Friday 13th December 2024 turned out to be lucky in the end: Baroness Sharon Bowles was rewarded with the 3rd and final Reading of her Private Member's Bill (PMB), entitled Listed Investment Companies (Classification etc) in the House of Lords. The PMB now moves to the Commons, where it faces four more stages.
Clarifying the status of investment trusts and companies
Baroness Bowles, with the support of Baroness Altmann, has done much to highlight the issues faced by the UK's investment trusts and investment companies. This Bill aims to clarify their status. For too long they have been regulated under the same rules as open-ended funds and the misinterpretation of regulations needs to be resolved urgently, having caused so much confusion and damage to the sector.
Misleading costs remain on investment platforms
Unlike open ended funds, there is no ongoing cost for investment companies that is chargeable to the investor, yet the quality of data which drives computer programmed decisions for many retail platforms appears caught in the headlights. Inactivity, lack of guidance, and out-dated and inaccurate rules and are preventing investors from buying the shares of any company that chooses to abide by the law, the FCA's guidance and common sense.
Many companies continue to publish the voluntary Key Information Document (KID) in which they correctly publish a zero cost to the investor but are forced to supply a fictitious 'ongoing cost' figure in the data feed which accompanies the KID, and which is sent to the platforms. Failure to do so results in them being effectively deplatformed, as purchases are suspended. There is no justification for it.
Now it is over to the MPs and, if the Government is serious about encouraging economic growth, the campaign group believes it would do well to adopt the Bill and take a quick, free and easy step to move things along.
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