The Investment Association (IA) is asking for public feedback on its industry code aiming at standardising the disclosure of charges and transaction costs in the asset management sector.
The IA hopes the code will provide a consistent approach to the reporting of charges and transaction costs across the market and in line with regulatory requirements such as the upcoming MiFID II and Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation.
The trade body for investment managers wants the code to adapt to the conclusions of the Financial Conduct Authority’s (FCA’s) Asset Management Market Study currently underway.
It is also aiming for the code to be fully compliant with the FCA’s final rules and guidance for the UK defined contribution market to improve the disclosure of transaction costs in workplace pensions, known as CP16/30.
IA director of public policy Jonathan Lipkin (pictured) said: “The new code provides for the first time a common framework for enhanced disclosure across investment products and services. It is a major opportunity to consistently define and provide data on charges and transaction costs.
“The IA would like to work with the FCA to seek regulatory recognition for the new code in the FCA’s Conduct of Business Sourcebook.”
The creation of the code has been assisted by an Independent Advisory Board, set up in July last year and made up of senior individuals from the UK pensions industry and representatives from consumer bodies, including the National Employment Savings Trust and the Transparency Task Force (TTF).
The board has issued an interim report on progress so far and an outline of future work.
Lipkin added: “This consultation is designed to encourage feedback from industry, consumer, government and regulatory bodies on the proposed approach ahead of the code’s final implementation and we welcome views from all stakeholders.”
Pensions and Lifetime Savings Association (PLSA) director of external affairs Graham Vidler welcomed the consultation, adding the organisation would respond to it with a focus on “ensuring that the code permits consistency and comparability”.
He added: “The PLSA has always recognised the importance of understanding transaction costs in order to ensure value for money on behalf of scheme members; and it’s good to see the IA taking steps to standardise disclosure.
“We urge our members and the pensions industry as a whole to respond to this important consultation.”
The closing date for consultation responses is 19 May. The IA will then review all feedback and publish a final set of proposals in Q3.
Earlier this month, the TTF accused the IA of designing the code purely for the benefit of its own part of the market.
TTF founder Andy Agathangelou said: “We believe this type of approach may result in inconsistency, confusion and even the potential for ‘gaming’; issues so serious that they have the potential to undermine the efficacy of a robust regulatory framework.”
The IA hit back, saying its new disclosure code would be subject to “full public and regulatory scrutiny” before being adopted. It also noted that the TTF had given input to the code via the Independent Advisory Board.
