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The UK’s Financial Conduct Authority has become a escalating activist campaign targeting seven investment trusts as concerns raise interest among retail investors.

The FCA contacted the largest retail investment sites in their communications with customers of seven investment trusts targeted by US activist hedge fund Saba Capital, according to people familiar with the situation. The regulator wants to ensure that shareholders are aware of the upcoming votes of the board members of the trusts.

FCA officials have asked Hargreaves Lansdown, Interactive Investor and AJ Bell how they alerted customers to the investment trust feature on their platforms, according to people with knowledge of the communications.

Loud, powered by activist investor Boaz Weinsteincalled for shareholders to vote to overthrow the trust boards, claiming that the boards failed to hold their investment managers to account for poor performance.

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

There is noise suggests its own candidates to the board and ultimately aims to take over the investment management of the trusts, currently run 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 stakes ranging from 19 per cent to 29 per cent in each of the trusts, worth £1.5bn in total. Saba needs more than 50 percent of the votes in favor of each trust to win.

The FCA is closely monitoring the situation and remains in close contact with investment platforms that manage communications with investors in investment trusts, according to a person briefed on the matter.

However, the rules governing the removal votes and appointment of directors of investment trusts are set out in the Companies Act, rather than FCA regulations, so the watchdog has decided that for now these are internal matters for of trusts, their boards and investors, the people. added.

The Association of Investment Companies, the trade body for the sector, has written to the FCA raising concerns about protecting the interests of shareholders.

“With so much at stake, the regulator can’t just rely on people doing the right thing,” said Richard Stone, chief executive of the AIC. “When significant changes to an investment trust are proposed, platforms should actively contact their clients to encourage voting.”

Stone called on the FCA to review how board independence is determined under its listing rules. He said Saba’s campaign to control two investment trusts’ boards and also become their asset manager raises a potential conflict of interest.

The seven trusts Saba targeted were Baillie Gifford US Growth; Edinburgh Global Investment; Keystone Positive Change; Small European Companies; Henderson Opportunities; Herald Investment; and CQS Natural Resources Growth & Income.

Hargreaves Lansdown and AJ Bell said they had written to the trusts’ shareholders to encourage them to vote. Interactive Investor said it is also taking steps to let customers vote. The FCA declined to comment.