A Treasury consultation has concluded that further regulation of Investment trusts is not necessary. The proposed options by the Treasury Select Committee for further regulation, were to either regulate investment trusts in the same way as unit trusts, with both the product and directors of the trust requiring Financial Services Authority (FSA) authorisation, or to consider investment trusts as collective investment schemes where the person, but not the product requires (FSA) authorisation.
The committee also questioned whether to make establishing, operating or winding up an investment trust regulated, which meant that only an authorised person could carry these out. The Treasury believe that they could not achieve better regulation, and that changes to the rules by the FSA as well as improvements to governance standards from the Association of Investment Trust Companies would achieve sufficient standards all round for investment trusts.
Our view
We agree. Regulation in the UK is already, despite its faults, probably the toughest in the World. Why do you think that London is the biggest finance centre on the planet?