Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) have been granted an exemption from the FCA's ban on sales of unregulated collective investment schemes (UCIS) to retail investors.
The final rules, outlined today by the Financial Conduct Authority, state VCTs and EIS vehicles do not fall into the UCIS category and can continue to be sold to retail investors.
"Following analysis of the feedback, a number of products now lie out of scope of the marketing restrictions," said the FCA.
"These include exchange traded products, overseas investment companies that would meet the criteria for investment trust status if based in the UK, real estate investment trusts and venture capital trusts.
"Enterprise investment schemes and seed enterprise investment schemes, unless structured as UCIS, are also outside the scope of the rules."
In August last year, the first consultation paper from the regulator proposing to ban the sale of UCIS to ordinary investors did not explicitly rule out including these products, a move which alarmed VCT and EIS providers.
Earlier this year the regular penned an open letter to the Association of Investment Companies (AIC), indicating that VCTs, real estate investment trusts, ETFs, and relevant offshore investment trusts could be removed from the forthcoming ban.
However, there was no mention of a reprieve for EIS schemes, leading to uncertainty over the sector's future.
Today the FCA has given VCTs and EIS a welcome boost, as the proposed ban would have had a detrimental effect on both sectors.
Ian Sayers, director general of the AIC, has previously warned VCT fundraising would halve in 2014 if VCTs were not granted an exemption from the ban.
"The proposed UCIS ban will have a massive impact on the VCT sector, and the fact the FSA did not even mention the VCT sector in the paper was pretty unimpressive," he said earlier this year.
Sayers added there has been little impact on VCT fundraising this year.
In stark contrast, EIS providers argue fundraising has been flat so far in 2013, with advisers refusing to recommend the products due to uncertainty as to whether they will fall under the UCIS banner.
Dermot Campbell, managing partner of EIS platform Kuber Ventures, added the FCA's two month delay into the publication of the final rules into UCIS has also affected fundraising.
"For 2012/2013 fundraising stands at £500m, flat on the year prior, which you would not expected to be the case give the significant enhancements made in the past year to the structure to make the sector more appealing," he said.
"For every one adviser that recommended EIS, we estimate five did not even consider looking at the products, due to concerns over the proposed UCIS ban."
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