Funds industry retains hope of level playing field

The Queen is to make a speech in parliament today, announcing the prime minister’s legislative programme after his general election win last week.

Mr Johnson’s Brexit withdrawal deal to ensure the UK leaves the European Union by 31 January 2020 is expected to be one of the central features of the Queen’s Speech, along with a number of Tory general election pledges.

But there is speculation that many of the proposed bills set out in October’s Queen’s Speech will be carried forward – and Guernsey’s financial sector will be hoping that a previously mooted financial services bill could return.

The UK Government said at the time that this financial services bill was designed to ensure the UK maintained its world-leading regulatory standards and remained open to international markets after the country leaves the EU.

In particular, the UK Government said the main elements of the bill included ‘simplifying the process which allows overseas investment funds to be sold in the UK. This will maintain our position as a centre of asset management and provide more choice to UK consumers, in line with commitments made during our preparations for leaving the EU’.

Crucially, this simplified process would have been made available to investment funds in the Crown Dependencies.

The government also talked of the bill ‘delivering our commitment for long-term market access to the UK for financial services firms in Gibraltar as part of the UK family’. This related to the UK and Gibraltar having reciprocal market access for financial services.

William Mason, director-general of the Guernsey Financial Services Commission, said the proposed bill in October’s Queen’s Speech had been welcome.

‘We were certainly very happy to see that. It’s something which we’ve been discussing for a couple of years now with the British authorities.

‘Because at the moment, I think it’s fair to say that because Guernsey is outside the European Economic Area its funds are materially disadvantaged in terms of their access to UK market vis-a-vis Luxembourg funds, which are clearly within the European Economic Area.

‘That bill would have given us, if not entirely a level playing field after the end of 2020, when the UK will leave most of the EU structures under the terms of Mr Johnson’s Brexit deal, it will certainly level the playing field markedly.’

He added: ‘I certainly hope that the next government would bring that bill back – and that could be very positive for the Guernsey funds sector.’

Transparency campaigner Labour MP Dame Margaret Hodge has written to Mr Johnson urging him to bring the Registration of Overseas Entities Bill forward in the Queen’s Speech.

‘This is “oven ready” legislation that creates a register of all foreign companies that own UK properties,’ she said.

‘London has sadly become the location of choice for the world’s crooks and kleptocrats to launder their ill-gotten gains. The UK property market is a key part of this dirty money problem.

‘The Registration of Overseas Entities Bill would be a crucial tool in the fight against money laundering.

‘It is high time that Boris Johnson demonstrates the “One Nation” credentials of his Government and includes this bill in the Queen’s Speech.’