The Investment Management Association (IMA) has said more than a tenth of the funds in its sectors breached the sector definitions last year, although a majority corrected the breaches soon after they were discovered.
Jane Lowe, the director of markets at the IMA, says 234 funds last year breached the rules as revealed by their monthly data submissions. The IMA sectors currently contain 2,409 funds.
The IMA writes to inform companies of breaches and removes funds from sectors after three monthly breaches in a row.
The IMA is currently revising the principles by which its sectors are defined and funds included and excluded, particularly given the difficulty of classifying funds that use derivatives.
It is also helping the Association of British Insurers (ABI) redefine the ABI’s managed sectors, which could have an impact on the IMA’s assessment of its own managed peer groups. (article continues below)
It is also considering introducing information on its website to help users search within its sectors, especially within sectors which are large and diverse.
However, this feature is not likely to be introduced until late next year, after the IMA’s sector consultation has concluded.
Note: This article was updated at 4.45pm.