According to the head of the Association of Investment Companies, in order to achieve this so-called ‘Brexit dividend’, the government needs to take a layered approach to funds regulation.
In a press release issued on Monday the AIC said that while many EU laws will need to be carried over following Brexit in order to ensure regulatory stability and consumer protection, “once the transition has been achieved, the Government should avoid a ‘one size fits all’ rulebook for the funds industry”.
Instead, the AIC said, the government should take advantage of the flexibility provided by Brexit to set its own rules for funds and asset management services provided solely to UK or non-EU customers, which, it pointed out, make up 80% of the UK’s asset management activity.
“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,” Sayers said.
Citing the delays over the Prips rules as an example of the type of regulatory morass into which the EU is liable to sink, Sayers added: “The UK authorities, focussed 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.”
These changes would mean that UK policymakers are able to deliver better targeted and more proportionate regulation, Sayers added, which should ultimately lead to “lower costs and greater competition for the funds sector”.
