Contents:
- Future Regulatory Framework and UK Asset Managers
- Primary Markets Effectiveness Review – CP 23/10
- The FCA’s Market Watch – Concerns Over Insider Dealing
- SM&CR Regime – Call For Feedback
The Future Regulatory Framework and UK Asset Managers
The Government’s Future Regulatory Framework (FRF) review was set up to decide how the regulatory framework for financial services should adapt to the UK’s new position outside the EU. It aimed to ensure the UK’s framework remains up to scratch.
In the review, Discussion Paper 23/2 focuses on UK Asset Managers and is relevant for fund managers and Authorised Corporate Directors (ACDs). It covers a number of areas…
Call for feedback
It asks for feedback on whether the structure of the regulatory regime for asset managers could be made clearer and more coherent. It covers the regime for retail funds and the regime for managers of professional funds.
Proposed improvements
The Paper also covers ways the FCA believes the regime for asset managers, funds and depositaries could be improved. These ideas include removing the distinction between UCITS and NURS funds. Instead, a single category is proposed to simplify the retail fund landscape. The Paper also suggests changing the size criteria under AIFMD, with a discussion on ways to clarify the responsibilities of portfolio managers compared with ACDs.
Technology’s capacity to drive change
Lastly, the Paper considers how technology can drive change. In particular, it looks at how fund managers, distributors and investors interact with one another and discusses structural changes such as fund tokenisation which could support better outcomes for firms and investors.
Firms have until 22 May 2023 to respond should they wish to.
Primary Markets Effectiveness Review – CP 23/10
The FCA is consulting on proposals to change the listing rules in the UK. The aim is to improve the framework for listing, in response to the decline in the number of companies listing on UK markets.
While the US and EU have also seen a decline, China and Hong Kong have had an increase in companies listing on their markets. The FCA is now seeking to remove actual or perceived potential barriers to listing to make the UK a more attractive market.
The proposal is to replace the current premium and standard listing classes with a new single listing category. The FCA is also proposing changes, including:
- The removal of eligibility rules requiring a three-year financial and revenue-earning track record.
- Removing the requirement to have a ‘clean’ working capital statement.
- Modifying and simplifying eligibility and ongoing rules around independence and operational controls.
- Removing compulsory shareholder votes and shareholder circulars for significant transactions.
- Introducing a single set of Listing Principles and related provisions.
Respondents have until 28 June 2023 to respond to the consultation’s proposals.
Market Watch
In their April 2023 Market Watch publication, the FCA discussed their concerns over insider dealing. This particularly concerned CFDs, as it considers these especially at risk of insider dealing.
The outcomes of the review were largely positive. The FCA found that all firms recognised insider dealing in single stock equities as the predominant market abuse risk. However, not all firms could demonstrate they had considered all market abuse risks relevant to their business.
Firms involved in all aspects of trading, but particularly CFDs, should consider whether their systems’ controls and arrangements to detect and prevent insider dealing are in line with FCA expectations.
The SM&CR Regime – A Call For Feedback
The SM&CR regime was introduced in 2016 and since 2019 has applied to almost all regulated investment firms. It aims to increase responsibility and accountability within senior management at regulated firms.
In doing so, it included the introduction of new Senior Management Functions (SMF) to replace the previous Controlled Functions. Firms also internally certify staff carrying out certain activities. The FCA has released a discussion paper on the SM&CR regime, inviting firms to respond to give feedback on its effectiveness and to help with possible enhancements.
CAN WE HELP?
If you would like to discuss any of these developments or have questions for our specialist Financial Services team, please do get in touch.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
Copyright © Shipleys LLP 2023
Related Resources
Financial Services Update – January 2023
Financial Services Update – September 2022
