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 technologyRead more >
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 forRead more >
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, firmsRead more >
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 theRead more >
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 andRead more >
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. ItRead more >
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 accessRead more >
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 investigationsRead more >
Money for Something
The FCA’s latest consultation CP 19/20 entitled “Our Framework: Assessing Adequate Financial Resources” is a curious read. Not least as the FCA sees over £90m of new costs it proposes for financial services firms, money well spent. Regulated investment managers should be familiar with the FCA’s latest “clarity” covering capital, liquidity, wind-down planning, stress-testing andRead more >
Stewardship Enquiries – FCA sprints to implement SRD II
The FCA will proceed with implementing new obligations on Shareholder Rights to managers of non-UK investments listed on regulated markets, effective 10 June. Whilst an initial grace period has been allowed, the FCA is effectively applying stewardship requirements on UK-based managers of listed equities globally. Our article on the FCA consultation on the Shareholder RightsRead more >
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