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The writer is a Liberal Democrat peer and former MEP
We have all heard of the butterfly effect — where small things have non-linear impacts on a complex system. That is happening right now in the UK market for closed-end investment funds, also known as investment companies.
Should we care that the market for investment companies, which at the end of July had 377 companies and £267bn of assets, has in effect been closed by a regulatory desire for artificial tidiness? Many investors and investees are fuming that they are now blocked from investing in the productive economy. The question for the UK Treasury and the regulator, the Financial Conduct Authority, is: why haven’t you stopped the butterfly from flapping its wings?
The…
