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Structuring Solutions: The European, Wider Marketplace - Breakfast Briefing Report

Tom Burroughes, Group Editor , London, 27 April 2018

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Wealth practitioners from Malta, Switzerland the UK gathered at two breakfast briefings organised by this news service to examine the structures - and strategies - needed to protect wealth in uncertain times.

The wealth management toolkit must be constantly updated as new client demands kick in, Industry practitioners from Malta, Switzerland, the UK and other jurisdictions argue and they say that while international financial centres compete, they can profit from collaborating too.

At conferences in late October (London) and early December 2017 (Zurich), figures examined the use of trusts and other structures at a time when developments such as Brexit and enactment of the Alternative Investment Fund Managers Directive were changing the legal and regulatory environment. 

The London and Zurich events, organised by the publisher of this news service, were sponsored by Finance Malta, the public-private sector agency promoting financial services in the Mediterranean island. The London panel discussion explored the theme of Black Swans turn Grey: How Finance Structures Can Help Businesses Triumph During Troubled Times; the Zurich event took its cue from the title Structuring Solutions for the European and UK Marketplace

In London, much discussion focused on how, when the UK is embarking on an exit from the European Union, jurisdictions such as Malta – an EU state with historical connections to the UK – can tap into opportunities. Brexit has raised awareness around how to “passport” funds and other financial structures around Europe and beyond, delegates heard. 

In the UK conference, speakers were Kenneth Farrugia, who is chairman of FinanceMalta; Joseph M Camilleri, chief officer at BOV Fund Services Limited; Chris Casapinta, country executive, head of the Italian desk at Alter Domus Malta, Andrew Caruana Scicluna, associate, Camilleri Preziosi (Malta); David Inglesfield (formerly of ZEDRA); and Paulianne Nwoko, managing director, of Apex Fund Services (Malta). 

One of the main requirements of any set of structures from investors is that they are transparent and can be brought rapidly to the marketplace, the briefing heard. In the case of certain alternative investment funds (AIFs), they can be rolled out in as few as 10 days.

There was also discussion around the use of Professional Investor Funds – which are used in Malta and certain other jurisdictions – and their flexibility; PIFs don’t fall under AIFMD. PIFs provider a “lighter and more flexible regulatory framework”, the event heard. Investors are increasingly demanding that funds are listed on exchanges, bringing with it the peace of mind that structures are regulated. One issue is that there is not, at present, a single approach across Europe for private placement. 

Another segment of the event examined the complex private client demands in play, and how jurisdictions can meet them. The growth of family wealth has prompted the wider use of private funds, delegates were told. One takeaway from the event was how people increasingly want to have structures that have a robust reputation.

There is increasing focus on due diligence on jurisdictions themselves when evaluating whether to use a structure or not, the event heard.

With IFCs and the kind of structures they host, there are opportunities to reposition them as ways to protect and transfer wealth in robust ways, not to minimise tax, the event heard.

Switzerland
The Swiss event featured the following panelists: Ivan Grech, head of business development, FinanceMalta; Richard Ambery, General Counsel, Managing Partners Group; Chris Casapinta, country executive, head of the Italian desk, Alter Domus Malta; James Farrugia, partner, GANADO Advocates’ Investment Services; Jonathan Kirby, managing director, Geneva at Accuro; Sandra Louw, managing director, Trident Trust in Zurich; Francis J. Vassallo, President/managing director, Francis J. Vassallo & Associates Groups and Alexandre Von Heeren, managing partner and owner, Basle/Zurich/Zug and Mandaris; Andrew Caruana Scicluna, associate, Camilleri Preziosi (Malta), also appeared. 

The panel discussed similar topics as came up in London, but with the twist that Switzerland, a non-EU state without its home-grown trusts law (something that might change), could look to jurisdictions such as Malta to help craft solutions for Swiss clients. 

It was pointed out, for example, that as there are regulatory and other pressures for individuals and firms to move away from some “offshore” jurisdictions, more onshore places, such as Malta, or Ireland and Luxembourg, stood to benefit. And centres such as Malta, with a blend of English Common Law trust traditions and continental European Civil Law heritage, can exploit opportunities that arise. 

One of the speakers, von Heeren, told delegates he has worked with Malta since 2010, noting that its membership of the EU put it into an attractive position. “Switzerland is not so much a financial centre as a banking centre…under Swiss laws you can’t structure a lot,” he said, arguing that Swiss clients are looking to use foreign wealth structures.

Other speakers noted certain common trends: a preference for the simplest structures available, given the need for them to be legally and reputationally robust.

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