Warning: Baroness Sharon Bowles believes the FCA has misapplied rules on trusts
British investors have been hamstrung by the ‘misleading’ use of old EU rules by the City watchdog, a peer will claim today.
Baroness Sharon Bowles will say the Financial Conduct Authority (FCA) has misapplied rules on investment trusts to make them seem more expensive, ‘killing the sector.’
It comes as Baroness Ros Altmann, a former pensions minister, pushes through a Bill to remove the trusts from these rules, which she said will tempt investment into UK assets instead of overseas rivals.
At the Bill’s second reading today, Bowles is expected to say confusion over the true cost of putting money into the trusts is the result of misinformation, which is the FCA’s fault.
EU regulations in 2013 classified listed British trusts as ‘alternative investment funds’ and so the FCA put them in the same category as private equity and hedge funds.
But the trusts are subject to strict disclosure rules, requiring them to report some charges in a way that makes it seem as if they were being paid by investors when they are not, making them appear more expensive than they are.
