Ireland - development of a mutual fund industry dates effectively from the establishment of the IFSC – the International Financial Services Centre -under legislation passed in the late 1980s as one of a number of measures to stimulate growth and employment in an otherwise poorly performing economy and capitalising on the EU’s UCITS Directive. The significant majority of funds established in Ireland are open-ended investment companies, usually listed on the Dublin Stock Exchange, designed for marketing throughout Europe. Under the Irish UCITS Regulations 1989, the Central Bank of Ireland was made responsible for authorising and supervising investment and insurance intermediaries but the Central Bank and Financial Services Authority of Ireland Act 2003 established on 1 May 2003 a single regulatory framework for the financial services industry and created the Irish Financial Services Regulatory Authority (IFSRA), with its own board and chief executive reporting directly to the Minister for Finance. Other relevant legislation includes the Unit Trust Act 1990, the Companies Acts 1963 to 1999, the Investment Limited Partnership Act 1994 and the Investment Intermediaries Act 1995.
France- the most important piece of legislation governing French mutual funds is its Law of 23 December 1988, an Act governing collective investment schemes, actually enacted by decree in September 1989. It replaced two 1979 Acts, which governed SICAV and FCP structures separately, with a single set of regulations, and implemented the 1985 UCITS Directive. Detailed regulations are set out in Application Decrees and Orders dated December 1998 and any points concerning SICAVs not covered in these laws are governed by general legislation, in particular the basic company law dated 24 July 1966. Read the rest of this entry »
Japan – funds analogous to investment trusts existed in Japan in 1937 in the form of investors’ associations, which, like the UK’s Foreign & Colonial Company’s original investment trust, faced challenges of legality and were dissolved in 1940, to be replaced in 1941 by undertakings that, modelled on the UK’s unit trust, found legal support. Post-war confusion led to these funds becoming closed to new investment in August 1945 and final dissolution in February 1950. Read the rest of this entry »
The policy of most jurisdictions is to treat the mutual fund as a company subject to corporate or income tax only on its ordinary business (i.e. net income arising from holding investments), and exempt it from taxation on its gains from buying and selling investments. In the US, provided the gains and net income are distributed, the fund does not pay federal income tax on either. Taxes are the responsibility of and paid by the shareholders under a ‘pass-through’ arrangement, whether they choose to receive cash or reinvest their entitlement. Read the rest of this entry »
