Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | XXXXXX 44 THE FINANCIAL CONDUCT AUTHORITY’S ASSET MANAGEMENT MARKET STUDY Proposals to improve competition in the asset management industry RULES AND GUIDANCE — PS18/8 Requirement for fund managers to make an annual assessment of value, as part of their duty to act in the best interests of the investors in their funds. Minimum considerations include: Requirements for fund managers to appoint a minimum of two independent directors to their boards Introduction of a new prescribed responsibility under the SM&CR to bring individual focus and accountability Box profits • Risk-free box profits to be repaid either to the fund or to investors • Recognise situations where risk free profits are offset by losses • Change the frequency for making payments to the fund Movement of investors into cheaper share classes. Includes: • One-off notification to investors (response not required) • Minimum 60 days before mandatory conversion • Firms to be mindful of client best interests rule • FG14/4 recast and now known as FG18/3 FURTHERFCACONSULTATION—CP18/9 Consultation proposes measures to improve the quality, comparability and robustness of information available to investors. FCA proposes to: • Publish guidance reminding AFM’s how they should express fund objectives and investment policies to make them more useful to investors • Make new rules so that AFM’s must explain why they use benchmarks , or if they do not, how investors should assess the performance of the fund • Require AFM’s to reference benchmark use consistently across all fund literature • Ensure where AFM’s present the fund’s past performance, benchmarks used as a constraint on portfolio construction or as a target must be presented alongside the past performance • Amend performance fee rules to provide that performance fees must be calculated on performance net of other fees in all cases • Quality of service • Performance • AFM costs — general • Economies of scale • Comparable market rates • Comparable services • Classes of units FCA OCCASIONAL PAPER NO.32 FCA Occasional Paper No.32: Now you see it: Drawing attention to charges in the asset management industry • Experiment on a simulated online platform that tested the impact of 4 ways of presenting charges • Warning and review screens work best! • What happened to the all-in-fee proposals?