FCA should “waste no time” in launching consultation on investment company cost disclosures
Statutory instruments passing powers to the FCA come into force today.
The Financial Conduct Authority (FCA) has today gained the powers to reform retail cost disclosures – paving the way for the long-running investment company cost disclosure issue to be resolved. The statutory instruments come into force today and can be viewed on legislation.gov.uk (see Notes to editors for links).
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “Time is of the essence. Now the FCA has the powers to fix the damaging problem of investment company cost disclosures, it should waste no time in launching its consultation.
“We will be pushing for a reformed disclosure regime that will help investors make better decisions, while ensuring that investment companies are fairly presented and can compete on their merits. It’s essential that investors understand they do not pay additional charges for the operation of the company. Where there are expenses, they are paid by the company and reflected in the share price.
“The new approach must also end aggregated cost disclosures which bundle together different layers of costs and get in the way of consumer understanding. These disclosures have deterred wealth managers and fund-of-fund managers from investing in investment companies, which has skewed the market and restricted investment into UK infrastructure, private companies and the transition to net zero.”
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Notes to editors
- See The Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024 and The Consumer Composite Investments (Designated Activities) Regulations 2024.
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 319 members and the industry has total assets of approximately £269 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
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