Investment Management in Financial Services UK

Costs and charges in the asset management market study: the FCA goes “all-in” for transparency

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The FCA recently published its final report on the asset management market study (see our briefing here). One of the headline features was the proposed “all-in” fee. There has, however, been some uncertainty on where the FCA’s proposals stand in relation to forthcoming EU legislation which will, in any case, require an aggregated fee disclosure. This brief aims to shed light on this where possible.

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Posted on 25/07/2017 | 0 Comments

FCA asset management market study - Boosting competition amongst asset managers through sharper accountability and disclosure

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The Financial Conduct Authority (FCA) has published its much anticipated final report of its Asset Management Market Study. Although many of the proposals were trailed in the interim study, and remain subject to consultation, the report is wide-ranging and is likely to have a far-reaching impact on the asset management industry. Importantly, the FCA has detailed new proposals on governance arrangements, requiring that the Board oversees obligations imposed on fund managers prescribed through the Senior Managers Regime around acting in the customer’s best interests.

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Posted on 29/06/2017 | 1 Comments

Are you ready for 1 January 2018? - Finalised PRIIPs RTS and imminent guidance pave the way for firms’ PRIIPs programmes

Image1Many firms have swiftly resumed their PRIIPs programmes following the entry of the final Regulatory Technical Standards (RTS) on the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) in the Official Journal of the European Union, on 12 April 2017. The Regulation requires the disclosure of Key Information Documents (KIDs) when PRIIP products (such as funds, insurance investment products, structured products and structured deposits) are sold to retail investors.

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Posted on 20/06/2017 | 0 Comments

The EU’s third-country CCP proposals — when is clearing not so clear?

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On 13 June, the European Commission released the second set of proposed amendments to the European Markets Infrastructure Regulation (EMIR) on the recognition and supervision of third-country CCPs.

The proposal represents a fundamental overhaul of the EU’s approach to the recognition and supervision of third-country CCPs (the UK will be a ‘third country’ once it leaves the EU and assuming it does not join the EEA). It includes extensive and intrusive supervisory and enforcement powers for the European Securities and Markets Authority (ESMA), a significant new role for the European Central Bank (ECB) and an ability to require the most systemically significant third-country CCPs to establish themselves in the EU as a condition for providing their clearing services to EU clearing members and their EU clients. Overall the framework provides ESMA, the Commission and the ECB with very wide-ranging discretion in relation to third-country CCPs.

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Posted on 19/06/2017 | 0 Comments

IFRS 9: Regulators urge improvements, but where should investments be made?

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Credit Institutions are currently in the process of implementing solutions in response to the IFRS 9 Standard. In doing so, firms are preparing to navigate the numerous pitfalls of legacy systems and risk processes to deliver Expected Credit Loss (ECL) in a controlled and governed environment. The change in the way impairment is accounted for under IFRS 9, not only denotes a change in the way that information is used in order to measure ECL, but also signifies a transformation in operating models.

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Posted on 16/06/2017 | 0 Comments

Senior Managers Regime - Amendments and Optimisations

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The PRA recently published a Policy Statement confirming amendments and optimisations to the current Senior Managers Regime (SMR) which applies to banks, building societies, credit unions and PRA-designated investment firms (referred to as Relevant Authorised Persons – RAPs) and to the current Senior Insurers Managers Regime (SIMR).

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Posted on 09/06/2017 | 2 Comments

New rules on prompts to encourage shopping around in the annuities market: concerns raised over FCA reforms

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On 26 May, the Financial Conduct Authority (FCA) published a policy statement on implementing information prompts in the annuity market. The FCA had consulted on this topic in November 2016, following a number of findings in its Retirement Income Market Study (published in 2015), which concluded that the retirement income market was not working well for consumers.

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Posted on 06/06/2017 | 1 Comments

A focus on vulnerability and competition: What firms can expect from FCA following the publication of its Mission and Business Plan 2017/18

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On 18 April 2017, the Financial Conduct Authority (FCA) published several important documents, including its Mission, Business Plan 2017/18 and – for the first time – Sector Views. Together, these documents are intended to provide a complete picture of the way the FCA identifies and assesses risks, and hence identifies its regulatory priorities, in the sectors that it regulates. 

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Posted on 05/05/2017 | 0 Comments

EU Benchmark Regulation: Are you ready for implementation?

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The European Commission’s Regulation on indices used as financial benchmarks in financial instruments and financial contracts (the Regulation) forms part of the EU’s response to a series of high profile investigations in recent years into the alleged manipulation of key financial benchmarks, including LIBOR. These investigations raised concerns over the reliability and integrity of financial benchmarks, which underpin transactions worth trillions of dollars. The Regulation aims to reduce the risk of manipulation, bolster the reliability of benchmarks administered and ultimately provide a safer environment for the use of benchmarks in the EU.

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Posted on 30/03/2017 | 4 Comments

No margin for error: Making the margin requirements for non-cleared OTC derivatives happen

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The implementation of the mandatory exchange of initial and variation margin for non-cleared OTC derivative trades in the EU commenced on 4 February for financial counterparties with the largest derivatives portfolios. The introduction of these rules – which was part of the G20’s mandate to reduce the systemic risk posed by the OTC derivatives trading – is expected to lead to an increase in the cost of trading for non-cleared trades.

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Posted on 09/03/2017 | 0 Comments