The IMA is pushing the FSA to include a standardised method of calculating past performance, using o...
The IMA is pushing the FSA to include a standardised method of calculating past performance, using one, three and five-year figures, in its changes to disclosure regulations.
Regulations dealing with UK adoption of the EU manager directive allowing for easier sale of funds within Europe are expected to be released later this year and the IMA has suggested the use of a standardised approach to presenting past performance data.
Richard Saunders, chief executive of the IMA, told industry delegates at the association's annual conference that an acceptable form of presentation for past performance would be the annualised figures, updated quarterly.
Another major issue the IMA is attempting to tackle is the raft of expected tax changes. The knock-on effect of the Inland Revenue's review of the offshore funds regime will put onshore funds at a disadvantage, Saunders said.
While the possibility of allowing onshore funds to offer roll-ups similar to offshore portfolios has not been rejected out of hand, the Revenue is not saying what it is looking at with regard to the planned changes. The association is expecting an announcement in the pre-Budget speech later this month.
Other tax-related issues the IMA is keeping an eye on include possible changes to corporation tax, the effects of Sandler's proposals and the changes that will come as part of the FSA's collective investment schemes review.
With regard to the Sandler report, Saunders said, a graph used in the report, incorrectly in the association's opinion, illustrates there is no correlation between charges and performance. The IMA requested the underlying data used for the chart from the Treasury and, once plotted, ran a regression line through the data.
'It sloped upwards,' Saunders said. 'In fact, it sloped upwards at the rate of a 2.25% increase in return for every 1% increase in charges, more than comfortably paying for the higher charges. Whatever one makes of the data or the analysis, it simply does not support the contention there is no correlation at all.'
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