Well, who would have thought a week ago that we would be wondering which would happen first, exit from the Brexit transition period or the result of the US election? Lawyers from both parties will be arguing over the mail-in ballots of the swing voters of Little Ubend, Wisconsin for months if not years.

For the benefit of our overseas readers and anyone under the age of 45, we feel we ought to explain the cultural reference in our previous newsletter, “Auf Wiedersehen, Kent”. This was a little homage to the gritty 1983 comedy series “Auf Wiedersehen, Pet”, about a group of unemployed builders who head to Germany in search of work. We thought that there was an obvious link to Brexit, although of course it is now bankers rather than bricklayers who are moving to Frankfurt to find a job.

As with our previous newsletter, we are rather spoilt for choice for historical trivia this time. However after the Government’s brawl with the Northern mayors, we felt we had to return to a topic we have touched upon before, the Rebellion of the Northern Earls of 1569, particularly as it includes the siege of Barnard Castle. 

Before that more on our usual topics.


Like many others, we thought earlier in the week, from the lack of public comment, that the negotiating teams were now in the “tunnel”, but this appears not to be the case based on the comments from Michael Barnier and David Frost yesterday. Nobody can tell you they are in the tunnel because they are in the tunnel. If they tell you they are in the tunnel, they are not in the tunnel. It is like a medieval religious cult. Anyway, a couple of relevant things have happened outside the tunnel:

  • The Financial Services Bill 2019-20, intended to ensure that the UK maintains its world-leading regulatory standards and remains open to international markets after we leave the EU has reappeared.
  • As part of its CMU proposals, the EU has announced consultations on ELTIFs and AIFMD. As we have been commenting for some time now, the progress on the CMU makes the loss of single market access for UK financial services businesses more significant.
These are discussed further below.

Also, as a cyclist, John can confirm that crashes can happen in tunnels and are usually worse if they are in a tunnel. On that cheery note….

Financial Services Bill 2019-20

As mentioned above, this is continuing on its tortured journey towards existence. Those with long memories will remember the fiasco that embroiled it in March 2019, in the heady days when the Conservative Government was limping along supported by the DUP. The Government faced a rebellion over the bill as up to 22 Conservative MPs were thought to be planning to defy the Government by voting for a cross-party amendment aimed at forcing new tax transparency rules on British Overseas Territories. The Government decided that pulling the bill at a few hours notice was less humiliating than having it voted down.

It reappeared in the Queen’s Speech in October 2019, after that whole prorogation of Parliament thing, but failed to find parliamentary time before Boris called his general election. It reappeared again in the next Queen’s Speech in December 2019. Further elements were announced in the Budget on 11th March this year. Things have obviously been a bit chaotic since then, so it has been rather delayed. It was finally introduced to parliament on 21st October and will receive its second reading, at which point it will be debated, on 9th November. With its long gestation and various areas on which there have been consultations, there has been ongoing debate and we have covered various parts that we think are particularly relevant for real estate investment managers. The key parts that we think are directly relevant are:
  • The introduction of a new prudential regime for UK investment firms, the Investment Firms’ Prudential Regime (IFPR), which will replace but heavily replicate EU legislation in this area, which is itself changing with the introduction of the Investment Firm Regulation and Directive prudential regime (IFR/IFD) to apply to all investment firms authorised in the EU from June 2021. The UK was heavily involved in the development of IFR/IFD, so it is not surprising that the proposed UK regime looks similar to the EU one, particularly in light of decisions on equivalence for market access, which we have covered (ad nauseam) in this newsletter. The UK changes will be timed to coincide with the EU changes;
  • There are proposals to ensure that individually recognised overseas collective investment schemes for retail investors can continue be marketed to individuals in the UK. This extends the existing provisions for individually recognised overseas collective investment schemes in section 272 of the Financial Services and Markets Act 2000 (FSMA 2000). When this was raised earlier in the year, it provoked gnashing of teeth in some quarters that the UK was allowing EU funds to continue to be marketed in the UK without any guarantee of equivalence in the other direction;
  • And, on a topic that provokes even more gnashing of teeth than the one above, changes, which do indeed appear to be improvements, to the onshored to the UK, European Union Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation. 
Not a direct impact, but there are detailed proposals for benchmark changes to allow the transition from LIBOR.

