the new directive - it is accepted across the industry that funds managers in these two centres 'won't get out of bed for anything less than ÂŁ100 million'. In effect, they already have so many large funds, that the hundreds of smaller funds - several of which are already domiciled or managed here - have to ,look elsewhere... and Gibraltar as a jurisdiction of choice is good business for them and our own funds industry. To say nothing of tax-efficient, tax -transparent and fully-compliant banks which hold the depository licence which the new Directive demands. And, as the clearly delighted CEO of the bank Emma Perez told me yesterday: ' This is a great opportunity for the bank in this field, both locally and internationally and dovetails neatly with the Government's aspirations for the funds industry.'