History Policy Papers

A New Regime for Asset Management: Why the UK should adopt a Dual Funds Regime

IIMI publishes “A New Regime for Asset Management” paper, advancing the case for why the UK should adopt a Dual Funds Regime.

The New City Initiative (NCI) was formed to provide a collective voice for smaller boutique managers which were being overlooked by policymakers, regulators and to a lesser extent customers, who did not always appreciate the strong alignment of interests and risk management culture that differentiates boutiques from larger firms.

Recent years have seen waves of regulation and boutiques have shown the flexibility required to deal with this despitetheir smaller size. Post-Brexit, we operate in a world of “VUCA” – Volatility, Uncertainty, Complexity and Ambiguity. This presents challenges for all firms, but therein lies the opportunity.

The exact regulatory and competitive landscape is still to be finalised. It is therefore vital that the industry puts forwardideas and potential solutions for debate and that those responsible for shaping the agenda, negotiating terms and planning for the future, open a dialogue with all participants. In this paper, the NCI outlines how an agile and thoughtfullyconsidered dual funds regime in the UK could help firms retain EU access, but also expand and grow beyond the EU.

This regime – as the paper points out – would allow for further innovation by UK managers in a global marketplace. Fund management is one of the UK’s most successful exports, and we feel a dual regime respecting both UK and EU interests, can bring about new opportunities and be practical, proportionate and fully protective of consumer interests.

The key for all businesses, not just within financial services, is clarity and certainty, and this must be provided by the government. The financial infrastructure and regulation of the UK is so intertwined with Europe that Brexit will require time and patience to implement effectively. This paper provides one solution which could be implemented with relative ease.

Jamie Carter

Deputy Chairman, New City Initiative Chief Executive, Oldfield Partners