The UK should ally with other major financial markets in a cooperative regulatory alliance on exiting the EU, a think tank has said.
The Institute of Economic Affairs said an alliance should be allowed to agree an acceptable mutual recognition regime, which would give it a “strong” negotiating position when discussing regulatory matters with other global financial centres.
The F4 Alliance project, proposed by the Swiss Bankers Association, aligning the UK with Switzerland, Hong Kong and Singapore, could grow to include other financial centres such as Japan and New York and the crown dependencies, the institute said.
The London-based think tank also called for the reinstatement of section 270 of the UK’s Financial Services and Markets Act 2000, which gave non-Ucits funds a marketing route into the UK that was well-used by Guernsey funds before the introduction of the EU’s Alternative Investment Fund Managers Directive.
The proposal was welcomed by the promotional body for the Channel Island’s finance industry, Guernsey Finance.
“The UK should also actively encourage investment funds presently managed from London but domiciled in the EU to move their domicile back to the UK, crown dependencies or overseas territories,” the IEA report said.
Andy Sloan, acting director of strategy at Guernsey Finance, said: “The IEA support for leveraging mutual recognition across investment funds regime is something we strongly support and applies not purely in the Brexit context,” he said.
He added: “We also endorse the IEA’s support for moves to enhance the Channel Islands’ ability to complement the UK investment management sector post-Brexit by reinstating the mechanism for recognition of funds regimes.”
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