On 10 February 2022, HM Treasury published a summary of responses to the January 2021 call for input on the review of the UK funds regime and sets out next steps.
The overarching objective of the review is to identify options which will make the UK a more attractive location to set up, manage and administer funds, as well as support a wider range of more efficient investments better suited to investors’ needs.
The objective is underpinned two key initiatives that the government has already taken forward as part of the review, namely:
- A new tax regime for qualifying asset holding companies in certain fund structures.
- Facilitating the introduction of the Long-Term Asset Fund (LTAF) structure.
The call for input set out the objectives and scope of the review and requested feedback on which reforms should be taken forward and how they should be prioritised. It sought to build on the significant pre-existing body of work and sought views on several specific proposals, but also invited new ideas for reform.
The government received 79 responses from a range of stakeholders including asset management firms, management consultants, institutional investors, accountancy bodies, law firms and trade bodies. Overall, respondents were supportive of the scope and ambition of the call for input.
Chapter 3 of the response sets out the next steps that the government and FCA (where applicable) propose to take forward. This includes a workstream focusing on further reforms to real estate investment trusts (REITs), which will also consider the interaction of REITs with the new asset holding company regime. There will also be further work to explore options for the introduction of a new unauthorised contractual scheme fund structure.
In addition, the government and the FCA will be working to enhance the UK funds regime through ongoing work to facilitate the rollout of the LTAF, including a planned FCA consultation on potentially changing the restrictions on the promotion of LTAFs to allow distribution to a broader range of retail investors.