IOSCO published a consultation report on Elements of International Regulatory Standards on Fees and Expenses of Investment Funds, which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes (CIS) and regulators to consider.  

This consultation report builds on the recommendations made in the 2004 paper on International Regulatory Standards on Fees and Expenses of Investment Funds. It looks at whether these standards are still valid or might be updated or supplemented in light of market and regulatory changes. The report examines and consults on issues identified as being key across jurisdictions. Such issues concern, inter alia:

  • types of permitted fees and expenses,
  • performance-related fees,
  • disclosure of fees and expenses,
  • transaction costs, and
  • hard and soft commissions on transactions.

For the current report, IOSCO conducted a second review of existing regulatory practices with respect to fund fees and expenses in order to gather information about how these practices have evolved in recent years. Since the 2004 report, the natural evolution of the industry has resulted in new CIS product structures, new investment strategies and changing distribution models, amongst other developments. At the same time, regulatory developments in some jurisdictions or at the regional level (e.g. MiFID revision) have changed the way fees and expenses are disclosed, and the effectiveness of certain disclosure models has been tested with investors. Comments are invited by Wednesday 23 September 2015.