InvestmentsSep 16 2014

Groups could divide funds should Scotland vote ‘Yes’

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Scotland-based fund managers could split their funds in two should Scotland vote to become independent from the UK.

A potential concern for companies based in Scotland, should the country go independent, would be how they would continue to service clients on either side of the border.

One major Scottish fund group, which did not want to be identified, said it would “not be very complicated” to subdivide a fund to enable English customers to invest in a separate version domiciled in their home country.

“We are very used to dealing with clients in different countries so it is something we think we could solve,” a senior source at the group said.

He added that the situation for investment trusts added complexities because the boards of investment trusts may choose to re-domicile trusts to the UK.

However, it is likely Scottish firms would still be able to continue managing any trusts from an independent Scotland if their boards decided to award them the management contracts. The shares would also remain on the London Stock Exchange immediately after the referendum and continue to be listed there in the future.

David Parkinson, of the chartered accountants HW Fisher & Company, said England and Scotland were already separate jurisdictions as far as company registrations were concerned.

“So a Scottish company has to jump through more hoops if it wants to move its registered office from Edinburgh to East Anglia rather than East Kilbride,” he said.

“The process need not be especially expensive or onerous – but don’t expect it to be quick.”