A raft of legal reforms planned for next year, which are aimed at simplifying Europe's complicated, multi-national marketplace for investment funds, may not work as well as hoped because they don't take tax issues into account.

The European Fund and Asset Management Association, which represents investment firms across Europe with a total €11 trillion under management, yesterday published a tax report on the new reforms. These reforms, known as UCITS IV, are due to be brought in by member-states in July 2011.