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FCA disclosure panel debates ‘potentially undesirable’ commission costs disclosure

An FCA panel has said that including trading commission costs could be “potentially undesirable” as it works to set a new charges disclosure template for asset managers.

In a note published today on its latest meeting, the institutional disclosure working group, chaired by Chris Sier, has discussed further developments for the template it is likely to complete in December.

The disclosure template is meant to give clarity and transparency to the costs and charges asset managers provide to institutional investors.

At this stage of the works, members discussed the inclusion of an “other cost” category which is mainly related to trading costs reporting, but issues were raised over the different ways asset managers report on research costs in Europe and the US.

Members have also discussed whether the template should include costs absorbed by managers, which might be reported as “zero” costs and how these impact on fund managers’ incentives.

Earlier this year Money Marketing reported that the group is first analysing the cost drivers behind a wide-range of the underlying asset classes of funds including lifestyle funds and investment trusts.

The group confirmed it is now considering how to present information about fixed income costs in “a more meaningful way” for users as well as costs related to foreign exchange.

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