Regulation
Championing consumers
For those who want to get the latest know how on implementation of the Consumer Duty, the Financial Conduct Authority (FCA) has a regularly updated webpage with answers to common queries, including the role of Consumer Duty Board champions and information-sharing in the distribution chain here. Check out the recent FCA podcast on what the ‘price and value’ outcome is in the Consumer Duty beyond what assessment of value means for Authorised Fund Managers. And, a final note on this critical topic, the FCA has also suggested that firms train consumer communication champions to “review communications from a consumer angle, and help firms develop and maintain best practice”, Ignites Europe reports here. This is optional and additional to the board-level consumer champion that companies are required to appoint.
Retail disclosure renovation
The FCA has also published its discussion paper for the delivery, content and presentation of the future regime for retail disclosure regulation, including UCITS and PRIIPS. Full details are here and a report in Investment Week here. Comment on the discussion paper by 7 March 2023.
And following on from the FCA’s joint Discussion Paper (DP) with the PRA and Bank of England on diversity and inclusion in the industry, it has presented the findings, here. This includes an overview of initiatives for improvement and some areas for potential policy intervention to be consulted on later this year.
EU value
Potentially following in the footsteps of the UK, Ignites Europe reports that the European Commission is reviewing options on value for money assessment legislation. Read the full article here for views from Morningstar, the European Fund and Asset Management Association (Efama), and Fund Board Council’s (FBC) own Shiv Taneja.
ManCo manpower
The Central Bank of Ireland (CBI) has called on third-party mancos to increase their staffing levels following a thematic review of governance, management and effectiveness, conducted last June. Further details in the letter to company chairs here. Reported on in Ignites Europe here.
ESMA expectations
A peer review by the European Securities and Markets Authority (ESMA) has concluded that Ireland and the Netherlands “did not meet supervisory expectations” when overseeing relocations by asset managers from the UK following the Brexit referendum. Further details of how the other European regulators fared in Ignites Europe here.
ESG & Responsible Investment
Self-reporting savings?
Vanguard’s Australian unit self-reported its own regulatory breach that led to three greenwashing infringement notices issued by the securities watchdog. The pre-emptive move by the US asset manager likely led to a much smaller fine the Financial Times (FT) reports here.
Advancing ESG
The International Sustainability Standards Board (ISSB) has released its December update, here, covering progress made and key decisions taken over the past year. The Securities and Exchange Commission (SEC) has started taking action on this in the US, here, but polarisation is high with a lot of Republican led criticism – interesting analysis here.
Naming rules
General Counsel of the Investment Company Institute (ICI), Susan Olsen, expounds her view on the SEC’s proposal to expand its 80 per cent rule on fund names to include those that reference investment strategies, such as “growth”, “value” or “ESG” for funds that focus on environmental, social and governance factors. Read her article in the FT here.
Market News
Illiquidity issues
In a long running issue, the Autorité des Marchés Financiers (AMF) has fined H2O Asset Management €75m for issues with UCITS fund investing in illiquid assets (and conflicts of interest between the manager and an investee firm). Read more in Ignites Europe here.
Property problems
The FT reports on the restricted withdrawals and delayed redemptions on UK property funds in recent months here.
Governance
Tenure vs. performance
Board IQ, here, discloses its analysis of directors who oversee funds, comparing 10-year category performance and highest expenses in 2021 compared with tenure.
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