We will provide updates as matters progress.


We have cruelly mocked EU Long Term Investment Funds (ELTIFs) since the draft regulations were published on 26th June 2013, just as we were setting up John Forbes Consulting LLP. ELTIFs were the main subject matter off our very first newsletter in July 2013.  As we pointed out at the time, and regularly since, they are a bit rubbish. As outlined in our previous newsletter, the EU has now also noticed that they have not really taken off in the way originally anticipated. As part of the recent Capital Markets Union  (CMU) announcement (covered in our previous newsletter, see here), the first thing on the EU new CMU agenda is a consultation to ascertain why ELTIFs have not been met with unbridled enthusiasm, or in our case derision and laughter. The consultation has now been published. You can find it here

The consultation runs until 19th January 2021, so plenty of time to respond.

EU AIFMD Consultation

Another key element of the CMU is the improvement of the operation of the Alternative Investment Fund Managers Directive (AIFMD). The European Commission has published a comprehensive consultation on AIFMD. It is a bit of a monster, with 102 questions, although it is possible to choose to respond as a “citizen” in which case you only get three general questions and fourteen investor protection questions. 

You can download the consultation
here and respond here.

DWP consultation on DC pension schemes

As outlined in our previous newsletter, on 11th September 2020, the Department for Work and Pensions published a consultation "Improving outcomes for members of defined contribution pension schemes”. You can find it here. It has important implications for investment into physical property and other illiquid assets by DC pension schemes.

John fed into the Association of Real Estate Funds, Investment Association and British Venture Capital Association responses to the consultation.

We also submitted our own response, which you can find

You can find our paper from July, Designing real estate funds for DC pension investment, 

FCA consultation on open-ended property funds

We have submitted a detailed response to the consultation, which you can find here.

We also contributed to the Association of Real Estate Funds, Investment Association, Investment Property Forum and INREV responses. 

HMRC Consultation on ISAs

One of the key points in the FCA consultation on open-ended funds discussed above is the mismatch between the proposed requirements for funds and the current requirements for funds. The FCA had indicated in their consultation that they were discussing this with HMRC. HMRC published their consultation on 28th October. It proposes to allow existing investments in open-ended property funds to remain within the ISA whilst prohibiting the inclusion of ‘new’ investments in such funds. 

You can find the consultation
here. It runs until 13th December.

We will be responding and feeding into industry body responses.

Cayman off the EU blacklist, plus some other changes

As we anticipated, the Cayman Islands were removed from the EU list of non-cooperative jurisdictions for tax purposes on 6th October. As Cayman Islands and Oman were removed, Anguilla and Barbados were added. You can find the details here.


We mentioned in our last newsletter rumours that the implementation date would be delayed. On 20th October, John Berrigan, Director-General for Financial Stability, Financial Services and Capital Markets Union at the European Commission wrote to the heads of the ESAs confirming that the introduction of the level 2 regulation (the RTS) would indeed be delayed. You can find the letter here. You should note:
  • Although the letter states that there will be a delay, it does not say until when;
  • It implies, without expanding, that there will be further consultation;
  • Although the level 2 regulation is delayed, the level 1 is not, so the requirement to comply is there without the explanation of how.

You can find our EU ESG RTS information on our website here.

Press coverage of open-ended funds

John was quoted again, this time in Property Week, see here.

Congratulations to Urban Splash

Huge congratulations to our client Urban Splash on winning the Regional Deal Award at the Estates Gazette Awards 2020 last week. The deal that won the award was the establishment of the joint venture between Urban Splash, Homes England and Sekuisi House from Japan, the world’s biggest housebuilder. This brought new UK and international investment into “House”, a house builder using Modern Methods of Construction (MMC) to deliver new factory built homes. 

