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News Flash – European regulation restrictions impact US citizens in Europe looking to invest in US mutual funds

Fidelity recently became the latest, in a growing list of asset managers, to inform their US clients living overseas that they can no longer purchase or trade US mutual funds within their brokerage accounts as of 01 August.

Typically, US brokerage houses and asset managers receive commissions and revenues from sales of mutual funds to individuals and under the Alternative Investment Fund Managers Directive (AIFMD) framework, mutual funds cannot be marketed to European residents unless they are regulated under AIFMD.  As a result, we are seeing US asset managers one-by-one, choosing to opt out of this heavy burden, thus restricting US persons living overseas from purchasing US mutual funds.

For US persons living overseas, the news is troubling as investment options continue to narrow. MASECO anticipated this global trend a few years ago and moved to ensure we could comply with the AIFMD framework. MASECO does not “market” i.e. act on behalf of, or at the initiative of the AIFM in respect of  any US mutual fund that it advises on and as such is not caught by the restrictions placed on firms by UK regulations.   

With FATCA reducing the number of financial institutions in Europe that US citizens can work with and the restriction of US investment houses having the ability to sell mutual funds to European residents, the net is tightening as far as investment options are concerned, for Americans based in Europe.

If you, or anyone you know, finds themselves with limited investment options as a result of these continuing changes, please do feel free to contact us to find out more about how we may be able to help.

 

 


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