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The Alternative
Investment Management Association (AIMA) has called on the FSA to
reconsider some of its proposals to allow retail investors simplified
access to alternative investments through Funds of Alternative Investments
Funds (FAIFs).
The association believes that the FSA should take another look at
the restrictions it is proposing for notice periods and leverage,
as it says these are unworkable in their current context of funds
of alternative funds.
AIMA claims to have identified potential difficulties in the areas
of illiquid instruments, repayment standards and liability of the
manager in master/feeder fund structures, and says that the combined
effect of these restrictions will cause managers of FAIFs unnecessary
difficulty and will restrict FAIFs from being a popular form of
investment.
In a separate response to tax framework proposals by HM Treasury,
which would allow FAIFs to operate within its existing regulatory
regime, AIMA accepts the position that these proposals represent
a “simple solution” to remove tax as a barrier to the
commercial development of FAIFs, pending finalisation of the new
offshore funds tax regime.
However, AIMA sees discrepancies within the current tax regime proposals
relating to the treatment of investment returns as capital gains
or income, and says it is vital that the tax regimes covering FAIFs
and offshore funds are consistent and compatible.
Andrew Baker, deputy CEO of AIMA, commented: “In AIMA’s
opinion, there remain important areas to be refined before the regime
is likely to be workable and successful for both the industry and
the intended retail investors. However, we are confident that considerable
progress towards a successful outcome is being made, and we will
continue to support the FSA in this process.”
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Pensions Age June 2008
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