New rules threaten low-cost fund charges

The European Securities Markets Authority (ESMA) has proposed that profits made by fund managers who lend out stocks should be returned to investors. This could affect charges as, currently, fund managers can use the income they receive from loaning stock to keep annual management fees low. The FT quoted Peter de Proft, director general of European Fund and Asset Management Association, as saying: "If you take away the revenue from stock lending then the cost of running the funds will go up and someone is going to have to pay that cost." However, Alan Miller, co-founder of SCM Priv...