New rules for Authorised Fund Managers


Author: Charles Proctor


Charles Proctor, Partner, Fladgate LLP (cproctor@fladgate.com)


 

The Asset Management Market Study carried out by the Financial Conduct Authority (FCA) raised concerns about weak price competition and the ability of investors to seek the best value.

Therefore the FCA has decided to introduce new rules and guidance applicable to authorised fund managers (AFMs) in respect of their management of authorised funds subject to COLL.  These are set out in FCA Policy Statement PS18/8 (click here for link) 

The main thrust of these changes is to strengthen the duty of AFMs to act in the best interests of investors.  The changes include the following:

  • AFMs must assess and justify payments out of the fund.
  • The board of the AFM must include independent directors.
  • AFMs must allocate responsibility for compliance with the new requirements to an approved person.
  • A relaxation of the investor approval requirements when converting between unit classes.
  • AFMs must not retain any risk-free box profits.

We set out below some further commentary on each of these new measures in the attachment below.

New rules for Authorised Fund Managers (click here for PDF of briefing)

 

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