Review of the UK funds regime - an analysis

What are the government’s objectives behind this call for input on the UK funds regime? 

The UK possesses the largest asset management industry in Europe and it generates 10% of the UK's total tax revenues. It is therefore an important sector to the UK and the government recognises the need to carry out a review to improve and enhance the competitiveness of the UK's fund range offering, in particular in comparison to its EU competitors post Brexit.

The government also sees this review as an opportunity that could lead to the promotion of new jobs outside of London in the key ancillary fund support sectors such as fund custody and administration by increasing the number and market share of the UK funds industry.

More specifically, the aim of the review is to promote more efficient investments, better suited to investors needs and to unleash additional investment into productive, sustainable and green technologies. There is a desire to improve routes through which capital can be committed to long-term assets. This is perceived to be important for pension funds and other long-term investors including retail investors in order to provide a source for diversification and potentially enhanced investment returns. This could also provide a source of capital to upgrade infrastructure, transition to a carbon neutral economy and support innovation to private enterprise.

This analysis was first published by LexisNexis on March 24, 2021.