SFE raises concerns over funds directive

Published on Thursday 13 May 2010 20:15

SCOTTISH Financial Enterprise (SFE) yesterday threw its weight behind calls for the European Commission to tear up controversial new regulations.

The trade body demanded European Union commissioner Michel Barnier rewrite the alternative fund management (AIFM) directive, which was introduced last month to control hedge, private equity, property and infrastructure funds.

The draft directive will reach a critical stage next week as it is discussed in the European Parliament and European Council.

SFE has written to the new UK government, asking it to exert pressure at next week's meetings. Richard Saunders, chief executive of the Investment Management Association, has also written to the Chancellor, George Osborne.

As the directive stands, SFE said it would be particularly damaging to the investment trust sector, a long-standing part of Scotland's financial services industry. SFE chief executive Owen Kelly said: "We are particularly concerned to ensure that, as the directive moves towards finalisation, the text reflects the needs of investors and does not inadvertently cause long-term consumer detriment or confusion.

"Next week's meetings are critical. We hope that the new UK government will do all it can to support the industry's position and to call for change."

His comments came after the British Venture Capital Association attacked the directive in our sister paper Scotland on Sunday, warning it would "strangle" investment in new companies and would introduce "crippling" disclosure requirements.

&#149 The Institute of Chartered Accountants of Scotland has written to the Chancellor calling for the merger of income tax and national insurance to ease administration. Icas has also urged the UK government to make the tax system more competitive, so that companies are encouraged to keep their head offices and operations in the UK.