Fund managers will no longer have to seek unitholder permission before making changes to a fund's ma...
Fund managers will no longer have to seek unitholder permission before making changes to a fund's mandate under the FSA's CP 183 proposals.
The regulator is seeking consultation on whether fund managers should have to call unitholder meetings to enable investors to vote on such things as changes to a fund's investment objective or risk profile or whether pre-notification with 60 days minimum notice is sufficient.
The FSA is keen to relax the rules regarding unitholder notification after its research revealed unitholder meetings are poorly intended and the fund managers' proposals are virtually always passed.
Kevin Tomlin, head of collective investments at the FSA, said: 'Our review led us to the conclusion that the manager should be left to manage the fund in the best interest of its shareholders. Consumers enter into a scheme trusting the manager and the current rules are strict on minor matters. We propose investors should just be informed of significant changes.'
Tomlin added less frequent unitholder meetings, along with the reduced documentation requirements proposed, should save the industry £10m.
'We think there could be an annual saving of £10m just by producing shorter reports on six and 12 monthly bases,' he added.
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