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IMA&#39s disclosure plans &#39will disadvantage Fofs&#39

Implementation of the Investment Management Association&#39s portfolio disclosure proposals could make it difficult to manage funds of funds because information on the underlying holdings of funds would be restricted, say managers.

The IMA, which is aware of the potential problem, says all investors should have access to the same portfolio information at the same time delay. It says this is because real-time data could be used in market timing, which disrupts markets and can increase the cost of buying or selling shares.

Market timing can take place where an investor knows a fund&#39s dealing price does not reflect the most recent market information or where short-term trading positions are taken on the direction of the markets.

But making the same level of information available to all investors could increase costs, meaning that fund managers could decide to publish portfolio details less frequently. Fund of funds managers are concerned that if this happens, it will be more difficult to assess risk and make asset allocation decisions as these would be based on outdated information.

F&C Asset Management director, head of communications & strategy Jason Hollands says: “Different levels of transparencies are suitable for different types of investor. I think the important thing in terms of preventing market time abuse is monitoring suspicious trading activity when you get large trades and applying dilution levies.”

Abbey head of client investment and multi-manager development John Kelly says: “Using a fund of funds means information is always historical and all you can do is minimise the gap. What these people are arguing about is one of the reasons we chose to have direct contracts with fund managers rather than a fund of funds.”


Introducers to face VAT threat over referrals

Mortgage introducers who get a fee for referring clients on to an intermediary or network could face VAT bills. The position has been clarified for appointed representatives who will not pay VAT if they are working within a recognised network structure but it looks likely that mortgage introducers will be liable for VAT. Lead-generation agencies […]

Treasury opposed to standard risk ratings

The Treasury has told MPs it would be concerned about any attempt to standardise risk ratings for investment products. A report from the Treasury reinforces the fears of former Treasury FInancial SEcretary Ruth Kelly that standard risk ratings would not work. It forms part of the Treasury&#39s response to the select committee report into restoring […]

IFA&#39s forms get lost in NU system

Norwich Union Healthcare&#39s new admin system is unable to find application forms which have been scanned, leaving a Sheffield IFA&#39s applications in limbo. Johnson Birkett IFA Nigel Thompson has been told that three forms for income protection cover have been lost despite being logged into NU&#39s document scanning system. Thompson says copies faxed to NU […]


DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]


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