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Making corporate reporting more effective and transparent

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24 June 2020

AIC responds to the Reforming Regulation Initiative.

The Association of Investment Companies (AIC) has responded to the Department for Business, Energy & Industrial Strategy’s Reforming Regulation Initiative.

The AIC has recommended that companies should not have to prepare a prospectus for secondary issues of shares when the shares are in the same class as others already admitted to trading on a regulated market.

The AIC has also recommended that corporate reporting be split into separate components to make it more helpful for shareholders and stakeholders. Under the AIC’s proposals, corporate reports would comprise a Strategic Report, a Historic Report, a Bespoke Report and a Legal and Regulatory Disclosures Document. Detailed information on the AIC’s proposals can be found here.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “Over the past few months, technology has enabled us to live, work and socialise in new ways, highlighting just how much change is possible. But companies share information with the market in a very traditional and conventional way. Corporate reporting has become longer and more detailed but arguably that’s made it harder for investors to understand what’s really important.

“We believe there is scope for a significant review to make corporate reporting fit for the future, particularly in the UK after Brexit. Our proposals will help build confidence in capital markets by helping investors gain a better understanding of the companies they invest in. We look forward to working with the Department to see how these considerations can be addressed.”

The AIC’s full response to the Reforming Regulation Initiative is available here.

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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. As at the end of May, the AIC had 361 members and the industry had total assets of approximately £197 billion.
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