The Financial Services Authority (FSA) is set to make clear that venture capital trusts (VCTs) and real estate investment trusts (REITs) will not be included in a forthcoming ban on the sale of unregulated collective investment schemes (UCIS) to most retail investors.
In August, an FSA consultation paper proposing to ban the sale of UCIS to 'ordinary' investors did not explicitly rule out including these products, a point highlighted with alarm by the investment trust industry.
However, David Geale, head of investment policy at the FSA, has written to the Association of Investment Companies (AIC), suggesting the regulator will make it clear the products will not fall under the scope of the new rules.
The regulator is considering exempting VCTs, REITs, exchange traded funds and relevant offshore investment trusts.
The FSA has already said UK-domiciled investment trusts will not be caught by the proposals.
Geale said the FSA is also aware of concerns related to enterprise investment schemes (EISs), and is considering its options ahead of a final policy statement due in April.
"As ever, these considerations are subject to our policymaking process and will only be confirmed once the FCA [Financial Conduct Authority] board has considered them," Geale said.
"We will be contacting key stakeholders to discuss any changes to the new rules in more detail over the next couple of months."
Ian Sayers, director general of the AIC, has previously said the initial proposals would have a detrimental effect on flows into VCTs if only ‘sophisticated' investors were allowed to invest in the products.
Sayers warned VCT fundraising would halve in 2014 were VCTs not granted an exemption from the ban.
Protecting and dividing family wealth
'Pensions could veer off course'
Pre-selected advice firms mooted
‘Massive risk-off rush’
Online portal launching alongside