Honouring Her Majesty Queen Elizabeth II
The team at FBC joins those in the United Kingdom and around the world in remembrance of Her Majesty Queen Elizabeth II, and in thankfulness for her lifetime of service and commitment.
REGULATION
UK
Dear Alternative Managers
The industry regulator, the Financial Conduct Authority (FCA) lays out its alternative supervisory strategy in a Dear CEO Letter, which can be viewed here. One of its key messages is that it will consider enforcement action should it need to, as it calls on this group of asset managers to tighten up their processes. Media coverage via Ignites Europe can be found here.
Putin’s pockets
In case you missed it in July, the FCA published final rules and guidance which allow authorised fund managers to create separate unit classes (side pockets) for retail investment funds affected by the invasion of Ukraine. The rules aim to ensure that funds can operate fairly and efficiently in the interests of all investors, allowing for the use of side pockets where their Russian, Belarusian and Ukrainian exposures are subject to financial sanctions, or cannot be valued or traded.
LTAF or having a laugh?
Two regulatory consultants ask if anyone actually wants a long-term asset fund? They make their case in Investment Week here.
Europe
EU Distribution
Vanguard is lobbying Brussels to end the European Union’s “retrocession-oriented distribution system”, with asset managers having to pay rebates to “access distributors”, Ignites Europe reports here.
Separately, law firm Macfarlanes explores how the European Commission is now considering significant changes to its investor protection rules that could not only change the way that investment firms do business, but also fundamentally shape the way that ordinary people invest. Read their assessment here.
USA
SEC gets tough on fees and how US fund boards approve them
The US Securities and Exchange Commission’s (SEC) enforcement division is asking fund groups about advisory fees and their communications with fund boards regarding the advisory contract approval process. BoardIQ reports here.
Fund naming convention
Asset management companies are opposing proposed changes to the US Securities and Exchange Commission’s (SEC) “names rule” which requires that 80 per cent of a fund’s assets adhere to the approaches specified in the fund’s moniker. The proposed change would apply to strategies such as growth, value, geography, industry or one or more environmental, social and governance factors. Read the Financial Times (FT) report here.
ESG
Dual meaning deliberations
Former head of responsible investment at HSBC Asset Management, Stuart Kirk, argues that ESG must be split in two in the FT here. More in FT’s Moral Money here.
Not quite article 8 or 9
Ignites Europe here and Bloomberg here report on the latest ESG data from Morningstar, which concludes that 23% of article 8 funds do not merit an ESG tag. It also reveals that asset managers have reclassified well over 600 funds previously listed as Article 6 to Article 8.
Added to that, more than one in four ESG fund units marketed under the EU’s deepest green label are at risk of being stripped of their designation, an analysis for FE Fundinfo has suggested. Citywire Selector reports here.
‘Feel-good’ factor
Vanguard, the target of protestors throughout July for perceived failings in its commitment to the Net Zero Asset Managers initiative, warns firms to be careful about ‘feel-good’ climate change pledges in Ignites Europe here.
DIVERSITY & INCLUSION
Gender parity stalled
Progress towards gender parity in asset management has stalled, according to a report that suggests more than seven in eight money-managing roles are still occupied by men. In The Times here.
Why inclusion trumps diversity
A Deloitte Insights podcast with Columbia Threadneedle’s Global Head of Integration and Change, Laura Weatherup. Listen/read here.
CORPORATE ACTION & GOVERNANCE
Board effectiveness
Harvard Law School Forum on Corporate Governance reports on Deloitte’s interviews, roundtable discussions, and surveys of more than 300 board chairs in 16 countries in its “Board Effectiveness and the Chair of the Future” article here.
Link acquisition
Following announcements made on 12th September by Link Group to the Australian Securities Exchange and Dye and Durham (D&D) to the Toronto Stock Exchange, the FCA provided a short update on its involvement in the proposed takeover of the Link Group by D&D. Read the press release here, and Investment Week’s reporting here.
PEOPLE
Changes at SJP
Rob Gardner has stepped down as investment director at St James’s Place (SJP) to set up a new venture in the environmental sector, Portfolio Adviser reports here. Gardner will remain with SJP until the end of 2022 to ensure a smooth transition, and Tom Beal, who has been with the wealth manager for 14 years, steps into the role with immediate effect.
City minister
Newly-appointed financial secretary to the Treasury, Andrew Griffith, has also been appointed city minister by PM Liz Truss, and is set to deliver the government’s post-Brexit financial services reforms, reports Investment Week here.
LONG READ
Why ESG Investing isn’t designed to save the planet. Two academics make the case in this Harvard Business Review article here.
Several of the news outlet cited in this blog require registration or subscription. Also, FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. Content stored on the FBC portal is freely accessible for FBC members.
