SIB paves the way for single pricing

THE SECURITIES and Investment Board yesterday prepared the ground for 'single pricing' of retail investment funds in the UK with a discussion paper proposing that open-ended investment companies (OEICs), due to be introduced in 1995, have one price only.

OEICs will exist alongside unit trusts, which will continue with 'dual pricing', the present system in this country.

This is a compromise between the export-oriented investment management groups, led by Fidelity Investments, and the traditionalists led by M&G Group. The former want single pricing to enable them to sell their UK-based funds in Europe, where single pricing is predominant. But traditionalists want unit trusts to stick with dual pricing because they feel it is fairer to the investor and more transparent.

In a discussion paper that the SIB flagged as 'deregulatory', there was also a proposal that managers' charges should be 'liberalised' to allow retail funds to charge fees when investors cash in their funds rather than when they buy them.

The SIB also proposed that the list of restricted markets where investment funds cannot invest more than 10 per cent of their assets be replaced with a duty on the manager to choose markets that are sufficiently liquid and well regulated.