Ros Altmann (pictured), is a member of the House of Lords, who earlier this year tabled a Private Members Bill to remove investment trusts from AIFMD.
Hopes of resolving the investment trust cost disclosure issues are facing a further setback, as progress on Ros Altmann’s private members bill has been lost following news of Prime Minister Rishi Sunak's snap election.
Altmann, a member of the House of Lords, initially introduced her bill in November 2023. After successfully passing through all three readings in the upper chamber, the bill was scheduled to be sent to the House of Commons for debate.
However, Altmann confirmed to Investment Week the bill had not been transferred over before Sunak called a general election, meaning it was not up for inclusion in the 'washup'.
All public bills that have not completed their parliamentary stages are effectively dropped and have to start again from the beginning, a parliamentary spokesperson explained.
Ros Altmann: The damaging bias against UK investment companies
"I am afraid my bill is now lost and I have to start the process all over again," Altmann said.
Her bill had called on the government to remove investment companies from the Alternative Investment Fund Managers Directive (AIFMD) regulation and for the removal of the current EU cost disclosure rules, known as PRIIPs, which have caused investment trust charges to appear artificially expensive.
Altmann has consistently campaigned for a change in the rules she has described as "madness and such a spectacular regulatory own goal, the opposite of Consumer Duty requirements".
"The current regime does not properly inform consumers, and disclosures are unclear, unfair and misleading," she argued, claiming it had led to a "buyers strike" against UK investment companies.
Industry backs House of Lords call to reform 'misleading' investment trust cost disclosure
Her bill received cross party support as well as backing from the asset management industry, with trade bodies and fund groups echoing her calls for cost disclosure reforms.
For the motion to be put in front of the government, it will now have to be resubmitted for ballot in the next session.
However, the Treasury spokesperson said there was currently "no fixed date" for when new ballots could be tendered, as parliament was set to adjourn on 25 July after the new government is sworn in.
The spokesperson also confirmed there was no guarantee Altmann's motion would be selected for the ballot again, even if the new bill was filed verbatim from the old.
Timeline of change uncertain
While it is not known which party will be tackling the cost disclosure issues for some weeks, CEO of the Association of Investment Companies Richard Stone said there was "no reason to think that any incoming government will not restart the process of repealing PRIIPs and MiFID: the question is one of urgency".
"It is essential that this is a priority for the new government," he said.
Stone shared Altmann's frustrations about the bill's new delays: "We have already waited over four months for the Treasury to reach a conclusion on its consultation on the scope of a new disclosure regime."
Altmann said the "best hope" while she waited to resubmit her bill was for either the Financial Conduct Authority or the whichever government comes to power to "wake up to the damage it is doing and force them to see sense".
Back in November last year, Chancellor Jeremy Hunt said the Treasury was pressing the FCA to develop short-term solutions to resolve the sector's cost disclosure issues to avoid "unnecessary delays", to which the regulator set out temporary forbearance measures later the same month, allowing trusts to further explain their costs and charges.
But the regulator is prevented from making further progress on the matter by current laws.
A spokesperson for the FCA said: "Further changes to cost disclosure rules require legislation. We have gone as far as we can without that change in the law to give investment trusts greater flexibility."
Hunt previously omitted any timetable for legislative enactment, unwilling to provide timeframe on investment trust cost disclosure reforms at a Treasury Committee hearing in March.
The FCA's current measures were ultimately short-term options, and Stone said that a conclusion needed be reached on the scope of the new regime and powers passed to the FCA to pursue full scale reforms.
"We see no reason why this could not happen to the timetable suggested by FCA CEO Nikhil Rathi, with a consultation by the autumn, but it will require immediate attention from the new government who inevitably will have a long ‘to do' list," he said.
