Further to our blog last month, the FCA has now published its updated policy statement on MiFID II implementation.
Despite ESMA stating that any fund that is not a UCITS is deemed to be complex, the FCA has reiterated what it said last year in its Consultation Paper CP16/29, which was that investment trusts and Non-UCITS Retail Schemes (NURS) are neither automatically non-complex nor automatically complex and that each one should be considered against the criteria set down in the MiFID II delegated regulation.
The rules in the FCA’s latest policy statement are final and the reiteration was made in full knowledge of ESMA’s stance, so we can be confident that this will be the position in the UK on implementation of MiFID II in January 2018.
This is great news for the investment trust industry and managers of NURS funds, but could potentially lead to a situation where they are regarded as non-complex in the UK – and can therefore be sold without advice or an appropriateness test – but treated as complex by a regulator (and distributors) in another EU country.