The PLSA has opposed FCA plans to reclassify local authority pension funds as retail investors.
Local authority schemes are currently classed as ‘professional’ investors, but the Financial Conduct Authority is proposing to change their status as part of its plans for implementing the new edition of the Markets in Financial Instruments Directive (‘MIFID II’).
The PLSA is concerned that the new approach does not reflect the experience and expertise of local government pension schemes and would have serious implications for their ability to manage their investments in line with their pension fund liabilities. It could impair their ability to invest in certain asset classes, such as infrastructure.
The PLSA has proposed that the FCA distinguishes between the investment activity of local authorities and local authority pension funds, so the latter may retain per se professional client status.