For immediate release: Thursday 4 July 2002

 

The Investment Management Association calls on Europe to implement:

• A common accounting standard for investment funds

• The creation of a European Performance Category Review Committee

• A standard formula for calculating Total Expense Ratios (TERs)

Speaking at the annual Fund Forum International Conference in Rome today, Sheila Nicoll, Deputy Chief Executive of the Investment Management Association (the IMA) called on regulators and management companies to adopt a standard approach to fund reporting and presentation of fund information across Europe. 

“Would it not be a major step forward for our investors, if we had a standard way of presenting our accounts to investors – and it would surely also streamline the way we do things if the same accounting standards applied… at least across Europe?”

This would complement the proposed simplified prospectus, included within the new UCITS Directive, which would introduce a single marketing and information document to be used throughout Europe. 

However, the prospectus still raises two main concerns for Ms Nicoll.  The first is that, to be meaningful, past performance must be measured and presented in a comparable way.  She suggested that a European version of the IMA’s Performance Category Review Committee be established to resolve this situation: 

“I am aware of a concern among a number of my members about categorisation of funds.  We in IMA work together with the performance measurement companies to establish standardised categories for funds…  There is, however, no such process which operates for funds which are marketed on a pan- European basis.  We think it is important to have such a mechanism … which ensures that investors are given comparable data on which to base their investment decisions.”

The second, that the industry should look carefully at how they present charges and expenses:

The UCITS Directive does not go into any detail … but FEFSI has recommended the use of a total expense ratio.  The main problem is that there is not a standardised methodology for calculating such ratio.  Even where such ratios are calculated, the fact that they are calculated on the basis of information published in annual reports, and those reports do not disclose the same information means that there are question marks about comparability.” 

Ms Nicoll was speaking primarily on how regulators and practitioners can work together.

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For further information please contact:

Clare Arber, Head of Communications, IMA, 020 7831 0898

Helen Stephenson, PR Assistant, IMA, 020 7831 0898

Notes for Editors:

1.    A full copy of the speech is attached.

2.   FEFSI (Fédération Européenne des Fonds et Sociétés d'Investissement) is the pan-European umbrella organisation of the investment funds industry http://www.fefsi.org/

65 Kingsway London WC2B 6TD

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975

www.investmentuk.org

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.