EUROPE - The vast majority of UCITS asset managers are set to consolidate their various companies as they prepare for the implementation of the UCITS IV directive.
In doing so, companies will need to consider the location of a centralised management company, and will take into account the tax regime and regulatory framework of that location, according to a survey by RBC Dexia Investor Services and KPMG.
The final text of UCITS IV - the fourth version of a directive on the integration of European Union market for investment funds - was voted by the European Council in June 2009 and EU member states will need to transpose it into national law by July 2011.
This directive will introduce among other things a full Management Company Passport (MCP), a new legal framework to facilitate cross-border UCITS mergers and improved cooperation mechanisms between national supervisors to supervise cross-border business models.
Some 43% of managers surveyed said they favoured setting up their business in Luxembourg, with 23% saying their group headquarters will be a likely consideration.
RBC Dexia chief industry and government relations official Jean-Michel Loehr said: "It is clear that the market is already readying itself to embrace this latest phase of UCITS and has made significant inroads in identifying the broad range of opportunities UCITS IV creates."
Forty-three per cent of managers polled indicated cost savings as the most important advantage to UCITS IV. Easier access to markets (24%) and increased competitiveness (21%) were also highlighted as positive outcomes of the new framework.
Only 2% of respondents said that UCITS IV brings no advantages, however 45% acknowledged the absence of a tax framework is a key issue.
Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.
This week's top stories included a Freedom of Information request revealing more than 100,000 savers could face six-figure tax bills as a result of GMP equalisation.
The Pearson Pension Plan has entered into a £500m pensioner buy-in with Legal & General (L&G) in the insurer's first deal of 2019.