The use of Cookies
on the IMA website

Like most websites the IMA uses cookies. By continuing to browse our site you are agreeing to the terms and conditions of our cookie policy.

Member area login

Consumer website

Press Release

For immediate release: Wednesday 16th April 2003


The IMA has published its response to FSA Consultation Paper 164 on proposed changes to the listing and conduct of business rules for investment companies and investment trusts.

Overall IMA supports the approach being adopted by the FSA in dealing with any changes believed to be necessary by altering the Listing Rules, and believes that the recommendations will be a step in restoring investor confidence in both investment companies and investment trusts as well as the wider savings vehicle market.

However, in its response to the FSA the trade association has raised three concerns over the detail of the proposals.

First, whilst the proposal to limit the amount of an investment trust’s gross assets that can be invested in the shares of other investment trusts should avoid the circular holdings that contributed to the downfall of some of the split capital “fund of funds”, IMA believes that this could also have the unintended consequence of proscribing legitimate investment strategies, for example widening geographic exposure or diversifying risk through funds of funds.

Secondly, IMA is concerned that the FSA proposal for investment companies to disclose portfolio holdings to investors each month, which is aimed at increasing transparency, will lead to a deluge of data but no meaningful information.  A long list of company names is likely to be almost irrelevant to the private investor. 

Thirdly, the IMA has rejected the FSA’s proposal of classifying investment trusts as regulated products.  IMA believes that investment trusts serve a number of different institutional markets as well as the retail market, and as listed companies they have more flexibility than they would if brought within the “Collective Investment Scheme” family.

Julie Patterson, Director of Regulation and Tax at the IMA, said:

“Generally these proposals strike the right balance between restoring public confidence in investment trusts after the “split-cap” debacle, and maintaining the flexibility of these investment vehicles.  But we do not believe the disclosure requirements as currently drafted will provide greater transparency – just more data.”

- Ends -

For further information, please contact:
Julie Patterson, Director of Regulation and Tax, IMA, 020 7831 0898
Jim Irving, Senior Adviser - Regulation, IMA, 020 7831 0898

Notes to Editors:

  1. IMA’s full response is attached.
  2. The IMA is the trade body representing the UK asset management industry, representing some £2 trillion funds under management and over 99% of the UK investment funds industry (Unit Trusts and OEICs).
  3. IMA does not represent the Boards of Directors of investment trusts or those companies themselves.  The Association of Investment Trust Companies (AITC) represents them, and they can be reached on 020 7282 5555.

65 Kingsway London WC2B 6TD 
Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975 
Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.

Investment management association