Today, 17 December 2018, ShareSoc and the UK Shareholders Association submitted to the FCA a joint response on behalf of individual investors to this consultation. The key points we made were:
UKSA and ShareSoc represent the 5 million people who own shares and have investment accounts with platforms in the UK. We represent the individual investors who own 12% of the UK stock market: they own 30%, if you include their investments via funds, pensions, etc.
Our view is that better labelling of these products is needed.
Much of the proposals/consultation is all a bit ‘nanny state’. Any retail investor who invests in this type of investment surely should know about the potential problems of liquidity. Ten minutes on Google would inform him/her. We are not convinced this extra regulation is necessary. Better labelling may be a simpler and cheaper solution. Better labelling may well encourage the market to solve the problem without loads of extra regulation and so remove the need for our recommendation on banning illiquid investments from open ended funds.
The problem with regulators is that they tend to recommend more regulation. This may be a case in point.
The complete response can be downloaded and read here UKSA-ShareSoc response to Illiquid Assets consultation FINAL 181217
The response was written by Cliff Weight and Peter Parry.