Draft legislation to exclude investment companies from the requirement to produce Key Information Documents does not apply to venture capital trusts (VCTs), the Association of Investment Companies (AIC) has learned.
The legislation, which would formally exempt investment companies from the requirement to comply with PRIIPs and the cost disclosure aspects of MiFID, explicitly excludes VCTs despite previous assurances from the Treasury they would be included. The FCA’s forbearance statement issued on 19 September indicated that all closed-ended funds on a regulated market would be included in the exemption.
Richard Stone, chief executive of the Association of Investment Companies (AIC), said: “We were surprised and disappointed to learn that the draft legislation exempting investment companies from cost disclosure requirements does not include VCTs. It is now widely accepted that cost disclosures mandated by PRIIPs and MiFID are misleading – and they are misleading for VCTs as well as for investment trusts. There is no logical basis on which they have been singled out for exclusion from this exemption.
“We are engaging with the Treasury to understand why this has happened and will be pressing for the legislation to be amended to include VCTs, which have such an important role in backing up-and-coming UK companies. I encourage our VCT members, VCT managers and other stakeholders to write to the Minister, Tulip Siddiq, to urge the Treasury to change its position.”
