MP says KIDs’ misleading information must be addressed
During the passage of the Financial Services (Implementation of Legislation) Bill on Monday, John Baron MP asked the Economic Secretary to the Treasury, John Glen MP,
“I refer the House to my entry in the Register of Members’ Financial Interests. The Economic Secretary will be aware of our exchanges in Committee regarding EU regulations as they relate to Key Information Documents and how KIDs are adversely affecting the assessment of investment trusts.”
“The trade bodies oppose them, including the Association of Investment Companies, which has suggested that the investors’ response to them should be to ‘burn before reading’. Can the Minister report back on his deliberations with the Financial Conduct Authority, which has been rather slow out of the blocks? Ultimately, it is the Government’s responsibility to get this right.”
In response, the Economic Secretary acknowledged John’s expertise in this area and his recent article in the Investors Chronicle, and that the FCA had held a consultation on this issue, which closed last September, and is currently reviewing the responses pending publication in the first quarter of this year. The Minister promised to challenge the Chief Executive on that publication date.
John said afterwards,
“The information contained in the investment trust KIDs can be very misleading when it comes to the assessment of risk, the projection of returns, and the comparison with ‘sister’ funds. Investors could be caught in a perfect storm. Subsequent conversations with the Minister suggest the Government acknowledges the problem, and is pressing the FCA. I am also hoping to meet the FCA.”
Notes to Editors:
• For John’s earlier speeches in Committee on this issue, please see http://bit.ly/2DyQrBP and http://bit.ly/2E6w9kK.
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