Cost Disclosure

Commenting on today’s announcement by both HM Treasury and the FCA, Baroness Bowles has issued the following statement:

Government signals breakthrough for UK-Listed investment companies

The news today that the government and FCA have applied forbearance to bring accuracy to reporting for UK-listed investment companies is a tremendous breakthrough for the sector and investors.

After nearly two and a half years of pain (and nearly seven years for wealth managers) it is both welcome and long overdue. To put things in a money context, the amount of investment lost to the Listed Investment Company sector is now around £30bn – so we are in the order of magnitude of the £22bn that is so exercising the Chancellor – ie this has been a disaster of national scale.

Our goal throughout has been to deliver accurate and transparent reporting so that investors can make informed decisions. The changes are unlikely to happen overnight - the European MiFID Template (EMT) is generally updated monthly, so it will probably take until November to wash through assuming that the FCA forbearance is universally taken up. Thereafter, investors can be confident in the knowledge that published costs that they pay will be accurate.

The Government and FCA announcement today will achieve the outcome I am seeking with the Private Members’ Bill, and I await the legislation that the Government mentions to see how that measures up. I welcome the opportunity to engage with HM Treasury and the FCA to ensure that reporting in the future is clear and fair and ensures that it is appropriate for all investors. I welcome the opportunity to work with HM Treasury officials on the future requirements for Listed Investment Companies and investors ensuring we achieve accuracy and transparency.

The FCA consultation process for Consumer Composite Investments, which takes over from the EU PRIIPS legislation, will require all in the industry to study the proposals carefully. This could not have got to this stage had not there been a huge amount of work from many both within industry and more recently consumer-oriented bodies. Key in this was the record breaking 300 plus signatories on the response to the Government’s PRIIPs consultation and we stand by for the next stage in order to contribute to a permanent and proper resolution in 2025.

Baroness Ros Altmann added: "I am delighted with today’s news from the Treasury and FCA. Common sense prevails, although it has taken too long to reach this point. 

"In the glow of this success, we must remain focussed on the future and respond constructively to the FCA’s consultation when it is announced. 

"My Private Members’ Bill, which was cancelled at the General Election, would have delivered the results we are seeking namely clarity, transparency and fairness for all investors, including pension funds who have been no less confused by this ongoing muddle."