Bill to overhaul investment trust cost disclosure rules to be debated in parliament
If the bill’s passage through the House and Lords and House of Commons is successful, investment companies will no longer be classified as AIFs and their costs will be removed from data feeds.
A private members' bill tabled by former pensions minister Baroness 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.
Altmann, supported by fellow House of Lords peer Baroness Bowles, have repeatedly called for the removal of the current EU cost disclosure rules, known as PRIIPS, which have caused investment trust charges to appear artificially expensive.
MiFID II forces firms to disclose total investment cost to clients
If the bill's passage through the House and Lords and House of Commons is successful, investment companies will no longer be classified as AIFs and their costs will be removed from data feeds.
As a result, costs would be treated the same as any other listed company, although they will remain readily available in KIIDs and factsheets as well as annual and interim reports.
MP John Baron, Bowles and Altmann have written to Nikhil Rathi, CEO of the Financial Conduct Authority, and Andrew Griffith, economic secretary to the Treasury, calling for these «misleading» cost disclosures to be removed.
Investors in investment companies, which trade shares like any other public company, already benefit from transparent reporting, including detailed cost disclosure, they argued.
Under the current rules, however, institutional investors and intermediaries must report the costs again in their own disclosures to their clients, resulting in «double counting» and an additional layer of complication,
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