FCA's 2018/19 Business Plan and related publications
The FCA published its Business Plan for 2018/19 [09.04.2018] containing "key priorities" for the coming year. These "reflect the high level of resource the FCA needs to dedicate to European Union withdrawal, given its impact both on our regulation and the firms we regulate" the FCA said. Accordingly, "this inevitably affects the amount of work we can undertake in other areas. As a result, agreeing our 2018/19 priorities has involved particularly rigorous scrutiny and challenge" according to Andrew Bailey, FCA Chief Executive. In addition to EU withdrawal work (such as working with the UK's Government and regulated firms, as well as on the transition of EEA firms, and ensuring the FCA's "operational readiness" for Brexit) the FCA set seven "cross-sector priorities and seven sector priorities. The cross-sector priorities are:
Firms' culture and governance; Financial crime (fraud and scams) and AML; Data security, resilience and outsourcing; Innovation, big data, technology and competition; Treatment of existing customers; Long-term savings, pensions and intergenerational differences; and High-cost credit. Investment management is one of the seven sector priorities for which the FCA specified a number of aspects, including: working with the ESAs on implementing PRIIPS; consulting on new rules on liquidity management and working with the Treasury on a new prudential regime for investment firms. In relation to the retail investments sector the FCA is considering a range of topics including the impact of the Financial Advice Market Review and Retail Distribution Review and publishing its report on the Investment Platforms Market Study. Its other five sectors are: wholesale financial markets, retail lending, pension and retirement income, retail banking and general insurance and protection.
In addition, the FCA published [09.04.2018] a number of related documents:
regulated fees and levies: rates proposals 2018/19 (CP18/10). Its annual funding requirement for 2018/19 has increased by 3.2% to £543.9m and the FCA is seeking comments on its proposed rates by 1 June 2018 and expects to publish a PS in July 2018 containing feedback and final rates rules. The CP contains a table of fee payers affected by the 2018/19 fees and levies rates the FCA proposes; Ex post Impact Evaluation Framework (DP18/3) to assist the FCA in finding out whether its interventions have been effective, using ex post (i.e 'after the event') "impact evaluations". Although the FCA has previously reviewed the effect of their interventions it has not previously consulted on a framework for doing so. The FCA seeks comments by 9 July 2018; Sector Views 2018 - the FCA describes these as a "snapshot of a sector at a given time". In the Sector View for Investment Management the FCA addresses a number of areas including asset management; and intermediaries and advice. The Retail Investments Sector View covers distribution. The FCA welcomes feedback on its Sector Views. Read more comment on Out-law on the FCA's Business Plan and related publications here. FCA's PS18/8 Asset Management Market Study remedies and Handbook changes - and related publications
The FCA published PS18/8 Asset Management Market Study remedies and changes to the handbook - Feedback and final rules to CP17/18 [05.04.18] to address a number of issues identified in the Asset Management Market Study on which the FCA consulted in June 2017. Read more on issues the FCA identified and which it consulted on in CP17/18 here. The rules in PS18/8 "are intended to require authorised fund managers to focus more on their duties as agents of investors in their funds" the FCA said. The PS contains final rules and guidance.
Proposals for investors
The FCA consulted on three aspects (CP17/18) which are now to be addressed as follows:
A: Fund manager's duty to act in the best interests of investors "Value for Money" (VfM) and AFM's duty to act in the best interests of their fund's investors. AFMs should charge "in the context of the overall service and value provided" the FCA said. The FCA's final rules clarify the assessment of fund charges is to be in the context of "overall value delivered, rather than...