MOVING UP A GEAR - PRIORITISING THE WAY AHEAD

FOR ASSET MANAGEMENT IN EUROPE

IMA has today published “Moving up a gear? A survey of the developments in the single market for asset management during 2003/04.”

The survey evaluates the progress made by the asset management industry since the publication of the Heinemann Report¹ in 2003. It identifies a number of promising developments, such as an increasing recognition by the authorities of the distinctiveness of asset management and industry initiatives on the convergence of performance measurement. It also identifies some retrograde steps such as inconsistent implementation of the new UCITS directive and new tax barriers in Belgium. 

The Association has identified the following key areas on which it has been working and will be publishing detailed reports later in 2004. 

• Registration – The requirement for funds to be registered in each state in which the fund is sold appears increasingly anachronistic. It adds to costs and introduces delays. IMA recommends that this process be simplified or abolished and will be publishing a paper outlining the costs of the existing regime and benefits of reform, based on members’ practical experience.

• Mergers – There are many small funds in Europe which cannot benefit from economies of scale. Investment managers wishing to rationalise their portfolios are subjected to regulatory barriers and discriminatory tax treatment when merging funds, particularly cross-border. IMA has convened a group of experts in order to consider the barriers to mergers and identify a way forward, which may require legislative change at EU level.

• Pooling – IMA proposes that a cross-border framework for ‘pooling’ is developed, which will again help achieve economies of scale. This would benefit investors in both investment funds and cross-border pension funds. IMA has been studying the various techniques in use at the moment and the regulatory barriers which have been encountered, with a view to making detailed recommendations later in the year. 

These issues were all raised in the report of the Asset Management Expert Working Group² published in May 2004. That report will be discussed this week at a conference convened by the European Commission to consider progress and prospects for financial integration in Europe.

Sheila Nicoll, Deputy Chief Executive of the IMA commented:

“There is a real enthusiasm within the asset management industry to improve the single market and a considerable frustration at the barriers which get in the way. The European Commission and Committee of European Securities Regulators are recognising this and IMA’s proposals are the next stage in supporting them to remove cross-border barriers. We will be doing all we can to keep the momentum going.”

A copy of the survey “Moving up a gear? A survey of the developments in the single market for asset management during 2003/04.” is attached.

-Ends-

For further information, please contact:

Sheila Nicoll, Deputy Chief Executive, IMA, +44 (0)20 7831 0898

Helen Stephenson, Communications Officer, IMA, +44 (0)20 7831 0898

Out of hours contact:

Mona Patel, Head of Communications, IMA, +44 (0)7834 089332

Notes to Editors:

¹The Heinemann Report “Towards a single European market in asset management” was a study commissioned by the Investment Management Association and was published in May 2003. The report analyses the benefits and barriers of a single European market for asset management. A copy is attached.

²The Asset Management Expert Group was one of four groups set up to report on the state of financial integration following the Financial Services Action Plan. The other Expert Group reports cover banking, insurance and securities.  A copy of the Asset Management Report and Executive Summaries of all four reports are attached.

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Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.