Given the US asset management industry represents a large slice of the global economy, removing these trusts and ETFs could potentially be problematic.
An AJ Bell spokesperson says: “It depends whether US domiciled funds decide to provide the necessary documentation to comply with the Priips disclosure rules. Those that don’t are likely to be removed from UK platforms.”
However, the spokesperson adds: “The situation is still quite fluid but most fund providers are getting to grips with the new rules. We’d expect the majority of EU domiciled fund providers to provide the necessary disclosure documentation over the next few weeks and hence it is unlikely there will be significant disruption for customers.
“We are working through the process as quickly as we can, engaging with our third-party data provider and with fund managers directly to add the necessary disclosure documents to our platform as soon as possible.”
It’s not all bad
As with anything new, Mifid II and Priips are facing their fair share of teething problems. Although the long-term impact of this on the industry could be challenging, it is still early days.
Dan Brocklebank, director at Orbis Investments, says the firm’s implementation project for Mifid II went to plan without issues. However, he says he wasn’t “surprised to see a few problems being encountered on implementation of such a broad and far-reaching set of regulatory requirements”.
He adds: “We support the overall direction of the regulations, but there was a lot happening at once and they did amount to a significant implementation burden even for us, and we have a relatively simple product offering with two main funds on offer in the UK.
“In general, I would say that most platforms already offer a huge range of funds and share classes which, ultimately, can work against investors’ best interests as the level of choice becomes bamboozling. So, for clients, the reduction in choice is unlikely to be material. How the removed funds end up will presumably depend on the fund managers’ responses first and foremost.”
