True and Fair Campaign wins MEP’s support for introduction of EU online savings calculator

Concept of online savings calculator to be discussed by European Parliament’s Economic and Monetary Affairs Committee

The True and Fair Campaign (www.trueandfaircampaign.com), which was initiated just over a year ago by British investment manager SCM Private (‘SCM’), has welcomed two amendments to the European Commission’s proposal for regulation on a new Key Information Document.

The amendments were tabled by Sharon Bowles MEP, UK Liberal Democrat and Chairman of the European Parliament’s Economic and Monetary Affairs Committee, and are designed to call on the European Securities and Markets Authority (ESMA) to introduce an online financial calculator.

The True and Fair Campaign has been calling on UK and European politicians, regulators and fund providers to introduce a new labelling system that will give consumers 100% transparency on all transaction costs and management fees and full disclosure on where funds are invested. It believes that an online savings calculator will allow investors to check fees and costs, in percentages and monetary amounts, and to directly compare products between fund providers.

Sharon Bowles MEP, UK Liberal Democrat said, “I am very keen to ensure the highest level of investor protection for European consumers and the full transparency of costs. The introduction of an online fund calculator at European level is a very interesting and thought-provoking idea as it would allow investors to check for themselves, and to directly compare, the information which is provided to them by fund managers. I have tabled amendments on this topic to ensure we will have a thorough debate on it in our Parliamentary committee.”

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Gina Miller, who spearheads the True and Fair Campaign and founded SCM Private said, “We wholeheartedly congratulate Sharon Bowles MEP in taking our amendments on board and launching a discussion on the online savings calculator, to help European consumers be fully informed on the costs associated with their savings and investments so they can make better choices for themselves.

“In April we will be launching The True and Fair Savings Calculator in the UK with fees and costs presented in pounds and pence as well as a percentage of their overall investment. Consumers will be able to enter information on the expected duration of their investment, the amount, and the assumed underlying investment return in order to determine the end value of the investment after costs.”

The amendments tabled by Sharon Bowles MEP are:

Amendment 116:
(11 b) ESMA should develop an online fund analyser, similar to that created by FINRA in the United States, which would allow investors to calculate the end value of their investment after fees and costs have been taken into account.

Amendment 390:
Under the section entitled ‘what are the costs’, she adds that information shall be provided on how to access the independent online fund calculator operated by ESMA.

Amendment 436 (new amendment):
3 a. ESMA shall develop an independent online fund calculator which will be included on its website. The fund calculator shall allow investors to compute the reward of a proposed retail investment product by entering information on the expected duration of the investment, the amount of the investment, and the assumed underlying investment return in percentage terms in order to determine the end value of the investment after costs.

The fund calculator shall include in its calculation the costs and fees charged by the various investment product manufacturers for any fund sold to the public, together with any further costs or fees charged by intermediaries or other parts of the investment chain, not already included by the product manufacturers.

Investment product manufacturers and persons recommending or selling investment products shall be required to submit relevant data to ESMA on a quarterly basis, with a maximum delay of 60 days for this purpose.

ESMA shall be provided with the resources with which to carry out this work. It shall work closely with the other European Supervisory Authorities where necessary.

The True and Fair Code
Company XYZ commits to providing clients with a full breakdown of all fees incurred during the investment of their money, including management fees and all underlying costs or charges.

Company XYZ commits to providing clients with a full online breakdown of all holdings held directly, as well as indirectly (e.g. individual assets held as collateral against securities lent out), together with a full percentage breakdown, online, on at least a quarterly basis.