The Association for Investment Companies has attacked the ineffectiveness of EU policymakers on fund regulations, such as Priips, urging the UK Government to set its own rules once out of the European Union.
The trade body says there are “potential benefits” for the UK to be solely in charge of its own standard rules around funds.
For instance, it says Priips has been delayed by one year because “EU policymakers have been unable to agree what they should include.”
It adds: “[The delay in Priips] is due to the difficulties of achieving a common disclosure for products sold in 28 countries. The UK authorities, focused solely on the needs of UK consumers, could act faster to determine what disclosures are needed and introduce them in a way which both delivers a consumer benefit and meets the needs of the funds industry.”
AIC chief executive Ian Sayers says the obligation to be subjective to EU rules on funds is “particularly unfortunate” for closed-ended funds as 95 per cent of these are held by UK-only shareholders.
He says: “Brexit should allow UK policymakers to deliver better targeted and more proportionate regulation. Ultimately this will mean lower costs and greater competition for the funds sector: a ‘Brexit dividend’ delivering long-term consumer benefits.
“If the Government takes this approach they will be able to maintain investor protection standards while also taking steps to maximise the competitiveness of the funds sector. As well as benefiting investors this will support the long-term future of UK fund management and its capacity to create jobs, invest in UK business and contribute to tax revenues.”
Last week, the three European regulators charged with bringing Priips into law have failed to agree on the proposed amendments to the directive following September’s vote of the European Parliament to reject some Priips’ standards originally proposed by the Commission.
In December, regulatory experts have warned that the investment industry faces entering a “holding pattern” over Priips rules as European legislators come under pressure to redraft the regulations ahead of new deadlines.
At that time, Brown Brother Harriman Fund Administration Services senior vice president Sean Tuffy says the ESAs and Commission will be keen to keep the changes to a minimum.
But he says: “Part of the reticence by the Commission to delay the implementation was concern that there would be lobbying for wholesale changes to Priips.
“This work by the ESAs and the Commission leaves the industry in a bit of a holding pattern and will probably lead a very tight turnaround to implement final Priips solutions.”