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IMA calls for Euro fund standards

The Investment Management Association has urged European regulators and fund management companies to introduce a common accounting standard for investment funds.

Deputy chief executive Sheila Nicoll says investors would benefit if European firms adopted a standard approach to fund reporting and information.

She says: “Would it not be a major step forward for our investors if we had a standard way of presenting our accounts to investors and it would surely also streamline the way we do things if the same accounting standards applied at least across Europe?”

Nicoll says such a move would complement the proposed simplified prospectus in the new Ucits directive, which would introduce a single marketing document to be used throughout Europe.

As the directive does not allow funds to be measured and presented in a comparable way, however, she suggests the introduction of a European version of the IMA&#39s performance category review committee, which categorises funds.

Nicoll also criticises the directive for failing to address the way in which the industry presents charges and expenses, other than to recommend the use of total exp-ense ratios.

She says that, as there is not a common method of calculating TERs, the directive should recommend better ways for investors to make comparisons.

She says: “Even where such ratios are calculated, the fact that they are calculated on the basis of information published in annual reports, and those reports do not disclose the same information, means that there are question marks about comparability.”

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