The Investment Management Association (IMA) has urged the regulator to rethink its proposals on restricting the sale of unregulated collective investment schemes (Ucis).
As revealed by Wealth Manager last month, the Financial Services Authority (FSA) is pushing ahead with its plans to curb the retail distribution of some Ucis, despite industry opposition to the move.
The IMA, trade body for the investment and funds sector, has in part backed the FSA's plans but it feels the regulator has been too broad brushed in its definitions and its crackdown on Ucis as a whole.
'We welcome the FSA's proposals which are intended to protect consumers from the sale of unsuitable, high risk or otherwise inappropriate products that have been evidenced to cause consumer detriment.
'However, we are concerned the definition of non-mainstream pooled investments is too broadly drawn and 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,' the IMA said.
'We would urge the FSA to re-consider and tighten up the definition. Equally, we are concerned 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 trade body added.
The IMA's reaction to the Ucis proposals follows the Association of Investment Companies, which represents investment trusts and schemes like enterprise investment schemes and venture capital trusts (VCT), move to urge the FSA to rethink its plans, particularly those for VCT sales.
The IMA has submitted its views to the FSA as part of the regulator's consultation on its planned changes to Ucis sales.