The Wealth Management Association (WMA) has slammed the treatment of investment trusts by the proposed Mifid II regulation.
Under the proposed regulation, all shares in non-Ucits collective investment schemes may be defined as 'complex'.
The WMA has taken issue with the impact that this would have on investment trusts and their popularity with investors as a result.
WMA deputy chief executive John Barrass said: 'Investment trusts have been a great area of growth for retail investors in this country, they are very simple to invest in as in many senses they can be bought and sold easily as you would equity in a company.'
Barrass argues that labelling such complex would mean they would then have to be accessed after an appropriateness test was carried out. This would hinder the simplicity in how investment trusts are accessed.
Barrass said: 'That will completely foul the works like throwing sand in the machine. We think its an absurdity that a product that has been successful for many years and has proved an area of growth for investors is suddenly going to be made complex for absolutely no reason.
He added: 'This issue about investment trusts is idiocy. The people writing this are people with backgrounds in regulation and who haven't worked in the markets. They are also from countries where they don't have investment trusts.
'So you have regulations being made by people about products they don't deal with on behalf of people they don't know. This is where Farage gets votes.'