The Financial Conduct Authority is set to exclude venture capital trusts from plans to ban unregulated collective investment schemes from being marketed to ordinary retail investors.
In a written answer given to the House of Commons last week, Treasury economic secretary Sajid Javid said the regulator will set out its position on the proposed Ucis promotion ban next month.
He said: “The FCA has announced it is minded to explicitly exclude VCTs from the restrictions on promotion proposed in consultation paper 12/19. The FCA is working toward making a final policy statement in June.”
The FSA first consulted on the banning the promotion of Ucis “and similar products” to most retail investors last August.
Under the proposed rules, Ucis would only be marketed to sophisticated investors and high net worth individuals. Currently Ucis can be promoted to ordinary investors if an adviser deems the product is a suitable investment.
The Association of Investment Companies warned in September that the ban as proposed would cause “significant detriment to the VCT industry”, while Bestinvest has said the ban could wipe out as much as 75 per cent of VCT fundraising.
In February the FSA said it was considering whether to amend the proposed ban on Ucis promotion to give firms more flexibility and to ensure products such as VCTs, exchange traded products, overseas investment companies and real estate investment trusts are not impacted.
Sajid Javid’s written answer did not address how other products besides VCTs will be treated under the Ucis ban. The FCA declined to comment on whether other products will also be out of scope, saying it will set out its position in next month’s policy statement.
Earlier this month the FCA said it had delayed its Ucis policy statement, due in April, “to allow the time to get it right”.