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34/01                                                                                                 

15 March 2001

REMOVING BARRIERS TO INVESTMENT BY PENSION FUNDS

Trustees of occupational pension schemes will benefit from the removal of a barrier to investment in venture capital later this year, Economic Secretary Melanie Johnson announced today.

The measure implements one of Paul Myners? recommendations, as part of his review of institutional investment in the UK, to reform the law on investment in limited partnerships whose purpose is to undertake investments in private equity.

Miss Johnson said :

?This is a change which will be welcomed by the occupational pensions industry. It is a significant and useful measure that will make it easier for pension funds to consider investment in private equity. 

?It is fully in line with the Government objective of encouraging greater investment in private equity as part of the drive to increasing UK productivity.?

The change will be implemented at the same time as other key provisions of the Financial Services and Markets Act 2000 (FSMA).

Miss Johnson also announced today that the target date for the commencement of these provisions, known as N2, will be no later than the end of November 2001. The actual date will be confirmed as soon as it is possible to do so.


NOTES TO EDITORS

  1. Miss Johnson's announcement on the reforms affecting occupational fund trustees was made during the House of Commons debate on the Regulated Activities Order, Exemption Order and By Way of Business Order laid on 27 February (Treasury press release 33/01).
  2. Mr Myners? recommendation was announced at the time of the Chancellor's Pre-Budget Report on 8 November 2000 (PBR press release HM Treasury 2).

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