AIC calls for VCT exclusion from FSA Ucis ban

The Association of Investment Companies (AIC) has called for the Financial Services Authority (FSA) to amend its proposed clampdown on the sale of unregulated collective investment schemes (Ucis) to ensure it excludes venture capital trusts (VCTs).

The FSA consultation paper proposed to ban the promotion of Ucis and similar unregulated funds to retail investors and while investment trusts have been excluded from the proposals VCTs have not.

The AIC has argued that including VCTs in the FSA's proposals would restrict their promotion to only sophisticated and high-net worth individuals.

AIC director general Ian Sayers said: ‘The AIC is aware of this issue and is working closely with the FSA. VCTs are listed investment companies overseen by an independent board and regulated by the listing rules and company law, in the same way that investment companies are.

We will be calling on the FSA to exclude VCTs from the proposals, in the same way that investment trusts have been excluded.”

VCTs are often used by advisers for effective tax planning and, in May, received a boost from a European ruling that accepted government plans to allow VCTs to invest in larger companies.