FCA Publishes Dealing Commission Review Findings
The FCA have published their findings from a review that analysed dealing commission expenditure across 31 investment managers. The policy statement on the use of dealing commission rules, published in May 2014, set out changes to rules and the FCA’s expectation that firms spend customers’ money with as much care and attention as if it were their own.
The majority of the 17 firms visited are still falling short of expectations. Not only were poor practices identified but some firms continued to use dealing commission to purchase non-permissible items, such as corporate access and market data services.
Due to these findings and the implementation of MiFID II, the FCA will continue to focus on the use of dealing commission and will consider appropriate action against those who breach the rules or principles. This will include more detailed investigations into specific firms, individuals or practices.
The FCA’s stated that firms which operate ‘global’ commission models must apply the FCA’s dealing commission rules to their investment management activities that take place in the UK, including COBS 11.6.
FCA to Consult on Extending the Senior Managers and Certification Regime (SM&CR) in Q2 2017
On 22 February 2017, the FCA announced that plans to consult on its proposed extension of the Senior Managers and Certification Regime (SM&CR) to all firms authorised under the Financial Services and Markets Act 2000 (FSMA) during the second quarter of 2017. The SM&CR will replace the current approved persons regime, including by placing greater regulatory responsibility on senior managers of FCA authorised firms. It took effect for firms in the banking sector on 7 March 2016.
Dechert and the Alternative Credit Council Launch Annual Private Credit Survey
Dechert and the Alternative Credit Council (ACC), an affiliate of AIMA, have launched the third annual Private Credit Survey and we strongly encourage managers of private credit funds to take a few minutes to complete it. Respondents are urged to try to answer all questions in their entirety.
The findings of the survey will be incorporated into the third annual ‘Financing the Economy’ report which will be released in Autumn 2017. The series of papers have been extremely well-received by policymakers, the professional public and media at large, and have helped the ACC make great strides in their advocacy efforts in the private credit space. This survey seeks to analyse in more detail the evolving role of alternative lenders in capital market financing.