FCA Business Plan - PwC's asset management practice comments

Apr 18, 2017

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Following the publication of the FCA Business Plan, Amanda Rowland, asset management regulation partner at PwC, comments:

"While today's FCA Business Plan signals that the regulator will build upon its major initiatives from last year, the focus on liquidity management is noteworthy since it supports broader operational concerns arising from Brexit and indicates that some movement around enhanced stress testing and redemption disclosure is possible. The FCA’s continued focus on the market study and it's headline initiatives around cost disclosure and governance reform for asset managers will also support a broader agenda around consumer protection and vulnerability. But, some of the FCA's concerns signal possible future areas of emphasis such as poor competition in the investment consultant market.

"Technology will be a big area of focus for the asset management sector this year, as the FCA continues its support for firms looking to provide innovative solutions, especially by offering bespoke regulatory guidance for 'robo-advice'. But, the FCA also indicates that outsourcing arrangements and cyber vulnerabilities remain significant concerns. Likewise, there is a focus on those wholesale regulatory reforms which should prove the most technologically challenging for firms, especially MiFID II transaction reporting as the FCA will be leveraging the data obtained to improve its monitoring of market abuse. The FCA's broader concerns around culture and financial crime indicate that firms should be prepared for the wider application of the Senior Managers & Certification Regime and continue to prioritise anti-money laundering processes around client on-boarding and ensuring that technology is harnessed for stronger controls. 

"While acknowledging that Brexit will require regulatory flexibility, the FCA has focused on asset management initiatives such as cost disclosure and liquidity management that have wider international support and will likely be successfully progressed regardless of where Brexit takes the UK and the FCA." 


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