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Delivering a ‘Brexit Dividend’ – AIC recommends layered approach to funds regulation

9 January 2017

The AIC is urging the Government to secure consumer, competitive and regulatory benefits following the UK’s withdrawal from the EU by taking a layered approach to funds regulation.

Tailoring funds regulation approach following Brexit: Consumer, political and regulatory opportunities in the funds sector.

Many EU laws will be carried over following the UK’s departure from the EU to ensure regulatory stability and consumer protection.  However, once the transition has been achieved, the Government should avoid a ‘one size fits all’ rulebook for the funds industry. Brexit should allow the UK to set its own rules for funds and asset management services provided solely to UK or non-EU customers, which make up 80% of the UK’s asset management activity.  Adopting the AIC’s recommendation would allow firms that choose to provide products or services to EU clients to opt in to EU regulations as necessary.  

Ian Sayers, Chief Executive, Association of Investment Companies (AIC) said: “Brexit should allow UK policymakers to deliver better targeted and more proportionate regulation.  Ultimately this will mean lower costs and greater competition for the funds sector: a ‘Brexit dividend’ delivering long-term consumer benefits.  

“If the Government takes this approach they will be able to maintain investor protection standards while also taking steps to maximise the competitiveness of the funds sector.  As well as benefiting investors this will support the long-term future of UK fund management and its capacity to create jobs, invest in UK business and contribute to tax revenues. 

“At the moment UK funds are subject to EU obligations whether or not they are marketing into other Member States.  This is particularly unfortunate for the closed-ended investment company sector which is 95% held by UK shareholders but is burdened by rules designed to govern cross-border marketing within the EU.”

Benefits of regulatory approach

There are potential benefits of putting UK policymakers in charge of standards for UK consumers.

This is demonstrated by the delay over the PRIIPs rules, which will require all funds sold to retail investors to have a Key Information Document (KID).  The introduction of KIDs has been delayed because EU policymakers have been unable to agree what they should include. This is due to the difficulties of achieving a common disclosure for products sold in 28 countries. The UK authorities, focussed solely on the needs of UK consumers, could act faster to determine what disclosures are needed and introduce them in a way which both delivers a consumer benefit and meets the needs of the funds industry.


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  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed ended investment companies, incorporating investment trusts and other closed ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help Members add value for shareholders over the longer term. The AIC has 345 members and the industry has total assets of approximately £157 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.


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