Global mutual funds in the new millennium was the focus of the third annual US/Ireland Mutual Fund Co...
Topics at the two-day event included global regulation, e-commerce, Dublin as an international asset management centre and emerging fund centres.
Anthony Fisher, managing director at First Financial International Consulting, focused on Cyprus, Malta, Singapore and Mauritius, which he identified as emerging contenders in the mutual fund market.
There are basically five levels of tax which all the centres are trying to attack to become the most efficient tax centre: The level of the fund. The tax taken on where the investments are held. Remittances for those investments. Paying out of the fund to an overseas jurisdiction. Tax taken from the fund in the hands of the shareholder.
According to Fisher, all five levels need to be looked at together. The fund area is also an excellent example of how tax competition can benefit an industry.
Fisher said: "The reason funds have become global is because some of the pioneering centres which introduced the exempt funds set the competitive benchmark when it comes to quality.
"If you look around at the UK, France, Belgium and Germany, all of them offer tax transparency and tax exemption. Tax competition has worked to bring tax down to the exempt levels across the board."
Cyprus and Malta are both in the process of entering the European Union, which sets up the clear prospect of those two centres having access to the largest single market for financial services in the world and becoming credible centres to offer Ucits in competition with the traditional centres.
Technology, with e-commerce and all the infrastructure that goes with it, is leading to two things.
On the one hand, it is creating consolidation which might make it difficult for a newcomer to get into the market. Technology is allowing seamless operations to be run out of one centre, irrespective of where the investors are or where the distribution channels are around the world.
On the other hand, it is also leading to disintermediation, which means that elements of a fund's value chain can be broken up and sent to the place best suited to that activity. This is where the opportunity arises.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected