Proposed limits would undermine innovation and weaken competitiveness
London, UK — MFA urged the UK Department of Business and Trade to avoid imposing broad statutory restrictions on non-compete agreements that apply to highly skilled and highly paid financial services professionals in a comment letter submitted this week. Overly broad restrictions would weaken firms’ ability to protect proprietary investment strategies, dampening innovation, eroding London’s competitiveness, and driving capital and talent to rival financial centres.
“The alternative asset management industry does not use non-compete agreements to suppress wages or limit competition,” said Jillien Flores, MFA Chief Advocacy Officer. “It uses non-competes to protect innovation and intellectual property that support pension funds and strengthen the UK’s economic growth and competitiveness. Imposing broad statutory limits would weaken London’s position as a global financial centre and drive investment and high-skilled jobs to other jurisdictions.”
The letter outlines targeted recommendations that will protect innovation, preserve employee mobility, and support the UK’s growth agenda. Specifically, MFA recommends that the Government:
- Preserve the UK’s existing case-by-case legal framework rather than adopt one-size-fits-all statutory caps.
- Permit longer-duration non-compete agreements for highly compensated professionals who negotiate their employment terms.
- Exclude gardening leave and compensated forfeiture-for-competition arrangements from the definition of “non-compete.”
- Exclude partnership, shareholder, and equity incentive agreements from any expanded policy scope.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
