CoCos off the menu

CoCos off the menu

Retail investors will not be buying contingent convertible bonds (CoCos) any time soon, thanks to the Financial Conduct Authority (FCA).

This week it began consulting on whether to make permanent a temporary ban on the distribution of contingent convertible securities to the retail market. That said, the FCA announcement last week did spark a number of questions about who would be affected, according to TwentyFour Asset Management. The firm reported: “On first look, it did appear that retail investors might not be allowed to invest in any funds that held CoCo bonds.” On second reading, however, it appears that, while its language may be unclear in places, the FCA has taken a moderate view. It is only funds focused on C...