FCA Updates & Developments

The FCA has published a Discussion Paper (DP17/1) seeking stakeholder views on the practice of investing in illiquid assets (land and buildings, infrastructure, and financial assets such as unlisted securities) through open-ended funds and the challenges that can pose to managers and investors.

One of the key issues the Paper raises is the balance of interests between investors who want to withdraw their money and those who want to remain. Open-ended funds that invest in illiquid assets can encounter difficulties if investors expect to be able to withdraw their money at short notice.

The FCA is seeking feedback on this Discussion Paper by 8 May 2017.

The FCA has updated the section of its website dealing with the Senior Managers and Certification Regime (SMCR). The FCA is developing its approach to the extension of the SMCR and they plan to consult during Q2 of 2017. HM Treasury has stated its intention that the regime should start from 2018.

The FCA has published Handbook Notice No 41, which sets out the recent changes made by the FCA to its Handbook. The following instruments are included:

  • Handbook Administration (No 45) Instrument 2017 (FCA 2017/5/FOS 2017/1) (came into force 24 February 2017)
  • Fees (Miscellaneous Amendments) (No 9) Instrument 2017 (FCA 2017/6) (came into force 24 February 2017)
  • Disclosure Guidance and Transparency Rules Sourcebook (Delayed Disclosure) Instrument 2017 (FCA 2017/7) (came into force 24 February 2017)
  • Enforcement (Money Laundering Regulations 2007) Instrument 2017 (FCA 2017/8) (came into force 24 February 2017)
  • Enforcement (Co-operative and Community Benefit Societies Act 2014) Instrument 2017 (FCA 2017/9) (came into force 24 February 2017)
EU Regulatory Updates

HM Treasury has published the response to its consultation on the transposition of MiFID II. The Consultation Report is concerned with, amongst other things, the following:

  • Third Countries and whether the UK should choose whether it requires a third country firm to establish a branch within the UK to provide MiFID investment services.
  • Data reporting services and the creation of a specific regime for Data Reporting Service Providers (DRSPs), rather than including them as regulated activities under the Financial Services and Markets Act’s (FSMA) Regulated Activities Order (RAO).
  • Unauthorised persons – MiFID II will apply to certain persons in circumstances where they are otherwise exempt from being authorised.
  • Power to remove board members: Should regulators rely on existing FSMA powers or should a new standalone power be created to remove a person from the management board?
  • Whether binary options should be treated as financial instruments

ESMA published a revision of its draft Implementing Technical Standards (ITS) on position reporting under the Markets in Financial Instruments Directive (MiFID II).

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