The long history of investment trusts was highlighted by the Financial Conduct Authority on Friday as it published a consultation paper on proposed changes to the listing rules for such vehicles.

This publication follows representations by the Association of Investment Companies (AIC) industry body to the FCA amid the targeting of a raft of UK investment trusts by US hedge fund manager Boaz Weinstein’s Saba Capital Management.

The regulator’s consultation paper does not mention Saba but the relevance of the proposed changes to the type of situations in which the US hedge fund has been involved is clear.

In its executive summary of the consultation paper, the FCA says: “Closed-ended investment funds, commonly referred to in the UK market as investment trusts, are a long-standing part of the market, with a history of more than 150 years.

“These vehicles are both companies and investment products and are owned by their [shareholders]. These shareholders have the right to exercise certain controls over investment funds, based on the principle of one share, one vote. Those rights are enshrined in the law, rather than in our rules.”

Of course, many thousands of private investors are well aware of what investment trusts are, given the popularity of these vehicles for long-term savings.

However, it was good to see the FCA acknowledge how long investment trusts have been around.

Investment trusts, of course, have a proud tradition in Scotland, dating back to 1873.

In terms of recent developments, Saba, at its third attempt after other shareholders had twice succeeded in opposing its efforts, ousted the entire board of Edinburgh Worldwide Investment Trust on April 30. This board was replaced by US-based individuals nominated by Saba.

The US hedge fund’s stake in Edinburgh Worldwide was put by Jonathan Simpson-Dent in January, when he was still chairman of this trust, at “just over” 30%.

In an open letter to Edinburgh Worldwide shareholders on April 21, Saba had said: “In the event shareholders elect a newly constituted, independent board at EWI’s AGM on 30 April, Saba intends to submit itself to the board for........

© Herald Scotland