BlackRock has appointed BNY Mellon to provide custody, fund administration and trustee services for the UK’s first Tax Transparent Fund (TTF).
The BlackRock ACS US Equity Tracker Fund will initially be offered to those UK pension fund clients of BlackRock that are investing in US equities, with the expectation that this will be extended to other asset classes in the future.
The new mandate expands BNY Mellon’s existing relationship with BlackRock, which already encompasses custody, fund accounting and trustee services for a range of the investment manager’s UK and offshore funds.
Tony Stenning, head of UK retail at BlackRock, says: “Given the ever increasing complexity for today’s investors, delivering simple, transparent, tax efficient solutions has arguably never been more important. The introduction of this new structure by the Treasury last year is an important step in the next generation of tax efficient solutions for UK investors. We also welcome the arrival of a level playing field, bringing the UK in line with other European fund centres.”
Daron Pearce, head of the investment management segment, investment services at BNY Mellon, says: “Our selection by BlackRock to service the UK’s first TTF underlines BNY Mellon’s commitment to supporting our clients as they look to innovate to provide investors with new investment avenues and opportunities.”
The launch of the BlackRock fund follows the introduction of the UK TTF on 1 July 2013, after a period of consultation by the UK government. The UK TTF allows investors to maintain their tax position and access double taxation treaty benefits as if they had invested in the fund’s underlying assets directly, while achieving the administrative, governance and scale benefits of investing via a pooled vehicle.
Equivalent tax-transparent structures are already available in Ireland (the Common Contractual Fund), Luxembourg (FCP or Fonds Commun de Placement) and the Netherlands (FGR or fondsen voor gemene rekening).
