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 Hugh Yarrow: Why the equity income sector needs fixing

Hugh Yarrow: Why the equity income sector needs fixing

Hugh Yarrow's Evenlode Income fund was recently removed from the Investment Association's UK Equity Income sector.

Play GAM charity football tournament: the live draw

GAM charity football tournament: the live draw

Former Chelsea and England footballer Graeme Le Saux visits Citywire to make the draw for the tournament, where all proceeds going to Wheels for Wellbeing.

Play FIFA, Panama Papers…and what everyone’s getting wrong

FIFA, Panama Papers…and what everyone’s getting wrong

VIDEO: Investigative reporter Jeffrey Robinson reveals how major corruption scandals are being mishandled and what to expect next.

Your Business: Cover Star Club

Profile: JPM Wealth MD on breaking the glass ceiling

Profile: JPM Wealth MD on breaking the glass ceiling

During her tenure at JP Morgan, the private bank has changed the way it segments clients in a bid to improve focus

Wealth Manager on Twitter