The Association of Investment Companies (AIC) has urged the Treasury to announce its decision on whether investment trusts should be treated as Consumer Composite Investments (CCIs).
The association has lobbied for trusts to be removed from the CCI regime, arguing it is the quickest way to resolve the issue of cost disclosure for investment companies.
Last week, The House of Lords Financial Services Regulation Committee criticised the FCA’s application of retained EU regulation requiring investment trusts to report their costs in the same format as open-ended funds.
According to the committee, current disclosure requirements fail to recognise the role of listed company shares as the value of the financial instrument invested in, and indeed the mechanism creating investment permanence.
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“It’s clear that the issues around investment company cost disclosure are harming the industry and putting off existing and potential investors,” said Richard Stone (pictured), AIC chief executive.
“The Treasury has the power to resolve these issues by removing investment companies from the scope of regulated cost disclosure – returning to the position that we had before January 2018 when EU-derived legislation such as MiFID II and PRIIPs was introduced.”
He added: “Delaying this decision is damaging market confidence. Investors are receiving misleading information which may stop them buying shares which can deliver strong long-term performance.
“The current rules are hamstringing demand for the investment company sector which is a global leader, with the capacity to mobilise capital for UK infrastructure, renewable energy and businesses. We call on the Treasury to announce its decision urgently so we can move to the next step in the process of resolving the issues with cost disclosure.”
