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Unregulated Collective Investment Schemes (UCIS): Proposed Changes

The Financial Services Authority (FSA) has today published proposals which would see the promotion of Unregulated Collective Investment Schemes (UCIS) and close substitutes being restricted to generally those retail clients who are either sophisticated investors or high net worth individuals.

Although UCIS may not be promoted to the general public, the FSA’s supervisory work has shown that many advisers are not complying with the current rules. A review by the FSA has also found that just one in four advised sales of UCIS to retail customers was suitable for that customer’s needs and requirements. Such miss-selling is particularly problematic as UCIS are not regulated by the FSA and investors do not have recourse to the Financial Ombudsman or Financial Services Compensation Scheme should things go wrong.

The FSA’s proposals are contained in a consultation paper which can be found by clicking here. The consultation closes on 14 November 2012.

The feedback received from the consultation will be published in an FSA Policy Statement which will also set out the finalised rules and guidance. The anticipated date of this publication is the first quarter of 2013.

For further information, please contact Toby Stroh by email at t.stroh@druces.com

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