The CCI Consultation has now closed.
Thank you to those who signed this document or prepared a statement for this important response to the FCA’s CCI Consultation CP24/30
A copy of the final submission can be found below, and the more detailed submission can be found here.
A detailed analysis of the industry's response to the CCI consultation by Eve Maddock-Jones in Investment Week can be found here.
Costs should be disclosed to all investors, clearly, simply and accurately. And they should be counted once.
Closed Ended Investment Companies, including Investment Trusts and REITs, make deductions for company expenses which are included in the calculation of the Net Asset Value (NAV).
Investors buy shares in these companies from which no deductions of any kind are made. Their share prices are linked to, but move independently of, the NAV
The UK is alone in requiring these companies to present these expenses to investors as if they are charged twice.
This campaign calls for clear disclosure of company expenses, once only.
In December 2024, the FCA published their Consultation Paper (CP24/30) entitled ‘A new product information framework for Consumer Composite Investments’ (CCI). In the meantime, Baroness Bowles Private Members’s Bill, ‘Listed Investment Companies (Classification etc) Bill, continues it’s progress and having cleared the Lords has first Reading in the House of Commons on Friday 17th January 2025. The FCA are seeking feedback to the CCI consultation by 20th March 2025.
Submissions are encouraged online here or by post to: Consumer Investments, Distribution Policy, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN and by email to: cp24-30@fca.org.uk
Commenting on recent announcements by HM Treasury and the FCA, Baroness Bowles made the following observations. You can view the FCA statement here and HM Treasury here.
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."
Baroness Bowles discusses the Listed Investment Companies (Classification etc) Bill
Baroness Bowles and William MacLeod discuss the Private Members’ Bill intended to resolve the issue of ‘cost disclosure’ in the UK.
Cost disclosure is vital for investors so they know exactly how much they are paying for an investment.
However, it is imperative that cost disclosure is correct and not misleading.
A group of MPs and investment industry participants have been campaigning for the double-counting of Investment Company costs to be stopped.