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When the Industry Came Together

12th January 2024

This was a week that will live long in the memory. Our campaign group has been lobbying for fairer treatment of investment companies for two years now. An important waypoint in the campaign is HM Treasury’s draft Statutory Instrument (SI) that aims to replace the EU Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation and create a new UK retail disclosure framework. Their policy note and draft SI were released on November 22nd, and as is normal, they asked for comment via a consultation, with the deadline being January 10th.

Christmas was inconveniently timed, and so we returned to work with a very short time in which to mobilise support from industry for a joint submission our group put together, led by the London Stock Exchange Group (if you haven’t seen it, let me know!).

Our proposal, thankfully also backed via their own submission by the AIC, was simply to put investment companies on the product exclusion list for the framework that is to replace PRIIPS (“CCI” – Consumer Composite Investments). This would, we felt, be a quick and effective way of solving many of the ills of the current legislative and regulatory framework, the most pernicious of which being the way investment company costs are presented and aggregated.

None of our group could have guessed the sheer volume and quality of support. By Thursday morning, we had over 300 signatories, with more coming in after the deadline. Support came from across the industry and even beyond. The country’s largest asset managers, investors in the sector, investment companies themselves (over a quarter of the total), academics, peers and parliamentarians, brokers, investment banks, corporate advisory firms, compliance consultancies, individuals (many of whom couldn’t get their firms to sign so signed in their own names instead)… literally every type of stakeholder in the sector rallied to the cause.

We await the response from the Treasury, to whom we are grateful for being given the opportunity to express our views. We also welcome the future opportunity to work with the FCA in allaying any concerns they may have with any changes to the current framework.

But whatever happens, we reach this weekend utterly exhausted but exhilarated by the week’s events. It’s fantastic to witness so many people come together to ensure the survival and hopefully growth of this wonderful sector.

In 1868, the first investment trust, Foreign & Colonial Trust, was launched to provide ‘the investor of moderate means the same advantage as the large capitalist’. We are a step closer to making sure this democratisation of access to investable assets of all different types continues – to the benefit not just of individual savers, but the wider economy too. The time will come to list and thank all the people who got us here, but the job is not yet done. Please do get in touch if you’d like to help in the meantime.

Ben Conway – Head of Fund Management

For professional advisers only. This article is issued by Hawksmoor Fund Managers which is a trading name of Hawksmoor Investment Management (“Hawksmoor”). Hawksmoor is authorised and regulated by the Financial Conduct Authority. Hawksmoor’s registered office is 2nd Floor Stratus House, Emperor Way, Exeter Business Park, Exeter, Devon EX1 3QS. Company Number: 6307442. This document does not constitute an offer or invitation to any person, nor should its content be interpreted as investment or tax advice for which you should consult your financial adviser and/or accountant. The information and opinions it contains have been compiled or arrived at from sources believed to be reliable at the time and are given in good faith, but no representation is made as to their accuracy, completeness or correctness. Any opinion expressed in this document, whether in general or both on the performance of individual securities and in a wider economic context, represents the views of Hawksmoor at the time of preparation and may be subject to change. Past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you originally invested. FPC2426.

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