Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FSA to U-turn on VCT sales ban

FSA to U-turn on VCT sales ban

The Financial Services Authority (FSA) is to reconsider plans that would have restricted the sale of venture capital trusts (VCTs) and other high risk investments.

In October, Wealth Manager revealed the FSA was to bring a vast swathe of VCTs and enterprise investment schemes (EIS) under upcoming rules on unregulated collective investment schemes (Ucis), designed to ban the sale and promotion of the product to ordinary retail investors.

Internal correspondence from the regulator showed that both VCTs and EIS would be brought under the banner of Ucis depending on their internal structure, but the move was branded ‘absolute nonsense’ by tax experts.

Now the FSA, which has been consulting on the matter since publishing consultation paper 12/19 last August, is now set to turn back, questioning whether the restrictions would allow ‘sufficient flexibility for firms with high net worth or sophisticated customers’.

The regulator is looking at 'refining' the marketing restriction as the rules gave rise to 'a number of concerns, said head of investments policy David Geale (pictured) in a letter to the Association of Investment Companies (AIC):

‘Following analysis of responses, we are currently considering amending our proposals to exclude the following investment vehicles from the scope of the new marketing restriction:

·         Venture capital trusts

·         Real estate investment trusts

·         Exchange traded products

·         Overseas investment companies that would meet the criteria for investment trust status if based in the UK

He added he was ‘aware of concerns’ over restriction of EIS sales but that the FSA is considering the matter further before coming to a decision on whether they should be restricted.

The FCA Board will meet in April to consider the finalised rules.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Play CIO Tapes: do investors have it as good as it gets?

CIO Tapes: do investors have it as good as it gets?

Citywire gathered three of the UK's leading fund investment heads to discuss what they fear and what makes them cheer about the year ahead

Read More
Your Business: Cover Star Club

Profile: from managing Brunei’s billions to Dorking’s pension pots

Profile: from managing Brunei’s billions to Dorking’s pension pots

Mole Valley Asset Management's boss on why he chucked in multi-billion mandates for Surrey wealth management

Wealth Manager on Twitter