Rule changes for UK asset managers by the Financial Conduct Authority are expected to save firms up to £128mn a year.
Today (July 14), the FCA launched a consultation on new rules for alternative investment fund managers — the current rules were set out in 2013.
The regulator said a large share of the projected £128mn-a-year savings is expected to come from simpler Fund Reporting for Asset Management Entities (FRAME) requirements.
Simon Walls, executive director, markets at the FCA, said: “By tailoring the regime for UK asset managers, we can collect better data while also saving industry tens of millions of pounds a year.
“With a sharp focus on proportionality, we can particularly boost freedom for smaller firms to find new ways to achieve the same high standards.
“Together, the proposals are a practical example of the FCA’s strategy in action: becoming a smarter regulator, which is more efficient and effective, using proportionate data collection to better identify risk.”
Consultation is available on the FCA website and closes on October 14.
The plans include changing firm thresholds which would mean firms with net assets of £750mn would be considered a small AIFM, up from the current £100mn threshold.
Guy Rainbird, public affairs director of the Association of Investment Companies, said this would make the rules “more proportionate” and reduce compliance burdens.
Ask FT Adviser
BETA feature — this feature is still being tested and developed
He said: “The FCA’s proposals are wide-ranging and complex, but there is a lot to be positive about.
“Much of the AIFM rule book duplicates the legal and governance standards that already apply to investment companies.
“These regulations were imposed by Europe without proper recognition of how listed investment companies differ from other funds.
“We are pleased to see the FCA recognise this by proposing a tailored approach for investment companies with lower requirements where AIFM rules duplicate existing standards.”
Jock Glover, CEO of Independent Investment Management Initiative, welcomed the changes, which he said would make regulation “better aligned” to the industry.
He added: “Our members fully support high regulatory standards, but it is equally important that the regime recognises the differing scale, complexity and risk profiles of client types across the investment management sector.
“Measures that simplify reporting requirements, reduce unnecessary administrative burden and provide firms with greater flexibility should allow management teams to spend more time focused on delivering good outcomes for clients and less on reporting and processes that add limited value.”
tara.o’connor@ft.com
What’s your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
Leave a comment