CIF regulation by FSA 'may lead to fees hike'

Finance | Gareth Jones | 29 May 2009

The proposal to pass regulatory duties for collective investment schemes for charities from the Charity Commission to the Financial Services Authority may lead to increased fees, an investment adviser has warned.

Announced in April’s Budget, the changes are designed to reduce duplication of supervision and monitoring of Common Investment Funds (CIFs) or Common Deposit Funds (CDFs) between the Commission and the FSA.

But David Bailey of Principal Charity Investment Agency told Charity Finance: “Charities are worried that the FSA will load a charge on to their investment managers, which will then be passed on in fees. “It is currently at the consultative stage so we will have to say to them that while you can charge other sectors, don’t let this happen to charities.”

The Charity Commission has welcomed the proposed changes, saying they were a “good example of regulatory reform in practice”. Boon Tong Yew recently retired from the role of manager of CIFs at the Charity Commission, but the regulator has insisted that it retains “the resource and expertise necessary to ensure that related work is carried out effectively”.

Also proposed is the creation of a new collective investment product exclusively for charities, to be regulated by the FSA, which would retain the same tax advantages that CIFs and CDFs currently enjoy.

Meanwhile, it will shortly be announced that Bailey is taking up a part-time role with Cordea Savills, which manages both the Charities Property Fund and the Accommodation Investment Fund for Charities.

Who's Who: Gareth Jones

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