The Association of Investment Companies (AIC) is putting together a list of shares and securities independent advisers can continue to recommend after restrictions on their use of higher-risk unregulated investments come into force next year.
The list of 'excluded securities' has been confirmed by AIC member companies and will be updated on a monthly basis.
From 1 January 2014, IFAs cannot recommend certain pooled investments to their 'ordinary' retail clients in the UK. These are referred to as ‘non mainstream pooled investments' (NMPIs).
However, if an investment is an ‘excluded security', then it will not be considered to be an NMPI and therefore can continue to be recommended to ordinary retail clients, subject to normal suitability requirements.
The AIC said most of the shares and securities issued by its members will be excluded securities, as they are issued by investment trusts and VCTs, among other companies. But it said the definitions of NMPIs are complicated.
It added the list is not exhaustive: if an investment company share or security does not appear in the list, this does not necessarily mean it is an NMPI.
You can read PS13/3 - the FCA's policy statement on the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes - HERE.
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