A Big Bang moment for bonds?
19th May 2023 14:44
by Sam Benstead from interactive investor
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interactive investor responds to FCA engagement paper on non-equity securities.
interactive investor, the UK's second-largest platform for private investors, comments on this week’s engagement paper from the FCA on non-equity securities, which could pave the way for wider retail access to bonds.
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Sam Benstead, Bonds Specialist, interactive investor, says: “Bonds are back - as this week’s timely FCA consultation paper illustrates. Whether it is fixed income or money market funds, private investor appetite has continued to endure well after the dust has settled on that infamous mini-budget, as rising interest rates have fed through into higher bond yields. We have been stepping up our customer editorial on bonds since spring 2022, in anticipation of this new interest rate environment, publishing responsible and educational content in this often complex area of the market.
“We have long campaigned for fair retail access to stock market IPOs and secondary issues, and it’s right that the FCA look at broadening access to assets such as bonds, and with more choice for smaller scale retail investors.
“But this is unlikely to be a ‘Big Bang’ moment for bonds, due to the levels of sophistication required when it comes to the often complex world of fixed income. Passing disclosure of retail investor-focused risk warnings to the firm concerned, rather than the issuer, is a reminder of the complexities and potential risks involved.
“Many retail investors will prefer to access this market via diversified, professionally managed funds, and we are starting to see these crop up more frequently in our monthly best buys. But investors deserve choice and fair access, and we welcome this week’s paper and look forward to engaging.”
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