The U.K. Investment Association is seeking comments on an industry code to standardize the disclosure of money management fees and transaction costs.
The trade body, which represents money managers with more than £5.7 trillion ($7.1 trillion) in assets under management, said its proposed code provides a blueprint for reporting fees and transaction costs, using a consistent approach across the market and in line with regulatory requirements.
The consultation paper sets out core standardized reporting templates covering management fees; investment transaction costs — both explicit and implicit; securities lending revenues and costs; and contextual information, such as performance, trading volumes and turnover. These templates are complemented by more detailed reporting approaches in specific areas.
The aim is to establish consistent frameworks for reporting within the code, covering pricing policy, best execution reporting and research payment account disclosure.
The IA wants to hear from money management firms’ clients as well as to whether the recommended disclosures help them in decision-making when it comes to setting and reviewing investment strategies. The paper asks seven questions of respondents, including whether there should be further granularity in relation to asset classes and implicit costs.
“The new code provides for the first time a common framework for enhanced disclosure across investment products and services,” said Jonathan Lipkin, director of public policy at the IA, in a statement accompanying the consultation paper. “It is a major opportunity to consistently define and provide data on charges and transaction costs.”
The IA will review all feedback before publishing a statement and final set of proposals in the third quarter. It will propose to the Financial Conduct Authority that the code is recognized in its conduct of business sourcebook. During the consultation period, the IA will also discuss with regulators and its advisory board how to put in place an ongoing governance structure that allows industry, client groups and regulators to monitor its success, and to identify areas for further development over time.
The deadline for responses is May 19, and the consultation paper is available on the IA’s website.
