Regulation
Regulatory re-style
The Financial Conduct Authority (FCA) has published an update to its proposed approach to implementing the HM Treasury’s Future Regulatory Framework (FRF) review. The FCA’s update includes more details on the components to the FCA’s secondary objective on international competitiveness and growth and the identification of seven drivers of productivity that will shape its work.
Investor empowerment
The long-awaited EU retail investment strategy is out. Proposing new rules to protect and empower retail investors, Commissioner Mairead McGuinness has given the financial industry three years to hit her targets for transparency, costs and retail investor participation. Read the wide-ranging measures in brief in the press release and fact sheet, and initial industry reactions in Ignites Europe and Investment Officer, to choose a couple. Read the European Securities and Markets Authority (ESMA) call to action released the previous week in its press release, and articles in Investment Officer and Ignites Europe.
Activity overload
Ignites Europe reports on comments made at the recent Cross-Border Distribution Conference, by Claude Marx, director-general of the Commission de Surveillance du Secteur Financier (CSSF), expressing concern that national regulators and markets are struggling to implement new rules from the EU in a timely manner. In particular, he cited new rules relating to green finance, the capital markets union and the Markets in Crypto-Assets regulation and said that technological changes, including blockchain, tokenisation and artificial intelligence, among others are also posing a challenge.
Code consultation
The Financial Reporting Council (FRC) has launched a public consultation on its proposed revisions to the UK Corporate Governance Code, including revisions to reflect the responsibilities of the board and audit committee, for sustainability and ESG reporting. The consultation document is open for comment until 13 September 2023.
Orphans overlooked?
Interesting new research from Alpha FMC on the rise in the number of orphan clients and the support they receive. Alpha FMC poses an interesting question – would there be effective controls and treatments in place for orphan clients, in line with Consumer Duty? It’s worth taking a look at the full 2023 Investment Platforms Orphans Research report.
Consumer duty comms
And for other useful pointers on adhering to the forthcoming consumer duty regulation, FT Adviser has a useful article on Creating an effective client comms strategy under consumer duty.
Responsible Investment/ESG
Responsible recalibration
Speaking at the Financial Times (FT) Moral Money Summit Europe, Sacha Sadan, the FCA’s director of ESG, commented that he hopes the regulator’s approach to ESG investment products will “slow [the industry] down a bit before it can speed up with greater foundations”. Read his key comments in Ignites Europe.
Renaming required
More than 95% of funds with the word ‘sustainable’ or similar would require renaming or restructuring in order to meet the sustainability disclosure and label requirements of US, UK and EU regulation, a study by data platform, Clarity AI, has found. ESG Clarity reports on the study details, including that 81% of funds would only comply with one of the regimes, and only 4% of funds would comply with all three.
Market News
Abrdn adjustment
Abrdn is changing its Luxembourg-based Aberdeen Standard Sicav I umbrella and sub-funds to Abrdn Sicav I, from 5 June, bringing it into line with the Abrdn Sicav II structure, and will “standardise the way that fees and expenses are charged across the funds” Ignites Europe reports. Citibank Europe has been appointed as the depositary and administrator of the Abrdn Sicav I as part of the alignment of the operating model.
Icahn inflated
Following Hindenburg Research’s report saying it believed Icahn Enterprises was overvalued and held some of its assets at an inflated worth, and the enquiry by US federal prosecutors seeking information on corporate governance, valuations and due diligence, Carl Icahn’s interview with the Financial Times (FT) is worth a read.
People
We’re delighted to see that Stewart Aldcroft, veteran of the Asian asset management industry, Fund Boards Council advisory council member and regular contributor to our newsletter, has been appointed as an iNED at Standard Chartered Bank Trustee (Hong Kong) Limited.
Catch up with Stewart’s insights from Hong Kong in his ‘Aldcroft on Asia Pac’ article for the FBC quarterly newsletter if you’ve not read it already.
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