Investment trust cost disclosure rules will once again come under scrutiny in the House of Lords, after Baroness Sharon Bowles’s Listed Investment Companies Bill was chosen to be introduced in today’s (19 July) Private Members’ Bills ballot.
The Private Members Bill is set to be introduced on Thursday 5 September, and will be one of the first to be heard in the new session of the house.
The bill seeks to address issues with the classification of investment trusts under current cost disclosure rules.
See also: Calls for judicial review into FCA as investment trust sector faces extinction
The trust sector has previously highlighted problems with the application of Alternative Investment Fund Managers Directive (AIFMD), under which investment companies are required to disclose charges in the same way that unit trusts are, leading to a misleading representation of costs for closed-ended funds.
A similar Private Members Bill, introduced by Baroness Ros Altmann in November 2023, had previously passed through three readings in the House of Lords earlier this year. The legislation would have seen investment trusts removed from AIFMD designation.
However, it was scrapped due to the general election being called before the bill could be debated in the House of Commons.
Earlier this month (8 July), Association of Investment Companies’ (AIC) chief executive Richard Stone called on the government to rapidly resolve the issue, saying that dealing swiftly with the issue could be an early win for the new administration.
