Source · Select Committees · Treasury Committee
Recommendation 3
3
Not Addressed
Paragraph: 21
Concerns about risks of wider retail investment in Long-Term Asset Funds persist.
Conclusion
The Sub-Committee has raised concerns with the FCA about the risks to widening retail investment in Long-Term Asset Funds, since they are riskier non-liquid assets. These concerns are in part formed by our work looking into the failure of London Capital and Finance, and the role of promoters in potentially misusing exemptions for high net-worth individuals and so-called sophisticated investors, to garner greater sales. The Sub-Committee continues to have concerns in this area, and therefore about the protections the FCA is, in part, drawing upon for Long-term asset fund sales to a wider range of retail investors.
Government Response Summary
The government's response focuses on the Advice Guidance Boundary Review consultation to improve consumer access to affordable advice in the retail investment market, without directly addressing the specific concerns raised about Long-Term Asset Funds and protections against misuse of investor exemptions.
Paragraph Reference:
21
Government Response
Not Addressed
HM Government
Not Addressed
Delivery of the reforms will also bring benefits to consumers: the publication of the Advice Guidance Boundary Review consultation is a significant milestone in our work to create a regulatory framework that ensures consumers get the help they want, at a time they need, and at a cost that is affordable. This is a critical step in the government’s plan to build a retail investment market which consumers can trust and is sustainable for firms.