The IMA is to create a "classy, comprehensive and responsive" help centre for fund groups looking to set up shop in the UK.
Speaking to Investment Week, IMA chief executive Daniel Godfrey explained the trade body’s plans to encourage overseas fund managers to base themselves in London, rather than Dublin or Luxembourg.
The initiative follows Chancellor George Osborne’s announcement in the Budget of a “targeted package of measures” to enhance the attractiveness of the UK for asset managers. The centrepiece of this was the scrapping of the Schedule 19 charge on funds – a tax often cited as the leading deterrent to setting up a fund in the UK.
“The UK is the leading centre for asset management in Europe, but many of the funds managed here are based overseas,” Osborne said.
“In places like Edinburgh and London, we have a world-beating asset management industry but they are losing business to other places in Europe.”
Godfrey welcomed the abolition of the Schedule 19 charge, but said the next step is quicker approvals for fund authorisation.
“We need to have a competitive tax regime and the government’s move was a big step in the right direction,” he said.
“One point the regulator could work on is quicker approvals for fund authorisation, and perhaps the possibility of fund groups paying a fee for fast authorisation.”
The IMA is working together with interest group TheCityUK over the coming weeks to lay out plans for a “one-stop shop” where overseas fund groups can get help in navigating the system to domicile their funds here.
Although the details are still being finalised, Godfrey envisages creating a “classy, comprehensive and responsive” system.
“We need joined-up thinking so groups do not feel the welcome mat would be pulled away as soon as they come in,” he said.
A working group will talk over the coming weeks to decide what kind of resources will be appropriate. While Godfrey said it is likely having people able to meet face-to-face with fund groups would be better than an online-only service, he is not certain staff would have to be employed full time.
In terms of the potential scope of new business for the UK, Godfrey pointed to the billions of assets in UCITS funds domiciled in Ireland, the bulk of which are sold to UK investors.
There were €967bn of UCITS fund assets domiciled in Ireland at the end of 2012, according to the Irish Funds Industry Association, which also reported 18% year-on-year growth from 2011.
Although Godfrey said he was under no illusions there would be a rush to re-domicile, he said Dublin’s success as a hub for funds in Europe illustrates the scale of opportunity for the UK.
“We are not going to see all of those coming back, but that shows you what is possible. The UK has a lot to offer in terms of support services,” he said.
“What will really drive it here is people saying the UK has a good governance regime that acts in the interest of consumers. It will take time, but potentially the market could be quite big.”
Although there is still some uncertainty over the future shape of fund regulation in the UK, Godfrey said he was keen for the IMA to liaise with the FCA to ensure the UK remains welcoming to foreign firms.
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