'There is going to be more onus on disclosure and that will bring a degree of additional risk into the system, an increasing onus on stewardship of investors when they are making investment decisions.'
At a Treasury Select Committee hearing today (12 December), Rathi was quizzed about concerns that the recent focus on cost disclosures for investment trusts could lead to them «double counting their costs», making them appear artificially more expensive and potentially at risk of withdrawal from platforms as a result.
FCA sets out temporary measures to address investment trust cost disclosure concerns
The CEO said he did not believe this was the case, arguing the forbearance offered by the FCA would not apply the regulations as they are, in order to allow investment trusts to provide greater disclosures to retail investors.
On the matter, he revealed the FCA will be introducing disclosure reforms for listed companies, including investment trusts, before Christmas.
«There is going to be more onus on disclosure and that will bring a degree of additional risk into the system, an increasing onus on stewardship of investors when they are making investment decisions and the ability to discern for themselves what the disclosures are telling them,» Rathi explained.
Rathi and Ashley Alder, chair of the FCA, were also questioned about the slow pace of implementing the Edinburgh Reforms and in repealing legacy EU laws.
In a report published last week, the TSC criticised the progress of the Edinburgh Reforms, calling it a «damp squib».
Alder said the regulator is not «moving as fast as it should be» but clarified it is moving at an «appropriate pace». This is because prioritisation and sequencing have become hard in the repealing
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