Acting in the best interest of investors whilst increasing levels of personal accountability amongst top managers are two of the main goals of a new set of rules by the Financial Conduct Authority (FCA) to improve competition in the UK’s asset management industry.
The new rules are the response to the concerns identified through its asset management market study.
Under the new rules, fund managers are required to make an annual assessment of value, as part of their duty to act in the best interests of the investors in their funds.
Moreover, the documents include the introduction of a new prescribed responsibility under the Senior Managers and Certification Regime to bring individual focus and accountability as well as technical changes to improve fairness around the way in which fund managers profit from investors buying and selling their funds and facilitate the movement of investors into cheaper share classes.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA said:
The investment choices open to people, and the decisions they make on how to invest, can have a profound impact on their financial health. They can also have consequences for their families, as well as society as a whole. That’s why it is important the asset management industry, which looks after the savings of millions of investors, is working as well as possible. But our market study found evidence of weak price competition in a number of areas.
Firms have 18 months to implement the rules on assessment of value and appointment of independent directors and 12 months for the rules related to the way in which fund managers profit from investors buying and selling their funds.
Find out more here.