VCTs 'face 75% fundraising squeeze' if caught by UCIS ban

Venture capital trusts (VCTs) are facing the prospect of a steep decline in fundraising if they are not granted an exemption from the FSA's ban into the sale of unregulated collective investment schemes (UCIS) to retail investors.

Last month a consultation paper from the FSA entitled ‘Restrictions on the retail distribution of unregulated collective investment schemes and close substitutes', set out proposals to ban the promotion of UCIS and similar funds to ordinary retail investors in the UK. VCTs were not specifically mentioned in the proposals, although investment trusts were granted an exemption, suggesting providers of these products could face a ban on promoting them to retail investors. A survey of leading VCT managers, carried out by wealth manager Bestinvest, warns fundraising could collapse by 75% if...