Reasonable steps to compliance assurance with Covid-19

The latest update to the FCA’s webpage on Covid-19 reiterates the FCA’s position that firms should be taking reasonable steps to maintain compliance. Cases of Covid-19 are growing internationally and the majority of firms will be impacted as financial services firms are connected globally. During this time of uncertainty as firms rely on remote or
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What’s the Alternative?

FCA’s recent Dear CEO letter sets out its supervision strategy to address the key risks of harm that alternatives investment firms pose to their customers and markets. The regulator says its alternatives portfolio comprises authorised firms that predominately manage alternative investment vehicles (hedge funds or private equity) or alternatives assets directly, or advise on these
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FCA assesses asset managers use of portfolio and risk management tools

Hot on the heels of the FCA’s consultation proposals for improving larger firm’s operational resilience, CP 19/32, the FCA has published an assessment of how asset managers use risk modelling and portfolio management tools. The 10 firms visited varied in terms of size, scale, operating models and asset classes. Linked to its work on technology
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Don’t LIBOR under a misapprehension it doesn’t affect asset managers

The interest rate benchmark LIBOR is expected to end after 2021. The FCA has recently updated its web-pages highlighting the governance and conduct risks its sees for the transition to alternative rates. The message to asset managers, summarised below, is evaluate fully your exposure to LIBOR and establish governance arrangements to manage the impact for
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Effective liquidity management: FCA’s good practice expectations

A consequence of the Woodford affair is a letter from FCA which requires AFM Chairs to consider Portfolio Composition and Asset Eligibility, and Liquidity and for Liquidity, conduct a review as soon as practicable. FCA’s key message is “effective liquidity management is an irreducible, core function for all open-ended funds.” Not surprisingly, post Woodford, firms
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FCA calls for better transaction reporting

FCA’s latest Market Watch 62 highlights the continuing challenges FCA regulated firms are experiencing with transaction reporting. Despite the regulatory requirement that firms check the completeness and accuracy of the reports they submit, the FCA continues to identify data quality issues through its ongoing monitoring and engagement with firms. These data inaccuracies can limit the
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SMCR Stocktake – Lessons worth learning

The FCA recently published a generally positive “stocktake” of the banking sectors experience with SMCR over the past 3 years. It conducted interviews with 15 firms and other industry participants to build a profile of compliance with SMCR. Ostensibly firms got it right, although measuring culture will continue to be a challenge for firms and
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SMCR: Commencement Day is 9 December

Although core elements of the SMCR have been in place for many years – senior management authorisation, assessment of individual fitness and competency, approved person principles and implicit expectation of regulatory referencing, the Parliamentary Commission on Banking Standards (PCBS) found that the existing Approved Persons Regime failed to hold individuals to account in banks. It
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Insider Do’s, Insider Don’ts

Our recent article “The FCA’s market cleanliness pledge” highlighted how the FCA is using MiFID transaction reports and suspicious transaction and order reports to identify potential market abuse. Now the FCA, which regularly espouses standards of good market conduct through its’ Market Watch publications, focuses on its concerns and findings over the control of access
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FCA’s market cleanliness pledge

Market surveillance provides one way for the FCA to identify market abuse. According to its Annual Report, the FCA received over 6,000 Suspicious Transaction and Order Reports (“STOR”s) or other external notifications about potential market abuse in the past year. These led to the FCA opening 484 preliminary market abuse reviews, initiating 91 enforcement investigations
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