The EU adopted a directive in January 2002, which requires investment managers to provide customers with a simplified prospectus, to accompany key features documents during the sale of investment funds. Member states were required to bring it into force by February 2004. The Financial Services Authority has proposed a new prospectus, giving investors two methods of calculating charges, but it has been criticised by the Investment Management Association, who say it will confuse customers, not make it easier to understand, and set us apart from European markets.
Our view
Red tape in the finance industry is a real problem. It is good that throughout the EU we are all working towards the same standards. The problem is that some intrepret the rules less stringently than we do in the UK. There is a paper mountain created in the UK finance industry every time new directives are adopted.