Strategic collaboration for a successful complex UCITS licence application
The challenge: applying for a UCITS licence in the Netherlands for a manager overseeing a UCITS fund to be established in Ireland.
The challenge: applying for a UCITS licence in the Netherlands for a manager overseeing a UCITS fund to be established in Ireland.
A foreign client from a non-EU country, specialising in private equity investments with a focus on sustainability, sought to expand its scope by establishing a UCITS fund manager within the EU. The fund aimed to focus on investments in publicly listed companies that promote sustainability. To achieve this, the client decided to set up a management company in the Netherlands and brought on board experienced Dutch investors who had previously worked for a major Dutch institution.
The challenge: applying for a UCITS licence in the Netherlands for a manager overseeing a UCITS fund to be established in Ireland. Initially, the UCITS fund would be managed by an Irish fund manager (an unaffiliated party). This process required not only knowledge of Dutch regulations but also a thorough understanding of international laws and regulations. Projective Group consultant Robert Slange explains how Projective Group provided support in collaboration with an international law firm.
Robert elaborates on why the application process was so complex: “The UCITS fund was being established in Ireland, requiring a separate licence in Ireland. Initially, the fund was to be managed by an Irish fund manager (a third party). At the same time, we had to coordinate the application for a Dutch management company that would eventually take over the management of the Irish fund. This meant ensuring compliance with both Dutch and Irish regulations.”
“Following a previous successful collaboration, we were engaged by the Dutch branch of an international law firm. Their Irish branch was involved in setting up the fund in Ireland, while their Dutch branch focused on establishing the entity in the Netherlands. They were looking for someone to assist with the licensing process in the Netherlands, particularly in terms of policies, procedures, the business plan, and the design and structure of the organisation.”
The biggest challenge was aligning the various legal entities and meeting the requirements of both countries. “It was quite a puzzle,” says Robert. “But by closely collaborating with the law firm and the client, we managed to get everything done on time and in accordance with the regulations.”
It was quite a puzzle
Another challenge was obtaining the required declarations of no objection from the Dutch Central Bank (DNB) for all parties holding a direct or indirect interest of 10% or more in the Dutch management company. As this involved various individuals or entities outside the Netherlands, it was a significant undertaking.
The law firm focused on formal aspects such as legal documentation, agreements, and the establishment of entities, while we concentrated on the practical side of the licensing process, including operational processes and policies. “Our added value lay in translating policies and procedures into workable structures, together with the client,” Robert explains.
Our added value lay in translating policies and procedures into workable structures, together with the client
Our collaboration with the law firm was complementary: we seamlessly complemented each other’s work without overlapping. A key part of our added value lies in how we manage the process together with the involved law firm. “We ensure that the client doesn’t need to worry about the coordination between various parties. We make sure everything runs smoothly,” Robert explains.
This avoids confusion and eliminates duplicate costs. “When multiple parties are involved, we ensure that everyone knows exactly what their role is. This prevents overlaps and significantly speeds up the process.”
“The timeline for obtaining a licence heavily depends on the client’s responsiveness and preparation,” Robert notes. In this case, the preparation phase lasted about five months, during which the blueprint for the organisation was drawn up, policies and documents were formulated, documentation was aligned with that of the Irish fund, outsourcing agreements were prepared, and the application was submitted. The client’s active participation—quickly responding to draft documents, making decisions, and implementing the operational setup—ensured the process went as smoothly as possible. The licence was ultimately granted nine months after submission.
However, the process didn’t end with obtaining the licence. “Afterwards, it was crucial to sustainably set up the operations,” says Robert. Projective Group supported the implementation of processes and the preparation of the compliance strategy. Additionally, we continue to provide ongoing support and advice.
The key to a successful licence application, according to Robert, lies in close collaboration between all parties involved. “By maintaining clear communication with the client and the law firm, we avoided duplicate work and ensured that everyone had the right information. The client’s active involvement was another essential factor for a smooth and successful process.”
The client’s active involvement was another essential factor for a smooth and successful process.
The quality and completeness of the documentation are also critical, Robert emphasises. “When drafting documents, we always keep the regulator’s expectations in mind and thoroughly prepare the client for potential questions. Additionally, we ensure that the documents are not only suitable for the licence application but also practical enough to support operations afterwards. This saves time and provides a solid foundation for post-licence operations.”
Applying for a licence is a complex process that requires specialist knowledge and extensive preparation. Our ‘licence application Roadmap’ is designed to help financial institutions prepare for their application. We outline the thirteen key steps to obtaining a licence, including useful tips and potential pitfalls.
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