UK Regulator Moves To Ease Market Entry For New Asset Managers

Josh O'Neill

29 September 2017

The UK’s financial services watchdog will set up a new hub next month to ease entry to market for budding asset managers, helping them navigate an already complex regulatory regime that is set to be bolstered by a raft of incoming rules.

Last year, the ’s introduction.

“We have no intention of taking enforcement action against firms for not meeting all MiFID II requirements straight away, if there is evidence they have taken sufficient steps to meet the new obligations by the start date, and that there are plans in place to complete the process.”

She said that “the range and depth” of data the FCA will receive from January will improve its ability to monitor the market, helping it “spot abusive practices earlier”.

She also acknowledged concerns from firms with cross-jurisdictional operations about potential conflicts arising from MiFID II.

“I know there is a question mark hanging over firms that are registered as broker dealers in the US and other territories – and who can’t accept payment for research, without also applying to become an investment advisor,” Butler said. “Let me assure you that we are fully aware of this issue, and we are in close contact with colleagues in the EU and US, who are working on a solution. So please watch this space.”

Butler also gave a nod to the FCA’s plans to extend its Senior Managers and Certification Regime (SMCR) to nearly all licensed operators, including wealth and asset managers, in a bid to hold senior managers accountable for failings on their watch.

“We see personal accountability as fundamental to the future of financial services,” Butler said, adding “we are sensitive to the fact the roll out will affect firms of many different shapes and sizes.”

The FCA’s announcement in July that it planned to extend the rules, which banks have had to comply with since last March, to all financial institutions sparked fear among wealth and asset managers. There have been reports that fewer people have been willing to take on more senior roles because of the additional liability.

Butler’s comments followed a recent study by Allen & Overy and Willis Towers Watson, which found nearly half of senior executives were unaware of the FCA’s intention to extend the regime to the entire financial services sector.

Some 43 per cent of 127 respondents did not know about the plans.