The Association of Investment Companies has called for the key information documents regulation to be delayed for closed-ended funds.
The European Union said last month that it would delay introducing requirements for open-ended funds to comply with KIDs rules after criticism of rules from the industry.
KIDs regulation is centered around disclosing information and it is designed to help investors to compare products across the market. Close-ended funds are already required to provide KIDs.
The trade body, which represents investment trusts, now says,that the KIDs requirement should be scrapped for closed-ended funds as well while the regulation is reviewed and reformed.
AIC chief executive Ian Sayers says: “The expected delay to KIDs for UCITS funds is welcome but leaves investors in non-UCITS funds out in the cold. Recent EU proposals to reform KIDs do not address their fundamental failings and will either do no good or make matters worse. Investors now face being misled by KIDs for years to come.
“As the EU appears unwilling or unable to protect non-UCITS investors, the FCA should take the lead and warn investors not to rely on these documents. It should ensure that the misleading information in KIDs does not pollute other areas of the market, for example by prohibiting it from being used in financial promotions and in search filters on websites.”