Regulation
Consumer Duty
In case you were on holiday last week and missed it, the Financial Conduct Authority (FCA) confirmed its plans to bring in a new Consumer Duty, aimed to fundamentally improve how firms serve consumers. It will set ‘higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first’. Read the FCA press announcement here and just some of the press commentary, in Ignites Europe here and in Investment Week here.
Fund Boards Council (FBC) senior adviser Brandon Horwitz has summarised the key elements of the Consumer Duty as they pertain to the boards of authorised fund managers, exclusively for FBC members here. Your attention is especially drawn to the section where we compare Consumer Duty with Assessment of Value/PROD, presented in a tabular form for ease of reference.
Third party im-pru-vement
The FCA, the Prudential Regulation Authority and the Bank of England have set out proposals on how to oversee and strengthen the resilience of services provided by critical third parties to the UK financial services industry in a new discussion paper here. Responses are requested by Friday 23 December 2022.
Governance
Code review
The Financial Reporting Council (FRC) has announced a fresh review of the UK Corporate Governance Code, indicating that it will strengthen and expand it. The Financial Times (FT) runs the perspective from a professor of corporate law at the University of Cambridge here.
ESG
Green scandal
ESG scandals put pressure on fund boards: ‘If things go pear-shaped, they will be held accountable’. FBC’s Brandon Horwitz adds his insight to this FN London article here, highlighting the swift regulatory response to allegations of greenwashing over recent months.
Mifid deadline
Half of firms were yet to complete ESG templates ahead of the Mifid deadline, according to fund data provider FE fundinfo, Ignites Europe reported last week here. Under changes to Mifid II, distributors are required, from Tuesday 2 August 2022, to ask investors whether they would like to take sustainability into account when making investments.
People News
M&G chief investment officer, Jack Daniels, is retiring in June 2023, after a tenure of more than two decades. Daniels’ departure comes as M&G is looking for a new chief executive, following the announcement in April that John Foley, who has been in the job since 2015, is retiring. Foley will continue in the position until a successor is in place. Reported on in the FT here.
In case you’ve not seen it yet….in one of our recent podcasts FBC senior adviser, Brandon Horwitz, discusses with Sebastjan Smodis of State Street Global Advisers, how fund managers have been reacting to events over the past year including: the impact of the Ukraine war, rising interest rates and inflation (and the impact on fixed income investments) and the continuing impact of Covid-19. Another key theme is the role of fund boards in overseeing liquidity management activities in the past year, including how they have interacted with executive teams in and outside of board meetings. The podcast is available on demand here.
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