IMA WELCOMES INCREASED FLEXIBILITY FOR COLLECTIVE INVESTMENT SCHEMES

IMA welcomes today’s announcement by the FSA that a more flexible approach to the regulation of collective investment schemes (CIS) is to be introduced on 1 April 2004.

The industry has been encouraged by the FSA’s pre-consultation on the possible changes to the CIS rules. The resulting regime will remove prescriptive and overly detailed rules to allow a more flexible regime whilst maintaining a robust regulatory environment.

The IMA particularly welcomes:

The introduction of a wider range of products for retail investors which will allow more suitable products to be developed for the whole investor spectrum

Short reports² which will provide investors with a concise, consumer friendly overview of their funds on a bi-annual basis

Clarification of the use of fair value pricing³, which IMA has identified as an important addition to the tools fund managers have to price funds accurately and to avert market timing. As a result IMA along with the Depositary and Trustee Association (DATA) is currently drafting guidance for members, outlining the processes involved when using fair value pricing.

Richard Saunders, Chief Executive of the IMA commented:

“This will bring a more flexible and less prescriptive regulatory environment, for which the FSA is to be commended. We are particularly pleased with the introduction of a broader range of vehicles for investors which will permit the industry to develop products to fit the clients rather than trying to make clients fit the products.”

-Ends-

For further information, please contact;
Richard Saunders, Chief Executive, IMA, 020 7831 0898
Helen Stephenson, Communications Officer, IMA, 020 7831 0898
Ros Clark, Technical Adviser,  IMA, 020 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, 07834 089332

Notes to Editors:

2. Short reports will not replace annual reports but will provide easy to understand overviews of fund performance, investment objectives, policy and any changes to the fund during the period. Investors can continue to receive copies of interim and annual reports on request.

3. Fair value pricing is a means of accurately estimating the value of the underlying assets of a fund and can be used as a counter measure to protect funds against arbitrage.

4. DATA was formed in 1999 and is the Association representing the industry views of depositaries of open-ended investment companies (OEICs) and trustees of unit trusts within the UK. Its prime objective is to promote, support, oppose or propose changes to the relevant UK legislation, in respect of the responsibilities of members of the Association and to promote and support the development of the depositary and unit trust trustee industry in the UK.