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International Investment Funds Association
Statement of Principles
Adopted October 21, 2005
The International Investment Funds Association (IIFA) recognizes the important role of investment funds globally and the responsibilities of such funds to their investors. The IIFA accordingly is dedicated to –
- Advancing the interests of investment fund investors;
- Facilitating the continued growth of the investment funds sector internationally;
- Promoting public understanding of investment funds around the world; and
- Encouraging adherence to sound practices and high ethical standards by all participants in the investment funds industry.
In furtherance of these objectives, the IIFA supports the following principles:
Principle 1: Investment funds should be operated at all times in the interests of their investors.
The investment funds industry is committed to working with regulators and the International Organization of Securities Commissions (IOSCO) to facilitate the development and implementation of standards that will protect investor interests and sustain and enhance the confidence of investors in investment funds. Accordingly, the industry endorses IOSCO’s ongoing efforts in areas of interest and concern to the investment fund industry, particularly with respect to the identification and articulation of best principles for investment funds. The industry welcomes the opportunity to participate in this process.
Investment fund industry associations recognize that they have an important role in fostering a commitment to sound practices and adherence to high ethical standards among their respective members. The IIFA will promote a continuing international dialogue about these important issues.
Principle 2: Investors in investment funds should be provided with the information needed for informed investment decisions.
Fund investors should have available to them accurate and understandable information required for making informed investment decisions. The investment funds industry is committed to working with regulators to encourage appropriate standards for disclosure to fund investors. Such standards should, among other things, address the needs of investors for simple, clear, and concise information in a form that permits them to compare one investment with another, and should facilitate the use of new technologies, such as the Internet, to make information available to investors in cost-effective and convenient ways.
To provide meaningful financial information to investors, any investment fund accounting disclosure standards must reflect the unique characteristics of investment funds.
Principle 3: The process by which investment funds are sold by intermediaries should be transparent and have as its goal the purchase by investors of suitable products and services.
Issues arising in connection with the sale of investment funds may adversely impact the confidence of investors in the investment funds industry. The investment funds industry accordingly supports the efforts of regulators and financial intermediaries of all types to help ensure that where advice is given it is of high quality and that appropriate information is provided, including disclosure of fees and charges and other information about any potential conflicts of interest that may arise in connection with the sale of investment funds.
Principle 4: Investment funds should be able to compete in the marketplace on a level playing field with other savings and investment products.
The investment funds industry encourages regulators and tax authorities to consider the economic implications of the regulation and taxation of investment funds, with the objective of assuring that investment funds remain a vibrant mechanism for investors to access securities markets.
Investors benefit from the disclosure and compliance required of investment funds. At the same time, investment funds should not be burdened with requirements that make it difficult for them to compete in the broader financial services marketplace.
Adopted at the XIX Annual Meeting of the IIFA on October 21, 2005