The latest update from the government on investment trust cost disclosures sets out they will not be required to produce key information documents.
The draft legislation was published on Monday (October 7), almost a month after it was announced investment trusts will be temporarily exempt from complying with cost disclosure rules.
The report said: “It is broadly accepted by industry and the government that the single aggregated figure that is being produced under current EU-inherited rules is not an accurate representation of the actual cost of investment in shares in an investment trust."
It said this instrument sought to address this issue. It added investment firms will no longer be required to disclose costs and charges relating to manufacturing and managing shares in closed-ended investment companies that are UK-listed when disclosing costs and charges information to clients.
It also set out that investment trusts, along with those advising or selling shares of investment trusts, will not be required to produce a key information document.
The legislation is not yet law and will not be until it has been agreed by the House of Lords and House of Commons.
The temporary exemption is part of government plans to replace EU-inherited Packaged Retail and Insurance-based Investment Products (Priips) regulation with a new framework for Consumer Composite Investments (CCIs).
The Treasury previously said it will bring these changes in "as soon as possible" and give the FCA powers to deliver the reform.
Ben Conway, chief investment officer & head of fund management at Hawksmoor, said: "This should put pay to any of the remaining arguments against placing zero in the ongoing cost field of the EMT or for issuing zero-cost KIDs. On the latter, platforms will have to develop their software to cope with the fact that KIDs will soon be a thing of the past."
William MacLeod Gravis' managing director for commercial welcomed the publication of the statutory instrument on Linkedin.
He added: "It directly addresses and resolves the points that so many have been working to explain for the last few years. We will watch closely as it progresses through parliament."
tara.o'connor@ft.com
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