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Prospectus changes to give investment companies greater flexibility to issues shares

4 April 2017

Ian Sayers, Chief Executive of the AIC, comments.

The Association of Investment Companies (AIC) has confirmed that the maximum threshold of new shares, which investment companies can issue before publishing a prospectus, will increase from 10% to 20% this summer.  This means investment companies will have greater flexibility to issue more shares without incurring the cost of preparing a prospectus.  

Currently, listed companies are required to prepare a prospectus when issuing shares representing more than 10% of the number of existing shares measured over the last 12 months.  This threshold will increase to 20% this summer, potentially as early as May or June.

Ian Sayers, Chief Executive of the Association of Investment Companies said: “This should give investment companies more scope to grow cost-effectively, helping to increase liquidity and to spread costs.  We also welcome the swift introduction of this change, which will allow investment companies to make the most of this opportunity from this summer. It’s important to emphasise that, as before, shareholder approval will still be required.”

-Ends-

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Notes

  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed ended investment companies, incorporating investment trusts and other closed ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help Members add value for shareholders over the longer term. The AIC has 345 members and the industry has total assets of approximately £163 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.

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