IIMI, the boutique asset management think tank, has today published a new paper, entitled “Strengthening the UK’s Asset Management Industry”, in which it shares the views of its diverse membership on how the UK government could potentially stimulate future growth in the asset management sector.
There were four main areas where members felt there was a significant opportunity for improvement:
· Streamlining of authorisations
· More proactive promotion of UK as an asset management centre
· Simplification of regulations
· Development of a new fund regime
IIMI’s recommendations:
- The UK regulator should consider streamlining the fund authorisation process – especially for managers who are only selling their products to institutional investors.
- There needs to be greater engagement by the regulator with the industry about ways to strengthen and enhance the UK asset management sector’s position in the global market.
- The UK regulator also needs to replicate its peers in Luxembourg and Ireland in terms of its commitment to promoting the UK as an asset management hub.
- Reform of certain regulations – such as PRIIPs – would help support the local funds industry, as would sweeping changes to existing VAT rules.
- If such reforms are enacted, there is likely to be greater re-domiciliation of funds into the UK – a shift which could result in asset servicing jobs being created across the entire country.
Nick Mottram, Chairman of the Independent Investment Management Initiative, commented:
“As the UK recovers from COVID-19, it is vital that the country’s highly successful asset management industry remains competitive. While Brexit has thrown up a number of operational and logistical challenges for domestic asset managers marketing into the EU, the UK’s new-found autonomy does give it much greater flexibility to shape regulation and policy as it relates to funds.
“Much of the feedback received from our members did not come as a surprise. For example, a number have suggested that the time-frame for FCA fund authorisations be reduced from six months to one month, while there are also calls for firms whose target client base is wholly institutional to be allowed to engage in a certain degree of pre-marketing ahead of being authorised.
“Looking at the bigger picture, IIMI continues to be a firm advocate for the development of a domestic UK fund regime. The UK is home to a wide range of asset management talent, best in class service providers, a deep pool of legal and accountancy expertise, and a solid regulatory and common law regime. As such, the country is in an excellent position to support the re-onshoring of funds and, with it, asset servicing jobs.
“Should there be widespread re-domiciliation of funds, this could have a significant impact on the fortunes of the UK economy. With the incumbent government now prioritising regional economic development, IIMI believes the asset management industry could help facilitate this.
“If the UK is able to develop a popular fund structure, it could result in a huge increase in asset servicing roles – many of which do not necessarily need to be carried out in London. If more professional services firms – such as fund administrators – establish themselves in the regions, local economies will flourish. This is an idea which the UK government is actively exploring and we hope to see it come to fruition.”
