Despite best intentions, cross-border distribution of investment funds is far from frictionless.
Even though cross-border distribution has been facilitated by regulation for many years, Europe still has not completely cracked the issue. The European Commission has made it a priority for 2018 to remove barriers to creating a more competitive pan-EU investment landscape, including for personal pensions. Elsewhere, a number of countries are establishing new domestic fund structures to compete with foreign options.
Meanwhile, use of the Asian fund passports remains low. And “Brexit” will impact cross border flows between the UK and the rest of the EU, in both directions. Also, the EU regulatory approach to the provision of portfolio management from one jurisdiction to another - or “delegation” - looks set to become more demanding.
On the other hand, bilateral arrangements have come to the fore and countries such as China and India continue to open up their capital markets to foreign investors.