Fund managers warn FSA over Ucis ban Mifid overlap

The Investment Managers Association (IMA) has backed the Financial Services Authority’s (FSA) clampdown on the sale of unregulated collective investment schemes (Ucis), but warned it may overlap with incoming European rules.

The trade body said the FSA must ensure the incoming ban on the retail sale of Ucis complemented rather than overlapped with Mifid proposals to allow member states to intervene on sales of toxic assets.

The IMA also cautioned that the regulator’s definition of Ucis was too broad and needed clarification.

Andy Maysey (pictured)  IMA senior adviser of retail distribution, said: 'We are concerned that the FSA is adopting a broad brush policy of seeking to ban Ucis when, in our view, the FSA already has the tools to address these issues.’

'[The definition] would appear to capture investment vehicles that have very similar characteristics to those products that are, and will continue to be, widely available to retail consumers. We would urge the FSA to reconsider and tighten up the definition.'

Julie Patterson, IMA director of authorised funds, added: ‘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 Financial Services Compensation Scheme 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.’