Gibraltar is set to overhaul its fund industry by scrapping rules that limit the scope of investment vehicles.
The state is hoping to up the ante and ensure its funds can compete with other international players – such as Ireland and Luxembourg.
Under current rules, the administrator of a fund must be based in the same country as the investment vehicle itself. However, ministers believe this archaic stipulation is damaging the industry and curbing investment – particularly as Gibraltar is vying to become a gateway for investment.
The country's financial services minister Gilbert Licudi hopes the location rule will be scrapped in the coming weeks. It is expected to be replaced by a system that will require funds and their administrators to be authorised, reports Reuters.
"It will permit funds to be established in Gibraltar even if the administrator is not in Gibraltar," Mr Licudi told reporters.
However, he added that the move would not bring an end to fund regulation in the country.
"We are not going to open the door to anyone. We need to be selective," he added.
Gibraltar hopes that its European location will add to the perception that it is a safe place to invest.
However, Europe's fund market has performed relatively poorly in recent times.
New figures released by the European Fund and Asset Management Association show that the final quarter of 2011 witnessed a contraction in investment in fund assets on the continent. Investments fell by 2.8 per cent – or by EUR 7,920 billion.
Cross border fund investment did remain buoyant during the same period though, with both Ireland and Luxembourg managing to increase their market shares – something that Gibraltar will be hoping to do when it ratifies its new fund investment rules.
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