Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the delay of the Overseas Funds Regime on the UK's attractiveness to overseas asset managers; and what steps they are taking to mitigate any negative effects.

The UK’s world-leading asset management sector is the second largest by assets under management, 48% of which are managed on behalf of overseas investors.

The Overseas Funds Regime was legislated for in the Financial Services Act 2021, to create a more streamlined process for overseas investment funds to be sold to UK investors.

On 30^th January, the Economic Secretary to the Treasury announced that the Government had found the states in the European Economic Area, including the EU member states, equivalent under the Overseas Funds Regime, in respect of certain retail funds. This followed a detailed assessment of the states’ regulatory regimes.

HM Treasury and the Financial Conduct Authority (FCA) jointly published a roadmap to equivalence on the 1^st of May setting out the key milestones to implement this decision.

Alongside this, the FCA published detailed guidance setting out that funds in scope of the OFR – but without temporary marketing access – will be able to apply to the FCA for recognition from September 2024. The FCA intends to invite funds with temporary marketing access to apply for recognition in tranches between October 2024 and September 2026.