Fortnightly News Blog – 19th July 2022

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Regulation

Big Bang 2.0?

The UK government’s new Financial Services Bill squeezed in just before the Summer recess on Wed 20 July. The government describe it “legislation to enhance the competitiveness of the UK financial services sector and unlock tens of billions of pounds of investment across the economy”. Read the bill here

Read the Financial Times’ views here and their article on the Bank of England ditching mortgage affordability requirements here

Sustainability disclosure date

The Financial Conduct Authority (FCA) has confirmed the delayed Sustainability Disclosure Requirements (SDR) will be released in September. Investment Week here.

Following the FCA’s announcement on the publication date of the Sustainability Disclosure Requirements (SDR), our FBC member event with the FCA’s Mark Manning on the topic will be taking place on 3 October. Hosted by FBC senior adviser, Brandon Horwitz, Mark will be joined by Sandra Carlisle, Head of Sustainability at Jupiter, and iNED Julie Patterson. For further details and registration, click here.

Overseas fun(d)

The FCA updated their rules that apply to firms and fund operators in the temporary permissions regime (TPR) which applies post Brexit. This includes reaffirming that the UK exemption from the requirement for EEA UCITS to produce a PRIIPs KID lasts until 31 December 2026 and the FCA are engaging with the Treasury on the disclosure requirements that would apply in the event of an equivalence decision under the Overseas Funds Regime.

Chair news

The FCA has appointed Ashley Alder, current CEO of Hong Kong’s securities watchdog, as chair. He is expected to take up the role in January 2023, succeeding interim chair, Richard Lloyd stepped in when Charles Randell stepped down in May. Investment Week here.

 

ESG

ESG screening

Asset managers could be screened out by distributors, reports Ignites Europe here. Under changes to Mifid II, distributors will be required from August to ask investors whether they would like to take sustainability into account when making investments. If investors express interest in making sustainable investments, the distributor should provide them only with products that are aligned with the EU sustainable taxonomy or possess a minimum level of sustainable investments as defined by the Sustainable Finance Disclosure Regulation (SFDR).

The European Securities and Markets Authority ESMA has published a new consultation paper, here, on a planned review of the product governance requirements in Mifid II.  ESMA is proposing that firms should specify what a fund’s sustainability objectives are as part of the product’s target market assessment and ensure that these objectives are aligned with the sustainability preferences of investors. ESMA press release here and report in Ignites Europe here.

Driving data scrutiny

And turning the spotlight on the data providers, the FT reports here on growing pressure on regulators to scrutinise ESG data providers. Pierre Bollon, on the European Economic and Social Committee (EESC), and a general representative of AFG, the French Asset Management Association, said that data providers were playing an increasingly important role in the investment industry and should be subject to the same regulatory scrutiny as other parts of the financial services sector.

Beyond ESG

The FT here carries an ESG opinion piece by Sarah Gordon, CEO of the Impact Investing Institute, analysing the reason why so much ESG is accused of greenwashing and how she thinks the ESG world can and should learn from the impact investing world.

 

People and Progress

Listing rumours

Sky News, here, reports on the rumours of a potential stock market listing of $23bn asset manager Brevan Howard, following its search for a US-based chairman.

For whom the Bell tolls

AJ Bell has hired Alena Kosava, previously head of collectives at Avellemy Investment Management, as head of investment research as Ryan Hughes becomes head of investment partnerships. IFA magazine reports here.

ESMA committees

Five representatives of the financial services sector in Luxembourg have been named as members of working groups and specialist advisory committees of ESMA. These are: Dirk Zetzsche, a professor in financial law at the University of Luxembourg, François Baratt, senior industry affairs advisor at the Association of the Luxembourg Fund Industry (ALFI), Sebastien Brinkmann, ESG strategist at FE Fundinfo, Clearstream CEO Philippe Seyll and Philip Hanssens, chief compliance officer at Fidelity International Luxembourg. The new composition of the committees includes approximately 200 names. Reported on in Investment Officer here.

Chrysalis unfolding

The Financial Times (FT) here, reports on Jupiter managing and also investing, through many of their open-ended funds, in investment trust Chrysalis.

 

In the Boardroom

Cultivating culture

KPMG iNED, Oonagh Harpur explores culture in this podcast – how it can be measured, what it means for boards and the implications for corporate reporting and assurance. Listen to the podcast here.

In case you’ve not caught it yet, listen in to FBC’s new fund board effectiveness podcast series. In the introduction to the series, experienced non-executive director David Butcher speaks to FBC Managing Director, Catherine Battershill, about the importance of mindfulness and self-awareness in the fund board room. Following up, David speaks with ‘Boards’ author Patrick Dunne about the impact self-awareness can have on the overall performance of boards. Listen to the podcasts 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.

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