UK watchdog Investments examines their battle with US hedge funds.

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The United Kingdom’s Financial Conduct Authority has been drawn into one An increasingly divided activist campaign Targeting seven investment trusts with increasing concerns over retail investor interest.

The FCA has contacted the biggest retail investment sites over their dealings with clients targeted by US activist hedge fund Saba Capital, people familiar with the matter said. The regulator wants to ensure that shareholders are aware of upcoming votes on board memberships of trusts.

FCA officials have asked Hargreaves Lansdowne, Investor and AJ Bell about how to warn clients who hold shares in investment trusts on their platforms, according to media reports.

It is managed by Saba Activist investor Boaz Weinsteinshareholders demanded a vote to dissolve the board of trustees, saying the board failed to hold investment managers accountable for poor performance.

The campaign could lead to one of the biggest shakeups of Britain’s 150-year-old investment trust industry, which has £266bn of assets under management.

Saba said. He presented his own board candidates And finally, it is considering taking over the investment management of trustees currently managed by Baillie Gifford, Janus Henderson, Herald Investment Management and Manulife.

However, the investment trust industry has raised concerns that retail investors may not vote, paving the way for Saba to take over. Saba has a stake of between 19 per cent and 29 per cent in each trust, worth a total of £1.5bn. Saba needs more than 50 percent of the vote in each trust to win.

The FCA is closely monitoring the situation and is in close contact with the investment platforms that handle relationships with investors in investment trusts, said a person briefed on the matter.

However, the rules governing votes to remove and appoint investment trust directors are set out in the Companies Act, rather than FCA regulations, so the watchdog has decided that for now these are internal matters for trusts, their boards and investors, the individual. Added.

The sector’s trade body, the Association of Investment Companies, has written to the FCA to raise concerns about the protection of shareholders’ interests.

AIC chief executive Richard Stone said: “With so much at stake, the regulator can’t just rely on people doing the right thing.” “When significant changes to investment trusts are proposed, voting platforms should proactively contact their customers.”

Stone has asked the FCA to review how board independence is determined by the listing rules. Saba said her campaign to take control of both investment trusts’ boards and become an asset manager raised conflicts of interest.

The seven faiths Saba targets are Bailey Gifford’s U.S. Growth. Edinburgh International Investment; Keystone positive change; European small companies; Henderson Opportunities; Herald Investment; and CQS natural resource growth and revenue.

Hargreaves Lansdowne and AJ Bell said they had written to trustee shareholders to encourage them to vote. Interactive Investor also said it has taken steps to allow customers to vote. The FCA declined to comment.