Leeds Reforms are a big step in the right direction, but issues remain and government could be bolder
AIC responds to package of measures announced by the Chancellor today.
The Association of Investment Companies (AIC) has responded to the Leeds Reforms, a package of measures announced by Chancellor Rachel Reeves to cut red tape and boost the financial system.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “We strongly support the industry-wide campaign to get more people investing. We need a real push to improve financial literacy and promote a better understanding of risk, return and the value of investing for the long term.
“The direction of travel is encouraging, but the government could be bolder. The ISA regime is badly in need of simplification. We want the government to create a single investment ISA, merging the stocks and shares ISA and cash ISA. The government should exempt share purchases within the ISA from stamp duty. This would aid consumer understanding and encourage investment, supporting UK-listed companies and boosting growth.”
We are surprised to see the government announce that it will allow long term asset funds (LTAFs) to be held in ISAs from next year. LTAFs are an unproven structure with redemption mechanisms that are untested and could be challenged in difficult market conditions.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC)
Long term asset funds (LTAFs)
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “We are surprised to see the government announce that it will allow long term asset funds (LTAFs) to be held in ISAs from next year. LTAFs are an unproven structure with redemption mechanisms that are untested and could be challenged in difficult market conditions. The government’s priority should be encouraging investment in listed companies, supporting the UK stock market and allowing investors to access private assets like infrastructure in a transparent, easily traded structure.”
The Alternative Investment Fund Manager (AIFM) regulations
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “Reform of the AIternative Investment Fund Manager regulations is rightly highlighted as an opportunity. The EU has no comparable investment company sector and the rules were always a poor fit for our industry. We need to make sure the regime meets UK needs, removing overlapping requirements, reducing costs and increasing the attractions of using UK listed closed-ended funds.”
Venture capital
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “The intention to create an ambitious package of reform for venture capital is important. Venture capital trusts (VCTs) have a track record of funding small businesses that struggle to raise development capital from traditional sources. Streamlining VCT rules will empower VCTs to support a wider range of innovative, entrepreneurial companies with ambition to grow, create new products and generate jobs. The AIC has put forward proposals to achieve this without additional cost to the Exchequer and I urge the Chancellor to take these forward in her next financial statement.”
Recognition of investment companies
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “The recognition of the distinctive advantages of our home-grown investment companies is important. The UK leads the world in these funds, having overtaken the US as the largest market a few years ago. Our position as the global leader in this sector reflects our success in offering access to private assets as well as traditional listed markets. The government has the opportunity to rebalance the tax and regulatory frameworks that govern investment companies, allowing our members to do even more to secure better returns for investors whilst funding UK businesses and infrastructure.”
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Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 295 members and the industry has total assets of approximately £262 billion.
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