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FCA reconfirms investment company shares are not automatically complex

4 July 2017

The AIC welcomes the FCA’s recent announcement about MiFID II.

The Financial Conduct Authority (FCA) today reconfirmed that investment company shares should not be automatically ‘complex’ for the purposes of MiFID II.  This welcome development was confirmed in the FCA’s document, Markets in Financial Instruments Directive II Implementation – Policy Statement II.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: “We very much welcome the FCA’s announcement.  This is positive news for investment company investors who will be able to buy investment companies as they do today, without unnecessary obstacles being put in their way. This provides much needed certainty as we approach implementation in early 2018.”

This FCA statement confirms that investment company shares should not be treated as automatically complex, which is incorrect legally and in principle. Investment company shares should be tested against the common criteria which will mean that virtually all investment company shares will continue to be non-complex.

MiFID II requires firms distributing ‘complex’ products without advice to assess the ‘knowledge and understanding’ of retail investors before allowing them to buy and sell them.  The ordinary shares of investment companies are not considered complex, thereby avoiding any such assessment.

Previously it had been suggested that the shares of investment companies traded on regulated markets should be treated as automatically complex. The AIC did not agree with this view, considering it wrong on both legal and policy grounds.  Designating investment company shares as automatically complex risked disrupting the market and placing investment companies at a disadvantage to competing investment products.


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  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 349 members and the industry has total assets of approximately £168 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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