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20 November 2012

IMA: Investors must be protected from mis-selling of UCIS

The Investment Management Association has expressed its support for proposals to protect investors from being sold inappropriate products in its response to the FSA's consultation, "Restrictions on the retail distribution of unregulated collective investment schemes (UCIS) and close substitutes".

The exact scope of this consultation needs to be clarified in the context of other developments. The retail distribution review (RDR) should help to improve the standard of retail advice and sales. The new FCA will have much-needed wider intervention powers. And legislation currently being debated in Brussels will allow intervention in sales of toxic assets across the EU. Care must be taken to ensure that these various overlapping pieces of regulation tie together and complement one another.  

Julie Patterson, IMA Director of Authorised Funds, said: “It is right that some classes of products need to be presumed as unacceptable for the mass retail market; a case-in-point is the £214 million paid in 2010/11 by the FSCS to investors in bonds issued by a life settlement investment vehicle. Nevertheless, certain investors ought to be able to access less mainstream investments. The FSA needs to get the boundaries right and we have highlighted to them some areas of the proposals that require further work.”

Press release

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