FS23/7: Long-Term Asset Funds (LTAFs) - Financial Services Compensation Scheme Coverage Feedback Statement

Read FS23/7 (PDF)[1]

In Policy Statement PS23/7[2] we set out new rules to enable a broader range of retail investors and pension schemes to appropriately access Long-Term Asset Funds (LTAFs) whilst ensuring understanding of the risks involved. 

We also asked for views on whether it might be appropriate to remove Financial Services Compensation Scheme (FSCS) cover for regulated activities relating to LTAFs, as a first step toward change with a broader consideration of FSCS coverage for non-standard assets to follow.

Who this affects

This feedback statement will primarily be of interest to: 

• consumers
• groups representing consumers’ interests
• asset managers with experience of managing illiquid, long-term assets
• depositaries
• potential investors in long term asset funds, like pension providers and trustees of DC or hybrid pension schemes, and sophisticated or wealthy investors
• investment advisers and private wealth managers
• insurers who write unit linked long term insurance contracts
• fund distributors

Next steps 

We have considered the position carefully and reflected on the feedback received. In light of this, we have decided not to take forward the proposal to exclude FSCS cover for regulated activities relating to LTAFs at this time.

We now propose to consider any changes to the scope of FSCS protection for retail investments in the round, rather than excluding activities relating to certain investment products in isolation.