BNY Mellon to Service U.K.’s First Tax Transparent Fund

BlackRock has appointed BNY Mellon to provide custody, fund administration and trustee services for the U.K.'s first Tax Transparent Fund (TTF).
By Janet Du Chenne(59204)
BlackRock has appointed BNY Mellon to provide custody, fund administration and trustee services for the U.K.’s first Tax Transparent Fund (TTF).

The launch of the BlackRock fund follows the introduction of the U.K. TTF on July 1, 2013, after a period of consultation by the U.K. government. The U.K. TTF allows investors to maintain their tax position and access double taxation treaty benefits as if they had invested in the fund’s underlying assets directly, while achieving the administrative, governance and scale benefits of investing via a pooled vehicle.

The BlackRock ACS US Equity Tracker Fund will initially be offered to those U.K. pension fund clients of BlackRock that are investing in U.S. equities, with the expectation that this will be extended to other asset classes in the future.

The new mandate expands BNY Mellon’s existing relationship with BlackRock, which already encompasses custody, fund accounting and trustee services for a range of the investment manager’s U.K. and offshore funds.

Tony Stenning, head of U.K. Retail at BlackRock, says: “Given the ever increasing complexity for today’s investors, delivering simple, transparent, tax efficient solutions has arguably never been more important. The introduction of this new structure by the Treasury last year is an important step in the next generation of tax efficient solutions for U.K. investors. We also welcome the arrival of a level playing field, bringing the U.K. in line with other European fund centers.”

Equivalent tax-transparent structures are already available in Ireland (the Common Contractual Fund), Luxembourg (FCP or Fonds Commun de Placement) and the Netherlands (FGR or fondsen voor gemene rekening).

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