Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she is considering steps to incentivise domicile Exchange Traded Funds in the UK if they have a significant corporate footprint in country.

The UK is home to the world’s second largest investment management sector, with over £10.9 trillion of assets under management (11% of global assets). The UK has historic expertise in portfolio management, a crucial part of the Financial Services ecosystem. The UK Government is committed to supporting this important sector and in the recently published Financial Services Growth and Competitiveness Strategy committed to be one of the most competitive places globally to manage investments.

Exchange Traded Funds (ETFs) are often domiciled outside of the UK for a range of reasons including marketing access, and existing pockets of administrative expertise. However, many of these funds are still managed here - 49% of all assets managed in the UK are managed on behalf of overseas clients.

The Government has undertaken a wealth of work to enhance the UK’s fund domicile offering, including as part of the recent review of the UK funds regime. This has led to the introduction of new UK fund structures focused on enhancing real-economy investment including the Reserved Investor Fund, the Long-Term Asset Fund and Qualifying Asset Holding Companies.