24.03.2015 FCA BUSINESS PLAN FOR 2015/16

The FCA has published its Business Plan for 2015/16 setting out the key areas of work it will undertake in the coming year. Alongside its Business Plan the FCA also announced that, as part of the new FCA strategy, two divisions will now undertake its supervisory and authorisations work.

As regards the investment management world, the FCA has reaffirmed its commitment to assessing improvements in suitability standards, focusing on the following:

  • A market study on asset management focusing on issues which will be published in a reference document when the study is formally launched. This will include an examination of the fees paid by investors and the factors driving these fees.
  • A study into whether UK authorised investment funds are operated in line with investor expectations (which are based on marketing material, disclosure material and investment mandates). The study will also consider compliance with other responsibilities to investors such as adherence to risk management procedures.

26.03.2015 FCA CONSULTS ON 2015/16 FEES

The FCA has published its consultation paper (CP15/14): FCA Regulated fees and levies: rates proposals 2015/16 on fees for regulated firms for the 2015/16 financial year. Fees for individual firms are based on the areas of business they undertake and are used to cover the cost of the FCA’s regulatory activities.

The consultation paper covers the proposed 2015/16 regulatory fees and levies for the:

  • Financial Conduct Authority;
  • Financial Ombudsman Service (ombudsman service) general levy; and
  • Money Advice Service (MAS).

The FCA requires:

  • £481.6m per annum, up 8.4 per cent from £446.4m in 2015/16, used to:
    • deliver the programme of work set out in the FCA’s 2015/16 business plan; and
    • develop information systems;
    • £23.3m on behalf of the ombudsman service (which is the same amount asked for in 2013/14) recovered in the same proportions across the industry; and
    • £79.1m on behalf of MAS. Their overall budget for 2015/16 is £81.1m which is the same as last year. However as the energy and water industries are voluntarily contributing £2.0m to debt advice, the amount levied on financial services firms will be 2.5 per cent lower than last year.

A total of 38 per cent of regulated firms are expected to continue to pay the minimum fee which will increase to £1,084 from £1,000, the first increase since 2010.

In addition, the FCA has proposed fees for firms offering consumer credit, the pension guidance levy and the Payment Systems Regulator, which fall, outside the FCA’s annual funding requirement.

Firms can check their prospective fees for next year based on the proposals using the FCA fees calculator. The consultation closes on 18 May 2015, and the FCA expects to confirm changes to its fees in summer 2015.


The European Securities and Markets Authority (ESMA) has published its Work Programme for 2015. Among 192 individual items, the following appear:

  • Technical advice on passporting non-EU Alternative Investment Funds (AIFs) by EU managers and management/marketing of AIFs by non-EU managers in the EU. Due July 2015.
  • Guidelines and Recommendations on remuneration under UCITS.
  • Regulatory Technical Standards regarding various aspects of the Key Information Document for Packaged Retail  and Insurance based Investment Products. Due around December 2015/spring 2016.
  • A number of items relating to the regulation of European Long Term Investment Funds. Due August 2016.
  • A large number of items relating to MiFID II and the related Regulation (due variously from now through to 2016); the Market Abuse Regulation (now to July 2015) and the Central Securities Depositories Regulation (June 2015).


ESMA has published an updated version of its Q&A paper on the application of the Alternative Investment Fund Managers Directive (AIFMD).

The new Q&As are located in the following sections of the paper:

  • Section III: Reporting to national competent authorities under Articles 3, 24 and 42.
  • Section IV: Notification of AIFMs.
  • Section VII: Calculation of leverage.
  • Section X: Additional own funds.
  • Section XI: Scope.

The intention of the Q&A is to promote common supervisory approaches and practices in the application of the AIFMD and its implementing measures. Responses are provided to questions posed by the general public and competent authorities in relation to the practical application of the AIFMD. The answers are also intended to help AIFMs by providing clarity on the content of the AIFMD rules.


ESMA has published an updated version of its Q&A paper on the key investor information document for UCITS.

The paper includes a new Q&A “4g” on the treatment of past performance information in the event of fund mergers.

ESMA’s intention is to promote common supervisory approaches and practices in the application of the UCITS Directive (2009/65/EC) (UCITS IV) and its implementing measures, by providing responses to questions posed by  the general public and competent authorities relating to the practical application of the UCITS framework. The answers are also intended to help UCITS management companies by providing clarity as to the content of the UCITS rules.


The Hedge Fund Standards Board (HFSB) has published a consultation paper on managing conflicts of interest. This is part of the HFSB’s mandate to update and improve the Hedge Fund Standards, responding to the needs of managers, investors and public policy requirements.

The consultation paper aims to address investor concerns relating to the lack of adequate disclosure of conflicts of interest by some managers in relation to parallel and competing funds, as well as the lack of alignment of interest between managers and investors.

Building on the standards introduced in 2012 (which required better investor disclosure of the existence of parallel funds, accounts and vehicles), the amendments aim to achieve the following:

  • Disclosure of similar funds, accounts or vehicles, including partner/employee funds (upon request).
  • Disclosure of trade allocation policy to investors (upon request).
  • Internal arrangements to mitigate conflicts of interest.

The consultation paper states that none of the issues highlighted is unique to hedge fund managers: they can arise across the entire spectrum of the asset management industry and therefore the conclusions drawn from the consultation process will have broader application to all asset management firms.

Comments are invited on the paper until 12 June 2015.