AIC sets out proposals to address investment trust cost disclosure concerns

investmentweek.co.uk:

Richard Stone (pictured), chief executive of the Association of Investment Companies

A private members' bill tabled by former pensions minister Ros Altmann, which urged the government to remove investment companies from the Alternative Investment Fund Managers Directive (AIFMD) regulation, was selected in the ballot last week and will have its first reading on 22 November.

Following a debate on the issue at the House of Lords on Monday (13 November), Richard Stone, chief executive of the AIC, said the bill would hopefully «accelerate action on this crucial issue of investment company cost disclosure».

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Emma Bird, head of investment trusts research at Winterflood Securities, said the current cost disclosure rules appear to create an «unlevel playing field» for the investment trust industry.

The sector has been weighed down by some of the widest month-end discounts in 15 years, which Bird said was mainly due to macroeconomic factors. However, she noted these disclosure requirements are also likely to have weighed on sentiment towards investment trusts.

Iain Scouller, managing director of investment funds at Stifel International, said it was a «frustrating» situation for investment trusts to be dealing with.

«Listed trusts got caught up in something that they never intended to be part of...it needs to be resolved,» he said.

Stone said the bill provides a way to speed up the process of «getting the issue of cost disclosures resolved» and «reaching a better place» for investors and its members.

«We have been working hard lobbying the FCA and other policymakers on this issue and have called for emergency action, as well as a root and branch review of cost