Press Release

Commission welcomes new proposals on charity investments

23 April 2009

Following the announcement in yesterday's Budget statement, the Charity Commission, the independent charity regulator for England and Wales, has welcomed proposals to enhance the regulation of collective investment schemes for charities.

These proposals include consideration of ways to bring charity collective investments more fully under the regulation of the Financial Services Authority (FSA) and to create a new collective investment product exclusively for charities to be regulated by the FSA.This will be subject to formal consultation by the Government and the FSA later this year.

At present collective investment schemes specifically for charities are usually Common Investment Funds (CIFs) or Common Deposit Funds (CDFs) which are created and regulated by the Commission.

Under the new proposals;
· charities would benefit from the protection of the FSA's existing authorised fund regime
· all charities would benefit from collective investment schemes being authorised and regulated by the FSA
· current duplication of supervision and monitoring undertaken by the Charity Commission and the FSA would be avoided

Any new investment format considered under the proposals would retain the same tax advantages that current CIFs and CDFs enjoy.

The proposals follow discussions between the Charity Commission, HM Treasury, HM Revenue and Customs, the Office of the Third Sector, and the FSA. A public consultation on the proposals will be launched by a joint working party of these organisations.

Andrew Hind, Chief Executive from the Charity Commission said;

"This is a good example of regulatory reform in practice. As the economic world around us changes it is right that regulatory bodies look at how best they can continue to meet the needs of today's investors, and in this case charities, who play such a vital role in society."