Regulation
Consumer duty crackdown
As consumer duty came into force over the summer, here’s a quick round up of just a few of the headlines surrounding the implementation timeline. The Financial Times (FT) lead on the actions the Financial Conduct Authority (FCA) will take with organisations failing to make necessary improvements.
Abrdn extended its value assessment to Luxembourg funds ahead of consumer duty ‘to enable UK distributors to carry on selling them in the UK’ as reported in Ignites Europe. It has also merged away the Global Absolute Return Strategies, at one point the biggest fund in the UK, following consistent under-performance Citywire reports.
Fidelity platform has restricted new investments in the Rothschild-backed RIT Capital in its action against funds with high charges and big weightings in unquoted and illiquid assets Citywire reports.
And Money Marketing reports on Quilter research findings, including the expectation from financial advisers that consumer duty will hit profits.
In case you missed it over the summer, FBC senior adviser and resident AoV expert, Brandon Horwitz , spoke to Ignites Europe on Assessment of Value and our recent FBC Report: Assessment of Value, An Impact Study. Watch the interview here. FBC Members have access to the full report in the member portal and details for non-members here.
You may also be interested in our FBC summary for fund boards of the FCA feedback, exclusively for FBC members.
EU value
And in European value assessment news, the Commission de Surveillance du Secteur Financier (CSSF), has set a deadline of December 31, 2023, for investment funds and their managers to conduct comprehensive assessments of their valuation frameworks and to update these where necessary. Read the details in Investment Officer.
ALFI has submitted a position paper on the European Commission proposal on a retail investment package (RIP) for which the feedback period ended on 28 August 2023. The package included a draft Omnibus Directive, amending five different directives, and the draft amending PRIIPs Regulation.
Irish value
And in Ireland, the supervisor is preparing a “broader industry communication” on the valuation of funds that will be published in the coming months, Investment Officer has further details.
Governance
The FT looks into the implications of over-boarding.
PWC’s latest publication on individual director performance is worth a look.
A new report from Quilter Cheviot reveals some equity investment trust boards are failing to meet ethnic and gender diversity targets, display inadequate levels of engagement with shareholders and are not adhering to corporate governance rules on director tenure. Read the lowdown in the FT.
Responsible Investment / ESG
Standards and scrutiny
For a neat summary of the first 12 European Sustainability Reporting Standards (ESRS) take a look at the linkedin post from United Nations Environment Programme Finance Initiative Head of Climate Risk and TCFD, David Carlin.
And on the scrutiny of ethical funds, as seen in the recent Morningstar fund flows and reported in The Times, there are a couple of thought-leader articles worth a read. Vice-chair at Oliver Wyman and former global head of banks and diversified financials research at Morgan Stanley, Huw Van Steenis, writes a column in the FT reflecting on parallels between the dotcom boom in tech themed funds in the late 90s and ESG funds in recent years … and credit crunch echoes of re-rating (down) of fund ESG scores by MSCI etc. Stuart Kirk provides his view on the inconsistencies for investing in ESG funds in his latest commentary in the FT.
Artificial Intelligence
eToro’s latest Retail Investor Beat shows one in ten (11%) retail investors are using artificial intelligence (AI) tools such as ChatGPT to help pick and alter investments in their portfolio.
It’s a brave new world of AI and FBC is keen to explore and support our members in being able to understand the opportunities and issues of this in a fund board context. As a first foray, we are hosting a Luxembourg focused event, spearheaded by two of our members, Birgit Moeltner from Capital Group and Tarne Bevan at M&G, focusing on how AI can enhance fund board effectiveness. We’re planning on further events for UK and Ireland so watch this space!
Industry News
Way ahead
Waystone Group’s acquisition of Link Fund Solutions became closer to completion, Investment Week reported.
People
The Financial Reporting Council (FRC) has appointed former Civil Aviation Authority boss Richard Moriarty as its new chief executive following Sir Jon Thompson’s resignation to lead rail network HS2.
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.
