The Investment Association (IA) has published a technical consultation regarding enhanced disclosure of charges and transaction costs.

The consultation sets out an industry code which is intended to provide a blueprint for the reporting of charges and transaction costs using a consistent approach across the UK market and in line with regulatory requirements.  As well as facilitating the provision of data under MiFID II and PRIIPs, the code is intended to be fully compliant with the final rules for the UK DC market following FCA Consultation Paper 16/30: Transaction cost disclosure in workplace pensions. The code will be adapted as necessary to the conclusions of the FCA Asset Management Market Study.

a consultation paper on a new code for enhances disclosure of charges and transaction costs (the code). The consultation paper sets out an industry code, which has the goal to develop a consistent and comprehensive framework that will allow fund and asset managers to deliver underlying charges and transaction cost information using standard definitions, regardless of the distribution channel and the way in which this information will eventually be presented to clients. The intention behind the code is also to go beyond product charge and transaction cost information to provide data on areas such as portfolio turnover, which can help provide more of a context for such information. It also covers best execution policies and use of dealing commission under new MiFID II requirements.

The consultation document is in three main parts:

  • part one sets out the context of the industry code, which is focused on providing clear information on charges and costs in the context of three regulatory work streams: the MiFID II reform package, the PRIIPS Regulation and FCA Consultation Paper 16/30: Transaction cost disclosure in workplace pensions;
  • part two sets out the text of the new industry code; and
  • part III sets out core standardised reporting templates across both segregated mandates and pooled funds. The templates are complemented by more detailed reporting approaches in specific areas, outlined in part IV. The aim is to establish consistent frameworks for reporting within the industry code on pricing policy (as applicable), best execution reporting and research payment account disclosure (as applicable).

The deadline for comments on the consultation paper is 19 May 2017.

The IA will publish a feedback statement and a final set of proposals in Q3 2017.

View Investment Association consults on new code for charges and transaction costs disclosure, 27 March 2017