The Financial Conduct Authority has confirmed that investment trusts are exempt from showing key information documents (KIDs) with misleading cost figures but said fund managers, wealth managers and platforms must consider providing other more relevant information to investors.

In a statement on ‘forbearance’ from disclosure requirements, the financial regulator said that trusts could immediately scrap the requirements of the overhanging EU legislation, Priips and Mifid, without penalty, given their negative impact on the sector.

‘We confirm that we will not take supervisory or enforcement action if a fund chooses not to follow those requirements,’ it said.

However, the FCA noted that across the distribution chain, firms must comply with other relevant rules and regulations, including consumer duty, intended to protect retail investors from poor value for money and deliver good outcomes.  

Where firms choose not to provide a KID, they may consider whether any additional product information is needed to support retail investors, in line with requirements to equip consumers with the information to make effective, timely and properly informed decisions, the Financial Conduct Authority said.

The government is due to lay formal legislation for a new consumer composite investments (CCI) framework in the first half of 2025.

‘The proposed new regime is intended to better cater for a variety of products and investment vehicles, including closed-ended UK-listed investment funds, while still ensuring consumers receive appropriate information to allow them to make informed choices about CCI investment opportunities,’ the FCA said.

Some of the Disclose: Don’t Double Count campaigners who brought the misleading disclosure rules to national attention are pushing for the adoption of a Statement of Operating Expenses (SOE) to show the recurring costs that are already deducted from investment trust valuations.

Since the government scrapped the cost disclosure rules last month, the average discount in the investment trust sector, excluding 3i Group (III ), has barely moved, widening slightly from 13.4% to 13.8%, according to broker Winterflood.