EU fund managers will have a level of access to the UK market which will be denied to UK groups look...
EU fund managers will have a level of access to the UK market which will be denied to UK groups looking to sell into Europe under a forthcoming Ucits directive.
The directive, just approved by the European Council, includes a proposal allowing groups domiciled within the EU to sell into other member states without having to set up a localised management company in these markets.
The UK is one of a number of states that would be disadvantaged under these current passporting plans.
Groups would only be able to enter countries that have Oeics or Sicavs on this basis, for example the UK or Luxembourg. However this passporting does not extend to countries which only have what are termed "contractural funds", essentially the equivalent of unit trusts. This means groups would not be able to passport into Germany, Italy and Sweden, although fund groups domiciled here could passport into the UK.
Autif has been lobbying against this element of the directive which still has to be passed by the European parliament before it is enforced. This is on course to be before the parliament in May.
Julie Patterson, senior international policy adviser at Autif, said: "If this is passed then UK managers can still use the existing rules, which work as a product passport. This means groups have to have a presence within that country and they also can only replicate funds within their existing range, they can not establish new funds designed for that particular market."
The directive also includes changes which would allow for cash and fund of funds within Oeics. This element is being backed by Autif.
When the directive goes to parliament it will then be looked at by the Economic and Monetary Afairs Committee. Amendments could be made at this stage.
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