Tax could hinder international Ucits business, says Alfi

Businessman_hurdleThe Financial Transaction Tax (FTT) could curtail the distribution of Ucits outside Europe and significantly reduce the assets of European funds, the Association of the Luxembourg Fund Industry (Alfi) warned. Financial institutions will try to reduce the impact of the tax – which is designed to raise revenue and curb speculation on securities - with a wide scale relocation of trading activities and/or the passing on of the costs to end-consumers, including individual savers and those participating in pension plans. The impact on the funds industry would be significant, Alfi says, not just because the proposed headline rates are high, but also because the proposal gives rise to multiple taxation at the level of the fund, its portfolio and its investors. Supporters say the tax would benefit economies, but Marc Saluzzi, chairman of Alfi, says this is doubtful. “The benefit to the economy or to society is doubtful if it requires people to save a larger part of their earnings, retire at a later age and receive a significantly reduced pension in retirement for absolutely no tangible fiscal uplift.” Saluzzi made the comments yesterday when Alfi put out its annual review. The review showed that the Luxembourg funds industry had continued to expand over the last 12 months despite the eurozone crisis and declines in major stock indices. The number of funds in Luxembourg rose by 4.84% to 3,833 and net sales amounted to €16.998bn.  While total assets under management decreased over the period by €101.453bn, mainly as a result of market depreciation, total assets under management were still a steady €2,059.419bn, second globally only to the US. The increase in net sales and funds enabled the Luxembourg fund industry to continue to maintain and create employment in 2011. The Luxembourg financial centre has over 43,000 employees working directly for Luxembourg financial sector companies and many more working for non-financial companies that provide goods and services to the financial centre. ©2012 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.