The collective management business has been growing in Monaco for several years, which is why the Monaco Association for Financial Activities (AMAF) invited around 150 investors and financial leaders in the Principality to a conference on the subject in October.
Supported By The State And The Commission For The Control Of Financial Activities
Opening the conference, Mr Jean Castellini, Monaco government advisor and minister of finance and economy, reiterated that the Monaco state has always played a major role in relation to collective management and the potential for growth is undeniable. The 2007 law number 1,338 (relating to financial activities allowed in the Principality and regulated by the Commission for the Control of Financial Activities or CCAF) and law number 1,339 (relating to open-end collective investment funds and mutual funds) have both facilitated the development of the main principles of fund management activities. Accredited organisations can manage their Monaco- or foreign-based collective investment funds from within the Principality. However, at the moment, although organisations in the Monaco financial marketplace are allowed to offer all types of funds, Monaco-based funds must not leave the boundaries of the Principality. This is one of the subjects under negotiation with the European Union.
The CCAF president, Mr Jacques-Henri David, welcomed the prospect presented by the potential to manage Monégasque and foreign funds which achieve accreditation and presented some figures:
- at the end of June 2016, seven companies in the Principality were managing Monaco funds totalling slightly under 5 billion euros;
- 23 establishments, including four banks, were managing foreign funds worth 14 billion euros. 30% of these are classic European funds, with 70% of other funds such as hedge funds, from Europe, the USA or offshore destinations.
The Commission for the Control of Financial Activities is particularly vigilant in keeping the regulatory and supervisory systems of funds up to date, ensuring they are in line with international regulations; but the CCAF is above all committed to being very responsive, thereby maximising growth opportunities for certain categories of promising funds.
All-Important Training
Mr Hervé Ordioni, president of the AMAF's Committee for the Promotion of the Monaco Financial Marketplace, and Mr Robert Laure, president of ACI (Association of Foreign Exchange Dealers) The Financial Market Association, both stressed the importance investors in the Monaco financial market having access to information in relation to the opportunities offered by collective management within the Principality. The driving force of the AMAF in the organisation of this conference bears witness to this. The ACI does offer training in Monaco-based and foreign funds, as well as in collective real estate investment trusts.
Monaco Funds
These have their own body of regulations, relating to both mutual funds and real estate funds. These regulations are ever-changing as they constantly adjust to remain in line with their foreign equivalents. In a practical sense, these funds can take two different forms: all-investor, open-end funds and segregated funds reserved for predetermined, named individuals or legal entities.
The Monaco financial marketplace benefits from the proximity and resulting ease of cooperation of its main players – regulators, supervisors, banks and management companies – facilitating communication between clients and advisors and hence the creation of targeted solutions.
Segregated Funds: A Multi-Faceted Solution. These are aimed at corporate bodies, legal entities and individuals with minimum assets of around 10 to 15 million euros. Segregated funds can be tailor-made, with controlled risk to suit the needs of a demanding clientèle who have specific requirements, as well as legal and heritage-related constraints. Distribution funds, for example, require a regular revenue; otherwise a capitalisation fund is chosen instead. Segregated funds also allow for a simplified accountancy and specific tax reporting regimes.
Once the bill of specifications has been drawn up, the process of creating a fund is very quick: the purpose-built regulatory framework means the accreditation waiting time is around eight days (or three months for an open-end fund).
Confidentiality, transparency and heritage management are all important aspects for Monaco funds: it is possible to obtain an exemption from publication in the Monaco Official Journal; in addition, collective investment funds can substitute to shareholders for the disclosure of certain information.
The existence of these Monaco investment funds proves that it is possible to find professionals within Monaco with the same level of expertise as their foreign counterparts and this is crucial for the market, particularly when considering new and future residents in the Principality.
Setting A Solid Example
Four management companies attached to banks presented examples of Monaco funds: Martin Maurel Sella Gestion; CFM Indosuez Wealth Management; the Compagnie Monégasque de Gestion (CMG); and Edmond de Rothschild Gestion Monaco. Lastly, several examples of foreign investment funds were highlighted by the Compagnie Monégasque de Gestion, Monaco Asset Management, Field Street Capital Management and Churchill Capital.
