FCA introduces new tax transparent funds in AIFMD guidance

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The Financial Conduct Authority has introduced new tax transparent fund structures to align the UK asset management industry with the rest of Europe.

In its policy statement on the implementation of the Alternative Investment Fund Managers Directive, the regulator introduces two legal forms of collective investment schemes – the ‘co-ownership scheme’ and ‘limited partnership scheme’ .

Both fund structures do not incur tax liability and are currently available in other parts of the European Union.

The FCA says the introduction of the collective investment schemes will help to support the Government’s efforts to encourage greater investment in UK funds by aligning the country’s regulatory framework in a more competitive way to the rest of Europe.

The fund structures were introduced in the watchdog’s AIFMD policy statement, which was published to offer more clarity to the UK asset management industry over how they will be regulated under the rules.

FCA director of policy, risk and research Chris Woolard says: “The implementation of these changes is a crucial development for the asset management industry and consumers.

“Ensuring certainty about these new measures has been a priority for the FCA. By publishing our rules now and implementing the directive on time, we are delivering that certainty and increasing cross-border opportunities for UK firms.”

AIFMD was adopted by the European Commission last year and aims to form an EU-wide framework for monitoring alternative investment fund managers and the funds they manage.