New CCI rules “victory for common sense”

The AIC has responded to the FCA’s final rules on retail disclosures, ‘Supporting informed decision making: Final rules for Consumer Composite Investments’ (PS25/20).

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “This is a victory for common sense. The FCA has recognised the unique characteristics of investment companies. It’s excellent news for investment companies, their shareholders and consumers.

“We particularly welcome the FCA’s decision not to require other funds to pull through the costs of investment companies when investing in them. This removes a cloud that’s been hanging over the industry and returns the market to a pre-2021 ongoing charge figure that everyone used and understood. It’s particularly helpful for fund of funds managers whose products were made to look artificially expensive under the PRIIPs rules.

“Investment companies have a huge amount to offer to all investors but investment from fund of fund investors, wealth managers and others has been impacted by the current cost disclosure requirements. Bringing an end to the double counting, recognising that investors’ returns are based on the share price and acknowledging the unique characteristics of the sector are all to be welcomed.

“The FCA has also confirmed that the costs of gearing and maintaining real assets will not be included in the ongoing charge, making investment companies’ headline cost disclosures more useful for investors. It’s good to see that investment companies will have the same implementation timetable as other funds and flexibility to adopt the rules earlier.

“The whole industry has pulled together to get this outcome and we’d like to thank everyone who has campaigned so tirelessly to get these disclosures right for consumers.

“It’s essential that we build an investment culture in the UK. In addition to the improved consumer disclosures, the FCA’s discussion paper on expanding consumer access to investments, also published today, shows their willingness to play a positive role.”

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