Brexit should allow the UK to set its own rules for funds and asset management services, the AIC says.

Theresa May has been urged by The Association of Investment Companies to secure consumer, competitive and regulatory benefits after the UK’s exit from the EU by taking a layered approach to funds regulation.

The AIC released a statement today, which read: “Many EU laws will be carried over following the UK’s departure from the EU to ensure regulatory stability and consumer protection. However, once the transition has been achieved, the Government should avoid a ‘one size fits all’ rulebook for the funds industry.

“Brexit should allow the UK to set its own rules for funds and asset management services provided solely to UK or non-EU customers, which make up 80% of the UK’s asset management activity. Adopting the AIC’s recommendation would allow firms that choose to provide products or services to EU clients to opt in to EU regulations as necessary.”

Ian Sayers, AIC chief executive, said: “Brexit should allow UK policymakers to deliver better targeted and more proportionate regulation. Ultimately this will mean lower costs and greater competition for the funds sector: a ‘Brexit dividend’ delivering long-term consumer benefits.

“If the Government takes this approach they will be able to maintain investor protection standards while also taking steps to maximise the competitiveness of the funds sector. As well as benefiting investors this will support the long-term future of UK fund management and its capacity to create jobs, invest in UK business and contribute to tax revenues.”

He said: “At the moment UK funds are subject to EU obligations whether or not they are marketing into other Member States. This is particularly unfortunate for the closed-ended investment company sector which is 95% held by UK shareholders but is burdened by rules designed to govern cross-border marketing within the EU.”

The AIC said potential benefits of putting UK policymakers in charge of standards for UK consumers are demonstrated by the delay over the PRIIPs rules.

These will require all funds sold to retail investors to have a Key Information Document. The introduction has been delayed because EU policymakers have failed to agree what they should include. This is due to the difficulties of achieving a common disclosure for products sold in 28 countries.

The UK authorities, focused solely on the needs of UK consumers, could act faster to determine what disclosures are needed and introduce them in a way which both delivers a consumer benefit and meets the needs of the funds industry, according to the AIC.