FCA • Funds-Axis Limited

The Liquidity Countdown

Regulatory Insights, Risk MonitoringBy Trevor Dempster 27 May 2020

Fund liquidity problems witnessed in 2019 with Woodford and H2O Asset Management brought liquidity back into the spotlight. Since then, the focus hasn’t really faded on the issue of liquidity, and if anything, has intensified with the COVID-19 pandemic causing market volatility resulting in several more fund suspensions.

Although 2020 has already seen a number of initiatives intended to address liquidity risk, there are still more to come, with September due to be a particular busy month for risk management professionals.

Short Selling Bans – More Harm Than Good?

Investment Compliance, Regulatory InsightsBy Trevor Dempster 20 May 2020

With the recent market volatility caused by the COVID-19 pandemic, regulators across the EU and in some jurisdictions further afield have been banning short selling for varying periods. Although there are many who are sceptical of the benefits of short selling bans, several EU states including France, Italy, Spain and Austria had bans in place since March with Italy’s CONSOB opting for a ban until 18th June. Germany, along with Britain which still operates under EU rules, held back in imposing market wide bans.

FCA Assessment of Value – what have we seen so far?

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 20 April 2020

Under the FCA’s Asset Management Market Study, the final report of which was published in June 2017, the City watchdog determined that price competition is weak in a number of areas of the industry.

Liquidity Risk: A 2020 Priority

Regulatory Insights, Risk MonitoringBy Trevor Dempster 30 January 2020

Firms must have appropriate systems, controls and governance to oversee and manage liquidity risk. With the New Year well and truly underway, regulators across the globe have started publishing their priorities for the year ahead. Unsurprisingly, liquidity risk appears to be high up on most of their agendas

FCA Assessment of Value Part 6: Wolf in sheep’s clothing – how to spot a closet tracker

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 19 December 2019

A number of key regulators including ESMA, the CBI and the FCA have reviewed the market for potential hidden “closet tracker” funds and published their findings, with a number of funds providing inaccurate information in their investor disclosure documents as regards investment strategy.

FCA Assessment of Value Part 5: The US approach – what can be learned

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 17 December 2019

While the FCA’s Assessment of Value (AoV) process is a new development in the UK market, a similar requirement on mutual funds has been in place in the United States for considerable time. The approach in the United States provides some useful comparisons to the new UK regime. The US fund governance model requires under Section 15c of the US Investment Companies Act 1940 for US fund boards to conduct an assessment on the fund managers using a number of factors commonly known as the Gartenberg Principles.

Should illiquid assets be held in open ended funds?

Regulatory Insights, Risk MonitoringBy Trevor Dempster 9 December 2019

Fund liquidity, like a mirage in the desert, can disappear in an instant if not monitored and managed correctly. Events throughout this year have brought fund liquidity to the forefront – as we approach the end of 2019, it is clear we haven’t seen the last of liquidity risk in the headlines.

FCA Assessment of Value Part 4: Where Next?

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 27 November 2019

Whilst UK AFMs are currently busily engaged in the FCA Assessment of Value process of preparing their first reports, in this blog we give some thought as to where the FCA Assessment of Value requirements are likely to take us over the next few years.

Introduction to Derivatives Use Reporting

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 25 November 2019

With the FCA derivative use reporting deadline fast approaching, it’s the perfect time to discuss the reporting requirements and how Fund-Axis can assist you in making your filings. In 2016, the UK Financial Conduct Authority (FCA) made changes to its Collective Investment Schemes (COLL) sourcebook. The changes introduced a new report which revised the Derivative Risk Management Process (DRMP) report and included the information required by FCA Rule COLL 6.12.3AR on derivatives/risk management process.

FCA Assessment of Value Part 3: At What Cost?

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 22 November 2019

The FCA’s terminology is FCA Assessment of Value, a shift from the earlier terminology of “Value for Money” which the FCA felt focused too much on the AFMs costs. Therefore, the focus from fund managers needs to be on the full value proposition for investors rather than focusing only on fund charges. Good value does not necessarily mean low cost!

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