For Immediate Release: Thursday 9 November 2000

AUTIF RESPONSE TO THE CHANCELLOR'S PRE BUDGET REPORT

The Association of Unit Trusts and Investment Funds (AUTIF) welcomed the announcements made by the Chancellor and HM Treasury regarding ISAs, most notably the alignment of PEP and ISA rules. The Association has persistently called for this change. Currently PEP holders are largely restricted to investing within the European Union, but as of next April they can take advantage of the ISA regulations which allow investment worldwide. It also means that managers will be able to rationalise their internal systems and administration processes.

The one disappointment however was over the issue of ‘incompatible’ ISAs. AUTIF is of the opinion that where investors have unwittingly taken out two ISAs, by ‘ticking the wrong box’ and have not gained extra tax benefits, then their second investment should retain its ISA status.

Philip Warland, Director General of AUTIF, commented:

"Overall we were very pleased with these latest ISA developments which make sense and will encourage more people to invest. However, not granting an exemption for those who have mistakenly invested in two ISAs but gained nothing by doing so, could be damaging to the whole ISA concept and possibly discourage people instead.

In connection with this, AUTIF will be drawing to the attention of the Treasury review of industry codes of practice, to be chaired by DeAnne Julius, the dangers to investors of the different marketing requirements for ISA components, depending on whether they fall under the FSA or the Banking Code."

For further information please contact:

Philip Warland, Director General, AUTIF - +44 (0)20 7831 0898
Anne McMeehan, Director of Communications, AUTIF - +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898