The Association of Investment Companies (AIC) has proposed abolishing the Alternative Investment Fund Managers Directive (AIFMD) following the UK’s decision to leave the European Union.
In a report entitled ‘tailoring funds regulation following Brexit’ the AIC outlines several benefits the UK funds industry could experience if AIFMD was no longer implemented in the country.
The report suggests removing AIFMD would allow the UK to be free to introduce specific target measures if they were considered necessary.
It would also reduce unnecessary costs and help deliver stronger product pricing for investors, the AIC said.
It added that UK’s competitiveness as a location for funds and asset management would also be increased along with the competitiveness of funds marketed into the EU by UK alternative investment fund managers (AIFMs) under the private placement rules.
Despite many EU laws being carried over following Brexit to ensure regulatory stability and consumer protection, the AIC has implored the government not to implement a “one-size-fits-all” rulebook for the funds industry.
The AIC has instead proposed a “layered approach to funds regulation”, which would secure consumer, competitive and regulatory benefits.
Implementing such measures would be a “striking political statement of the UK’s intention to deliver a Brexit dividend” according to the AIC.
“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,” said Ian Sayers, chief executive of the AIC.
“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,” said Sayers.