The UK Shareholders’ Association has joined the Association of Investment Companies and leading advisers in warning that FSA plans to relax listing rules could result in a “disaster” matching the split-cap debacle.
Consultation closes this month on FSA plans for international trusts that would waive the requirement for an independent board and to disclose cross-holdings. The latter mea- sure was introduced specific- ally to protect investors after the split-cap problems.
AIC director general Daniel Godfrey warns of the dangers in allowing the prestige of a full London listing without the standards to protect investors. He says: “This consultation represents the last opportunity to convince the FSA its proposals undo all its previous good work and might lead to a disaster with investors losing their shirts due to a lack of proper regulation of companies.”
UKSA communications director Roger Lawson says in one sweep the FSA has wiped out the hard work the industry has done to clean up its act after the collapse of many split caps.
Lawson says: “Our concern is for the unsuspecting British investor who will buy these funds unaware of the potential pitfalls, lack of accountability and transparency that may go hand in hand with these companies.”
Bestinvest head of communications Justin Modray told Money Marketing in December that the plans could lead to another “magic circle” forming with “grave repercussions” for the industry.