TISA has published a guide for asset managers and distributors which will help with costs and charges disclosures in preparation for new MiFID II requirements, the legislation that comes into force in January 2018.
The guide, which was written by organisation's executive committee with input from 70 firms, is intended to provide an industry-wide approach to the practical aspects of implementing the changes and to provide guidance about recommended good practice.
The investments and savings membership group's guide offers examples of how pre-sale and post-sale reporting could be presented to investors, with the intention of making disclosures as clear and as straightforward as possible.
MiFID II, which comes into force on 3 January, requires investment firms to inform investors of expected costs "in good time" before an investment decision is made. Firms are then required to disclose actual aggregated costs of transaction, annually on a personalised basis.
For both pre- and post-execution disclosures, costs should be aggregated and expressed as a monetary amount and a percentage, with third party payments, such as research acquisition, shown separately.
TISA's guide provides guidance for these requirements, as well as more technical aspects to their implementation. For fund of fund's the guide also offers guidance on the requirements to take account of the underlying funds' ongoing charges.
Commenting on the guide, TISA technical policy director Jeffery Mushens said that cost and charges disclosures present "some of the most difficult technical challenges to firms, whether asset managers, distributors or advisers", with regard to MiFID II.
He said: "FCA objectives highlight the need to enable investors to receive clear and simple information about the costs they pay for asset management services.
"We believe the benefits for investors from this guide will be the adoption of a standardised way of showing the costs and charges of investing, from investing in market securities through asset management costs and the costs of distribution and advice."
TISA said it is also currently scoping an industry-led project with investment and infrastructure providers to develop a common solution to the collection and distribution of investment fees, charges and target market information.
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