George Osborne

Implications of the UK 2013 Budget for Investment Funds

The 2013 budget, delivered by the U.K.’s Chancellor of the Exchequer, George Osborne on March 20, incorporated a number of provisions affecting investment funds, which are included in a UK investment management strategy.

The U.K. government announced a package of measures in areas of taxation, regulation and marketing, designed to make the UK one of the most competitive places in the world for investment funds.

Regarding taxation, stamp duty reserve tax is to be abolished by 2014/15, and withholding rules for bond fund interest distributions are to be altered to make these funds more attractive to foreign investors.  Changes will also be made to tax provisions on the residency status of offshore UCITS, the investment manager’s exemption and tax transparent funds.

For regulation, the strategy paper states that the FSA has agreed to actively engage with the fund management industry to streamline and improve the efficiency of the fund authorization process.

Finally, on marketing strategy, the U.K. government has stated that it will introduce a one-stop shop service for fund managers wishing to set up in the UK, through collaboration with TheCityUK and the Investment Management Association.

SFO Press Release on Manipulation of LIBOR

On July 2, the Serious Fraud Office (SFO) published a press release regarding the manipulation of the setting of the London Interbank Offered Rate (LIBOR). Press release.

In the press release, the SFO stated that it had been working closely with the FSA and now that the FSA has concluded its investigation into the regulatory misbehaviour, the SFO is considering whether it is both appropriate and possible to bring criminal prosecutions.

The SFO hopes to come to a conclusion regarding possible criminal prosecutions within a month. It is also working with the relevant authorities that are carrying out equivalent investigations in other jurisdictions.

On July 2, a statement made by George Osborne, Chancellor of the Exchequer on LIBOR and related reforms concerning the banking sector was also published. This included an initiative to establish a joint committee to conduct an inquiry into professional standards in the banking industry. Statement.

European Commission President Calls for Banking Union

José Manuel Barroso, president of the European Commission, commented in an interview with the FT this week that all 27 EU countries should submit their big banks to a single cross-border supervisor as part of a banking union. He said that the EU needs to take “a very big step” towards deeper integration if it is to learn lessons from the sovereign debt crisis. Mr Barroso thought that the changes, which would also include an EU-wide deposit guarantee scheme and a rescue fund paid for by levies on financial institutions, could be achieved in 2013 without changes to existing treaties.

The UK chancellor, George Osborne does not want Britain to be part of any banking union which would make taxpayers liable for recapitalising eurozone banks. However, he thinks that the union is desirable, so long as Britain is not obliged to take part. Mr. Barroso considered that it would be right to allow Britain to opt out of the banking union, so long as it did not block the union’s progress.

The Commission published a memorandum on the proposed banking union on 6 June 2012. Memorandum on banking union.