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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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 and
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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 Rights
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Sustainable Compliance

On May 3, ESMA issued two Final Reports of technical advice to the European Commission on integrating sustainability risks and factors in MiFID and in the AIFMD and UCITS directives. Technical advice supports draft amendments to EU Regulation and, if adopted, the revised texts could be implemented during 2020. Both reports add “sustainability risks” to
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FCA Business Plan re-states existing priorities

The FCA has issued its Business Plan for 2019/20 setting out its regulatory priorities. Limiting our update to the plans the FCA identifies for investment managers, it says it will focus on 3 roles of buy-side firms: o              Agents to investors, where the FCA want firms to uphold investors interests; o              Good market participants, where
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