The IMA has submitted its response to ESMA's paper on guidelines for UCITS Exchange-Traded Funds and Structured UCITS.
The IMA questioned ESMA's rationale for singling out certain types of UCITS products while excluding others, such as non-UCITS Exchange-Traded products.
Commenting, Julie Patterson, Director at the IMA, said:
"UCITS are already subject to detailed regulation. Regulatory intervention should happen only where there is a clear market failure, but we see no evidence of this.
"Regulators are concerned about ‘complexity' in retail products. But complexity does not necessarily equate to risk. Sophisticated investment strategies often mean less risk for investors in terms of the expected return.
"We agree with ESMA's proposed approach - to improve disclosures and to provide clearer information for investors via the new Key Investor Information Document. For UK-authorised funds, such disclosures are already required. We urge national regulators to adopt consistent implementation and to enforce the UCITS rules.
"If it is thought that certain areas of the UCITS product rules should be reviewed, then it is essential that all retail investment products are considered. All retail products should be subject to similar rules on disclosure and selling. The European Commission's PRIPs initiative seeks to achieve just that, but we are concerned that it is being treated with lower priority than it warrants."
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