Historical trivia - the people in the North are revolting

As promised, we return to the Rebellion of the Northern Earls of 1569, which links into a couple of historical trivia matters that we have covered before.

The background to the rebellion starts with Mary Queen of Scots and her return to Scotland from France in 1561. We would refer you to the 2018 film, “Mary Queen of Scots”. Whilst it is shockingly inaccurate from a historical perspective, as we have previously mentioned, the ambush of Mary’s army by forces of the Earl of Moray was filmed on Poldullie Bridge in Bellabeg, deep in the lands of the Forbes Clan. The bridge is newer than suggested by the film, built by “Black Jock” Forbes in 1715.  Not featured in the film, but Mary had faced a bit of a rebellion in the area in 1562. The Earl of Moray, the Queen’s half brother, had been given the title by the Mary in 1562, which mightily annoyed George Gordon, 4th Earl of Huntly, who had already been given the title in 1549. He had a massive sulk and would not let the Queen into Inverness Castle when she visited later that year. Things spiralled out of control, Huntly raised his men and headed for Aberdeen. His force was attacked by clans loyal to the Queen, including the Forbes, at the Battle of Corrichie. We were not big fans of Mary, but an official opportunity to attack our neighbours and enemies the Gordons was too much too resist. Although defeated, Huntly survived the battle but dropped dead of apoplexy immediately afterwards. 

The next few years become very complex with assorted murders, rapes, and wars including a private war between the Gordons and the Forbes. The Earl of Moray (queen’s half brother version) rebelled giving rise to the memorable scene in the film at Poldullie Bridge. In 1568 Mary was forced to flee to England leaving an assortment of local civil wars continuing in Scotland. It was against this background that Charles Neville, 6th Earl of Westmorland and Thomas Percy, 7th Earl of Northumberland, 1st Baron Percy led an English Catholic rebellion of the North to support Mary. 700 knights gathered at the Earl of Westmorland’s seat of Brancepeth Castle in County Durham. The original plan had been to lay siege to York, but they rapidly lowered their expectations and opted for attacking Barnard Castle instead. The siege lasted 11 days, the castle falling after the attackers sabotaged the plumbing. Despite this initial success, the rebellion failed to gather enough support and fizzled out. 

In what may be a salutary warning for Andy Burnham, Elizabeth I responded to the failed rebellion with brutal reprisals and extensive executions.

As a footnote to all this, Barnard Castle fell into ruin after the siege. Other than a hermit who acted as a guide for tourists in the nineteenth century until he was taken away to a lunatic asylum, nothing further of note happened there until 2020.

Also, as today is 5th November, we should mention that suppression of the rebellion did not wholly deal with the problem of the revolting Catholics. On her abdication, Mary’s son had succeeded her as Jamie the Saxt, King of Scots. Following Elizabeth’s death in 1603, he also became James I, King of England. In 1605, a group of recalcitrant Catholics led by Robert Catesby, and whose number included Guy Fawkes, attempted to blow up the House of Lords with James in it. We assume that you are familiar with this so will not repeat it all here.

In view of people suggesting on social media that if you display a copy of Magna Carta in your business premises, it overrides the Covid lockdown regulations, we would like to draw to your attention that our historical trivia is intended as light-hearted humour and you should not use it as the basis for business decisions without taking legal advice first.

As usual, feel free to forward this email to others for whom it may be of interest.  If this message was forwarded to you, you can sign up to the mailing list here, and see the previous editions of this mailing here  You can unsubscribe from the list using the links at the bottom of this message.  Our privacy policy can be found here.

Helen Forbes
Copyright © 2020 John Forbes Consulting LLP, All rights reserved.
Email Marketing Powered by Mailchimp

This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
John Forbes Consulting LLP · 12-14 Ashville Road · Birkenhead, CH43 8SA · United Kingdom

Email Marketing Powered by Mailchimp