Last month the Financial Conduct Authority (FCA) launched a consultation paper (CP22/14) on broadening access to the Long Term Asset Fund (LTAF) to a wider group of retail investors and pension schemes.
The regulator recognises that some retail investors are keen to invest in non-traditional investments, either for diversification reasons or because these investments could deliver higher returns. This comes with a risk however that some investors may not fully understand the illiquid nature and corresponding risk of the underlying assets.
The consultation paper therefore sets outs the FCA's proposals for broadening the retail distribution of the LTAF to more categories of retail investors, whilst including further investor protections and ensuring investors understand the financial risks involved. One of the main proposals is to treat the LTAF as a Restricted Mass Market Investment (RMMI) and allow retail investors’ access to a range of assets, including private equity, private debt, property and infrastructure.
The consultation will end on 10th October with the FCA aiming to publish a final policy statement and final Handbook rules early in 2023.