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Ouch! FCA delivers another blow to AFMs with Assessment of Value review

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 6 July 2021

Last week the FCA published the results of their review on ‘host’ Authorised Fund Management firms’ which concluded with the FCA wanting to see “significant improvements” with many currently failing to meet the FCA standards. This week, the FCA have issued their findings on the review of AFMs Assessment of Value reports. Unfortunately, this review does not provide any easier reading and delivers another huge blow to the industry.

Are you complying with the cost related provisions of the UCITS framework?

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 8 January 2021

Yesterday, ESMA announced that it will be launching a Common Supervisory Action (CSA) with national competent authorities (NCAs) on the supervision of costs and fees of UCITS across the European Union. The CSA aims to assess the compliance of supervised entities with the relevant cost-related provisions in the UCITS framework, and the obligation of not charging investors with undue costs.

During the CSA, national competent authorities will take into account the supervisory briefing on the supervision of costs published by ESMA in June 2020.

Assessing the Assessment of Value Reports

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 11 September 2020

It’s been almost a year since the FCA Assessment of Value rules came into force, and many firms would say that due to the FCA’s limited guidance thus far, they are still no clearer as to what a good value statement look like.

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.

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.

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.

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!

FCA Assessment of Value Part 2: The Impact and Implications for Firms – Lip Service or Real Change?

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 5 November 2019

In this, the second of our series on FCA Assessment of Value, we consider whether the FCA Assessment of Value process will lead to real change in product governance processes for the benefit of investors, or if firms will use this merely as a “tickbox” exercise to satisfy a regulatory requirement.

FCA Assessment of Value Part 1: Introduction

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 29 October 2019

Performance of the FCA Assessment of Value process will be a significant challenge for firms. Bringing all data together in an efficient and meaningful way will be key to the success of the FCA assessment of value process.

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