Regardless of the outcome of Brexit the European Commission needs to readdress the fund passporting regime, Investment Association interim chief executive Guy Sears says.
Speaking at the Morningstar Investment Conference this week, Sears said: “We still need to address passports whatever we stay in or out the EU. We need to make sure it is implemented properly.”
Over the long term, financial services regulation will be the key focus following the referendum, as well as the impact on the real economy, Sears says.
“The most important thing about the referendum is regulation and its longer term impact. There is a growing demand over costs and transparency which will continue wherever we are [in or out the EU].
“The EU membership will significantly benefit our industry, which manages £5.5trn assets.
“The real economy, it is absolutely vital that we get it right. It is here that we will watch carefully the referendum result.”
This morning, the IMF released a report stating London’s status as a global financial centre “could be eroded” if there is a vote for Brexit at the June referendum, pointing in particular to the impact of UK-based firms losing their passporting rights to provide financial services to the rest of the EU.
The IA has previously said that despite the success of the passporting regime and its benefits to the industry improvements could be made to further integrate the EU market.
In particular, the trade body has said there could be a further harmonisation of distribution arrangements across member states and a single harmonised pan-EU fee as there is some differentiation across member states in regulators’ fees on imported or passported funds.
Last month the European Commission confirmed it will launch a consultation into fund passporting after small fund managers raised a number of issues on marketing their products abroad.
In a speech in Amsterdam, European Union commissioner Jonathan Hill said asset managers had told them the existing EU passporting system “isn’t working properly”.