10% Investment Value Fall Rule Waived For Another 6 Months

You may or may not be aware that investment fund management companies are required to notify you if your investment falls 10% in value since its value was last reported to you.  This should be done by the end of the day on which your investments have fallen by 10% or more.

Given the volatility in March after the stock market crash and coronavirus taking hold, the Financial Conduct Authority (FCA) announced a suspension of the requirement to report 10% falls for 6 months from 1^st April 2020.

Yesterday, the FCA confirmed an extension of the suspension of the requirement to notify 10% falls for the time being provided that the following actions have been taken by investments firms:

1. Notified clients exactly how they can check the value of their investments
2. Signposted clients to published areas for information about investments, markets, volatility, sentiment, economical conditions etc
3. Sent at least 1 notice during the period of a 10% or greater fall
4. Advised clients that no further updates will be issued for the time being

Comment

We suggest most people are already aware that there is both a pandemic and economic crisis.  That said, it is still better practice to notify people of 10% falls in the value of their investments but equally we suggest they should perhaps also get a notification when their investments grow by 10%, just in case they want to profit take, move to being defensive or indeed go more aggressive.