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FSA is swinging towards single pricing for funds

The FSA is considering an overhaul of unit trust and Oeic regulations to bring single pricing and greater transparency to fund dealing.

In a discussion paper this week, the FSA says research reveals investors are confused by dual pricing structures.

Single pricing is the standard for Oeics but most unit trusts operate dual pricing. The FSA is looking at improving Oeic rules with a single price structure which includes all dealing costs.

Currently, investor dealing costs are covered within the bid/offer spread on dual-priced funds or within a dilution levy on single-priced trusts. Several other fund costs are removed directly from the fund&#39s assets but are not reflected in the annual fee.

Of four possible regimes, the favoured option appears to be a single swinging price, which would see unit prices adjusted marginally on whether purchases were exceeding redemptions or vice versa.

A consultation paper will be published in January.

FSA head of collective schemes Kevin Tomlin says: “We have found investors prefer a single price when buying and selling units but they can be confused by associated dealing costs under the existing single-pricing system.”


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