On 31 October 2024, the House of Lords Financial Services Regulation Committee (the Committee) published a letter dated 2 October 2024 from Baroness Altmann regarding listed investment companies and cost disclosure.

The letter encloses a submission to the Committee which was compiled in response to evidence given by the Financial Conduct Authority (FCA) to both the Committee and the Treasury Select Committee during the last Parliament. Baroness Altmann explains that, in relation to the cost disclosure regulations imposed on UK listed closed-ended investment companies, it seems there were some ‘serious errors’ in the evidence provided to the Committees. Following her engagement with a large group of industry experts and a legal team on this issue, Baroness Altmann says it is felt that the records should be corrected, and she encloses the submission for the Committee’s consideration and information so that the incorrect evidence given to and published by the Committee does not remain on the record unchallenged.

The submission includes:

  • Responses to the points made by the FCA on 8 May 2024 to the Committee and the Treasury Select Committee, explaining why industry participants disagree with some of the FCA’s key statements.
  • A summary of a legal argument setting out the basis for re-interpreting the existing UK version of Commission Delegated Regulation (EU) 2017/565 so far as cost disclosure in respect of London-listed closed-ended investment companies (LCICs) is concerned, and de facto forbearance allowing investors to stop including costs/expenses of LCICs in their own reportable costs in the European MiFID Template.