The UK's Financial Services Authority confirmed in a Policy Statement published on Wednesday that it will allow fund managers more flexibility to adopt single or dual pricing of units in authorised Collective Investment Schemes.
Currently, investment companies with variable capital (ICVCs) have to value units on a single-pricing basis, while authorised unit trusts (AUTs) are able to quote either single or dual prices.
The dual-pricing method is based on one price being quoted to investors who want to buy units and a different, lower price to those who want to sell units. The single pricing method first introduced for ICVCs in 1997 is based on a mid-market value between bid and offer prices.
Dan Waters, FSA Director Retail Policy and Asset Management Sector Leader, announced that:
"No method of unit pricing is perfect or demonstrably superior to others in every situation. The flexibility we are introducing fits with the principles-based regulation we seek to operate, so that each fund manager may judge for itself how to meet the needs and expectations of investors, provided the method adopted is compatible with fundamental standards of accuracy, fairness to all unitholders, and transparency, and can be understood by investors."
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