European funds association Efama has asked the UK to go further in its recognition of EU-domiciled retail funds to ensure that investors can access such funds as easily as UK-domiciled funds.
The call comes after the UK published details of its Overseas Fund Regime (OFR) and its treatment of international funds.
The OFR replaces the Temporary Marketing Permission Regime and offers a streamlined access to the UK market in comparison to the current process which is described by Efama as “time-consuming”.
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In addition the UK has stated that EU-based Ucits funds are considered as equivalent to the UK regime – a regulatory alignment that was welcomed by Efama as beneficial to investors and asset managers alike.
But while Efama praised the “pragmatic approach” adopted by the UK’s Financial Conduct Authority (FCA), it has also called on the UK to go further in its treatment of EU retail funds.
The trade body has called on the UK to reduce some of the regulatory and supervisory burden that would stem from the OFR, particularly when similar requirements do not exist for UK funds.
It has also called for OFR-recognised funds to be able to meet their regulatory reporting requirements by uploading information to the FCA’s online portal rather than manually.
“Although most funds bought in the UK have their domicile in the UK, we strongly believe that European funds can bring real value to UK retail investors. In fact, according to the Investment Association, their share of the UK market has increased over time,” said Marin Capelle, regulatory policy adviser at Efama.
“We hope that the Overseas Fund Regime will allow UK investors to continue to choose funds based on their respective merits, regardless of where the fund’s domicile is located.”
