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FSA considers sparing VCTs from Ucis clampdown

FSA considers sparing VCTs from Ucis clampdown

The Financial Services Authority (FSA) is reconsidering whether venture capital trusts (VCTs), real estate investment trusts (Reits) and exchange traded products should be included its incoming clampdown on unregulated collective investment schemes (Ucis).

David Geale (pictured), FSA head of investment policy, has written to the Association of Investment Companies (AIC) to say the final Ucis paper, may exclude these investments, which would ensure they could continue to be marketed to retail investors.

The FSA’s Ucis consultation paper, published in August 2012, classed VCTs, Reits, and exchange traded products as ‘non-mainstream pooled investments’, proposing to ban their promotion to ordinary retail investors.

Geale told the AIC the regulator was considering amending this proposal ‘to find the right balance between consumer protection and choice’.

The proposed amendments will also affect offshore investment companies that would meet investment trust criteria if based in the UK, enterprise investment scheme funds and seed enterprise investment scheme funds.

The FSA is also considering whether it is appropriate for firms to allow high-net-worth individuals to benefit from certain schemes, including Business Property Relief and Business Premises Renovation Allowance.

Any amendments will not be confirmed until April after being considered by the Financial Conduct Authority board.

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