Platform reversal to deliver consumer friendly distribution
In a surprising and welcome development the Financial Services Authority has changed its proposed approach to platform charging. The AIC had long argued that the consumer interest will be best served if charging for different aspects of investment services was untangled from one another. This would create a ‘clean’, unbundled charging regime where the consumer pays separately and explicitly for any advice they receive, the fund they invest in and any platform on which they hold their assets. The FSA’s new proposals for platform charging take massive strides towards achieving this objective.
AIC seeks greater VCT investment flexibility
The Government has been seeking views on future investment practice by Venture Capital Trusts (VCTs) and other state-backed investment schemes. This is part of a process exploring options to simplify the VCT rules and deliver the Government’s ambition to more closely focus venture capital investment on business sectors with the greatest entrepreneurial potential.
Mounting pressure for Financial Transaction Tax
Following high profile support from the French and German Governments the European Commission has published proposals to introduce a Financial Transactions Tax (FTT). This represents an important milestone in the debate as a variety of European policymakers are seeking to put this issue firmly on the political agenda before the next meeting of the G20, scheduled for early November.
US delays imposition of tax avoidance rules
The introduction of controversial US legislation, the Foreign Accounts Tax Compliance Act (FATCA), is to be delayed. This law requires non-US (or foreign) financial institutions (FFIs), including investment companies, to register with US tax authorities. The consequences of failing to do so will be a withholding of 30% on the receipt of all US dividends, interest and gross sale proceeds of US shares and securities. The measure is designed to capture details of US persons who may be using offshore accounts and investments to avoid tax. A collateral consequence will be to place significant administrative burdens on entities trying to comply with the regime and avoid significant reductions on the returns they receive from US assets.
