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Press Release

For immediate release: Thursday 4 November 2004


IMA has issued a consultation paper to its members reviewing the way in which UK authorised investment funds are governed. 

The paper has been drawn up by a working party led by IMA chairman Lindsay Tomlinson of Barclays Global Investors. The review, which was set up in the wake of the market timing scandal in the US, among other developments, set out to consider whether the existing structures for overseeing managers and protecting the interests of investors are still fit for purpose.

The review concluded that the existing structure of oversight by a trustee (in the case of unit trusts) or depositary (in the case of open ended investment companies) had served the interests of investors well over the years and did not require fundamental change. But it made over 20 recommendations for improvement covering the following areas:

  • Improving transparency and disclosure, in areas such as transaction costs, calculation of total expense ratios, box management and revenue sharing.
  • Reforming the relationship between managers and trustees to ensure that the reasons behind any decisions to change trustees are explained and capable of scrutiny by investors and the regulator.
  • Improved procedures for identifying and monitoring potential conflicts of interest.
  • Extending the scope of trustee/depositary oversight to reinforce these recommendations.

Richard Saunders, Chief Executive, IMA commented:

"With this initiative, we are aiming to assure investors that saving through investment funds brings them a structure that looks after their interests and lets them see how their money is being put to work. While we have concluded that there is no fundamental change needed to the existing structure, the world has in many respects moved on in the last few years and these recommendations amount to a significant package of reforms.  We look forward to hearing views on these proposals."

Attachment - Draft Consultation Paper


For further information, please contact:
Richard Saunders, Chief Executive, IMA, 020 7831 0898
Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Out of hours contact:
Despina Constantinides, Partner, Polhill Communications, 07801 337 677

Investment management association