The Tax Incentivised Savings Association (Tisa) has concluded its review of the distribution funds sector.
The Financial Services Authority (FSA) and wider investment industry have expressed doubts over the potential for conflicts of interest and bias in the operation of distribution funds.
Tisa has ruled that it is possible to address the bulk of these concerns from within the existing regulatory framework.
On the subject of developing the regulatory framework, a statement by Tisa says: “These are likely to have cost implications for distribution firms and potentially product providers.
“The whole system would also be more robust in the event that only regulated entities were involved in the structure.”
The investigation also led to the recommendation that the FSA “should give consideration to allowing distribution firms the ability to charge a fee at a commercial rate for work it carries out as part of the overall governance of the distribution funds, including participation on an investment committee”.
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