The investment company cost disclosure campaign group is urging industry participants to express their views on a regulatory consultation before the deadline this afternoon.
The group has published a response at costdisclosure.co.uk and is inviting people to co-sign or add an impact statement before the close of business on 19 March 2025.
The Financial Conduct Authority (FCA)’s consultation concerns the UK’s new Consumer Composite Investments (CCI) rules, which are set to replace the European Union’s regulations for packaged retail investment products (PRIIPs).
The FCA is trying to enable investors to compare trusts with other investment vehicles. However, the campaign group is arguing for investment companies to be excluded from CCI rules because they are significantly different to the other products within the proposed framework, both in the way they operate and how they are governed and regulated.
“We do not believe it is feasible to have a coherent and workable framework that operates across such a disparate range of investment vehicles,” the response document reads.
“We have seen hugely damaging impacts from well-meaning regulations purporting to protect consumers, but which ultimately mislead and damage investor interests. These companies are already significantly regulated. The proposed new regime fails to recognise the unique characteristics and benefits of the sector for long-term investors.”
The main point of contention is around ongoing costs, which open-ended funds must disclose. As there are no ongoing costs associated with owning shares in a closed-ended vehicle, there is no ‘cost’ or ‘expense’ to pull through, the campaign group argues.
“The current proposals are not just damaging to [investment companies] as a whole, they are also damaging and prejudicial to self-directed retail investors and the active management industry, which will be placed at yet another competitive disadvantage vis-à-vis passive structures. It also appears to be against government policy,” the response document states.