The International Organization of Securities Commissions (IOSCO) has published its final report on good practice for fees and expenses of collective investment schemes. The examples of good practice in the report include those previously published in 2004, and new examples. The key differences and enhancements relate to:
- defining permitted and prohibited costs and how new or increased fees should be approved and/or notified to investors;
- more detail on the calculation of performance fees;
- the provision of summarised information to investors on key elements of fees and expenses;
- the use of electronic media for disclosing information to investors about fees and expenses;
- more disclosure about types of costs charged to collective investment schemes (CIS) as transaction costs;
- ways to manage and disclose conflicts of interest in the use of soft commission arrangements;
- disclosure of how soft commission arrangements are used;
- disclosure of double charging structures when one CIS invests in another; and
- more detail about keeping information on fees and expenses up-to-date and giving investors adequate notice of material changes.
Annex 4 of the report contains a summary table showing the examples of good practice from the earlier 2004 report alongside the revised and expanded examples.
View IOSCO good practice for CIS fees and expenses seeks to enhance market efficiency, 25 August 2016