Welcome to the latest edition of our investment management update.
This publication has been tailored to highlight topical news, cases and changes in the law impacting the investment management sector.
UK
- On 31 January 2025, the FCA issued Handbook Notice 126 which
included amendments to the COLL sourcebook of the FCA Handbook. The
notice set out changes to an existing rule that sets limits on the
ability of a UCITS scheme to hold units of other collective
investment schemes (Second Schemes). The changes clarify how the
rule applies to umbrella/sub-fund structures, and disapply the rule
in certain situations where the investing UCITS scheme and Second
Scheme are managed by the same firm. In particular, the FCA has
clarified that the 25% maximum limit applies to each individual
sub-fund in an umbrella. This will allow an authorised fund manager
greater investment flexibility when managing a range of UK UCITS
schemes organised as sub-funds within an umbrella. The FCA has
stated that it will still be possible for an AFM to operate a fund
of funds with fewer restrictions under the non-UCITS retail scheme
regime.
Handbook Notice 126
- On 31 January 2025, the FCA opened a consultation on proposing
further changes to the listing rules including to align disclosure
requirements for low denomination bonds with those for higher
denominations to make capital raising easier for issuers. The
FCA's intention is to encourage listed companies to offer bonds
of smaller denominations to enable greater participation by both
wealth managers and retail investors.
FCA sets out further proposals to support growing business and investment opportunities | FCA
CP25/2: Further changes to the public offers and admissions to trading regime and the UK Listing Rules | FCA
- On 23 January 2025, the FCA published a report and feedback on
the steps which wholesale brokers should be taking to reduce money
laundering through the UK's capital markets. The FCA found that
while firms were making progress on AML controls, there were areas
where firms need to make further improvements. Although primarily
directed at brokers, the report will be relevant to all firms
operating in the financial markets. At the same time the FCA
published a portfolio letter to wholesale brokers setting out
supervisory focus areas including prudential risk management,
financial crime, culture, risk management and financial
resilience.
FCA published review of wholesale brokers anti-money laundering controls | FCA
- On 16 January 2025, the FCA updated its web page for overseas
funds seeking recognition. The FCA also provided a new material change
form.
FCA update for firms on application timelines for overseas fund regime (OFR) | FCA
- On 16 January 2025, the FCA chief executive Nikhil Rathi
responded to the government's growth strategy and sent an open
letter to the Prime Minister and Chancellor setting out how the FCA
will support economic growth. Mr Rathi addressed, in particular,
the FCA's reforms of the wholesale markets including
streamlining regulatory requirements for the asset management
sector and simplifying product information. The letter also
discussed reducing the regulatory burden on firms by simplifying
the FCA Handbook, making the Senior Managers and Certification
Regime more flexible and removing the requirement for a Consumer
Duty board champion. In response to the government's strategy
of informed risk taking, Mr Rathi acknowledged that there will be
failures and requested guidance from the Government for metrics for
tolerable failures.
FCA considers how it will support economic growth| FCA
- On 14 January 2025, the FCA published a web page on how firms
should tackle polluting behaviour and meet their redress
liabilities. The FCA emphasised the need for firms to have adequate
financial resources to be able to provide redress in compliance
with Principle 4 (Financial prudence), the threshold conditions and
any other applicable prudential standards. The web page sets out
practical measures that firms should take to assess redress
liabilities and ensure that these are appropriately provisioned for
and addressed.
FCA clarification on obligations of firms to tackle polluting behaviour | FCA
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
