Credit Agricole Investor Services (CA-IS) claims to have implemented the first true cross-border globalisation structure for a mutual fund, using its patented “cloning” technique.
The globalisation scheme, which will operate from tomorrow, is between an existing Luxembourg-based fund and a Dublin-domiciled fund launched on 24 September.
“The globalisation principles between the two funds have been approved respectively by the Luxembourg and Irish regulatory bodies,” says a spokeswoman for CA-IS in Luxembourg. “The cloning technique is the most sophisticated globalisation tool because of the permanent segregation of assets it maintains at each globalised entity level.”
Permanent segregation of the assets is key in cross-border schemes to allow regulators in each jurisdiction to retain responsibility for local assets. “Permanent segregation does not apply for other globalisation techniques, in particular those associated with pooling,” says the spokeswoman.
Cloned funds have already been set up in Belgium and Luxembourg. First developed by CA-IS in 1995, the cloning technique has been used by a number of its clients to optimise asset management and product distribution. Today, the bank administers cloned funds totalling over EUR25 billion in Luxembourg and Belgium.
Luxembourg cloned funds are authorised for public distribution in more than 20 countries.
The cloning technique has already been approved in principle by the authorities in the USA, France, Switzerland and Italy.