The Government has published its long-awaited Cat standard regulations extending the Cat equity Individual Savings Account to cover managed funds.
But in practice the charging regime may prove too restrictive for active managers and even some tracker funds.
The equity Cat standard has a maximum charge of one per cent of net asset value of the fund with a saving of no more than £500 in a lump sum a year or £50 a month.
The fund must be an authorised unit trust, open ended investment company or investment trust and must be 50 per cent invested in European Union stock exchanges.
Units and shares are to be single priced at mid market price.
The insurance ISA sets down an annual charge of no more than 3 per cent a year of the value of the fund with no other charges for things such as guarantees or surrender values.
The minimum premium must be no greater than £250 lump sum a year or £25 a month. Surrender values should reflect the underlying value of the asset.
The deposit ISA outlawswithdrawal charges and only allows charges for duplicate statements and lost cards. The interest rate must be no lower than two per cent of the standard variable rate.