The Financial Conduct Authority (FCA) is preparing to enforce new absolute return disclosure requirements but has opted not to implement the more stringent proposals some had recommended.
Funds using descriptions such as ‘absolute return’ and ‘total return’ must now clearly specify in their prospectuses’ investment objectives that capital is at risk, while they must also include the period over which they aim to produce a positive return. They must also emphasise there are no guarantees a positive return will be achieved over any time period. The FCA consulted a number of trade bodies before publishing the rules, with the Investment Management Association (IMA) warning last December it was “concerned about the effectiveness” of the proposals. The trade body noted th...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes