The FSA has produced consultation paper 164 in response to recommendations made by the Treasury select committee in February 2003. The paper looks at several possible scenarios for investment trust regulation, including direct regulation, regulation of the people who own investment trusts or building on the existing framework that is already in place.
Investment trusts, as listed companies, are currently regulated by company law and the FSA’s listing rules. Sale and promotion of trusts by advisers or through manager-sponsored savings products is regulated by the FSA, as are external fund managers.
The AITC says it is vital that investment trusts maintain features such as Stock Exchange listing, the closed-end structure, independent boards and the ability to gear and issue different share classes under the new regulatory regime.
AITC director general Daniel Godfrey says: ” We will be looking carefully at the issues raised in this consultation to see whether there are areas where improvement is still possible, for example, investment trust investors’ access to the Financial Ombudsman Service.”