AMIT legislation hailed
Australian fund managers will become more competitive internationally as a result of the passage of legislation through the Senate today.
The Senate passed the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015, aimed at allowing Australian investors greater access to Asian markets and fund managers to be more internationally competitive, but one fund manager said it was not enough.
The Bill has paved the way for the introduction of Attribution Managed Investment Trusts (AMITs), which could lead Australia "to be recognised as a centre for investment product development and management", Equity Trustees, executive general manager corporate trustees services, Harvey Kalman said.
Although Kalman said it was a significant step in increasing Australian funds global competitiveness, "more needed to be done... as Australia has been uncompetitive for a long time."
The AMIT regime would be mandated from 1 July 2016, "however AMITs have been able to elect to transition into the new tax regime from 1 July 2015", Kalman said.
It followed last weeks' news that the Asian funds passport would come into effect at the end of 2017.
Kalman said, these initiatives were "without question, positive", but Australia wasn't on par with the rest of the world, and we needed to be. He called on the Government to introduce a new regulatory cap on capital, so when fund managers start a fund, "there is a cap of say US$20 millon", the same as the proposed APEC passport.
Luxemburg's cap stands at 10 million euros, Dublin's was 300,000 euros and we needed one to be able to compete he said.
"ASIC had been ignoring that there was no there no regulatory cap on responsible entities for issuing products into the Australian marketplace. If we had one, Australian product issuers and fund managers would become more successful and competitive", said Kalman.
He used the analogy "If I'm more successful, I don't have to hold more capital, which means I am more profitable, which means I can pass on benefits to investors, they pay less fees, I pay more tax and could create more jobs for the economy".
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