Highlights of the FSA's proposed changes to CIS rule book
• The consultation period for the proposals in the FSA's CP185 run to 31 October 2003. It expects to finalise the rules in early 2004, when they will be available for use by existing UK collective schemes. The regulator is looking to make the rules mandatory from February 2007.
• The Inland Revenue will be consulting later in the year on any consequential changes that may be necessary to the tax rules for authorised collective schemes. This will include ensuring new non-retail funds are practical and fair.
• Retail fund of funds will not be able to hold the newly categorised non-retail schemes, as proposed in CP185. The consultation paper suggests non-retail schemes, which operate like quasi-hedge funds, should be subject to lighter product regulation. These schemes will only be available to institutional and expert investors, and retail fund of funds have been specifically excluded from this definition.
• The regulator will consult further on whether to allow money market funds to use a valuation method that would enable the funds to compete directly with deposit based products. The method would mean allowing the accrual of interest on money market investments on a amortisation basis with a constant capital value rather than using market values at each valuation point.
• The FSA will work with industry bodies to develop some standard documentation for fund authorisation to help reduce costs. Such documentation should apply to applications for new fund launches and any alteration to existing funds.
• A simplified prospectus is to be offered to investors with a full prospectus available on request. The FSA believes prior to an actual sale investors should have enough clear information available to allow them to make an informed judgement about the fund.
• The FSA has put off making single pricing mandatory on unit trusts and will consult again on the subject in the spring of 2004. The regulator has included a transitional provision to allow unit trusts to continue to use the dual pricing system when they start operating under the new source book.
• Fund groups are to be given more flexibility in the publication of fund prices. Under current regulations fund prices are to be made public via a national newspaper. The FSA has decided that going forward group's will be allowed more flexibility on where they publish the information.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation