Asset management in Europe: The case for reform
Fund managers are estimated to be spending around €1.5 million in regulatory and administrative costs to market and distribute their funds across the EU despite UCITS IV being introduced to make distribution more straightforward, according to a research paper
A paper - “Asset Management in Europe: The Case for Reform” – published by The New City Initiative, an industry think tank and Open Europe, calculates the on-going costs for a UK-based fund manager to distribute across the EU could be as high as €1.4 million.
Many of these costs are derived are from processing fund passports, local paying agents, translation charges and legal fees. Some jurisdictions also have unfavourable tax laws, most notably Germany and Austria, which can add significant overheads to operating costs.
UCITS IV, implemented in 2011, barred member states from introducing impediments to distribution but this appears to have been disregarded by some countries. As such, the paper recommends that EU managers marketing only into their home member state be exempted from some of the more onerous aspects of EU regulation.