Certain fund structures such as the UCITS fund must be domiciled in the EU and either be self-managed or managed by an EU management company. Falling out of the UCITS Directive could result in a categorization as AIF under the AIFM Directive, which in turn would have considerable effects to marketing restrictions.

Alternative Investment Funds (AIF) can be marketed by EU AIFM to professional investors in other Member States based on passporting. Following Brexit, the UK will no longer be an EU AIFM. AIFM from outside the EU cannot make use of this privilege and thus must act via national private placement regimes (NPPR) where these exist or rely on reverse solicitation. The NPPR allows AIFM to market AIF that otherwise cannot be marketed under the AIFMD domestic marketing or passporting regimes. Although it is intended to extend the AIFMD passport regime to equivalent third country managed fund in specific situations, it is unclear when and how such regulation will come into force. In consequence, marketing UK funds or UK managed funds in the EU will be subject to much more complex regulation, at least for an unpredictable timeframe until AIFMD passport extension.

So, relocation of UCITS or UCITS management companies as well as AIFM into other Member States might become necessary.