EU Capital Markets Union: FCA Responds to European Commission Green Paper
The FCA published its response to the European Commission's green paper on 27 May 2015 on building a capital markets union (CMU).
The FCA welcomed the Commission's initiative and set out the following overarching perspectives that it believes to be critical in enabling the development of CMU to be as effective as possible:
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Greater supply of investor finance will require appropriate investor protection. The FCA believes measures to promote market access and investor protection should go hand in hand.
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Focus on effective implementation of existing and already planned legislation. There is already a substantial body of legislation promoting a single capital market in Europe, and so the main building blocks are already in place.
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More consistent supervision within the current framework could bring significant benefits. The functioning of integrated capital markets requires consistent application and supervision of the single rulebook across member states.
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Legislate only where necessary and embed the better regulation agenda. The EU better regulation approach should underpin the completion of the existing legislative programme and new initiatives.
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Embrace the opportunities of new technology and potential gains from effective competition. Actions to facilitate digitalisation to respond to investor preferences and give investors greater control over their investments should be encouraged. However, digitalisation also provides challenges, particularly around security, data protection, investor protection and maintaining fair competition, which need to be addressed.
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European markets need to be embedded in a globally competitive landscape. The FCA believes that steps to attract capital should not be limited to the EU. Action should be taken to ensure that the EU is an internationally competitive and attractive place to invest. The Commission should therefore ensure that EU legislation as far as possible is aligned with wider global standards.
The FCA also set out priorities for action that it believes should be important elements of the CMU action plan. These relate to enhancing the supply of investor finance and demand for capital.
Read the FCA's Response to the European Commission Green Paper: Building a Capital Markets Union
AIFMD: FCA Introduces New Forms to Notify Material Change Under the AIFMD National Private Placement Regimes
The FCA introduced new forms on 21 April 2015 to notify material changes to information previously submitted to the FCA by alternative investment fund managers (AIFMs) in their marketing notifications under the UK’s national private placement regimes (NPPR) for Non-EEA AIFs managed by full EEA AIFMs implementing (AIFMD Article 36), for AIFs managed by Non-EEA AIFMs (AIFMD Article 42) and by “small” non-EEA AIFMs.
Under the UK’s Alternative Investment Fund Managers Regulations 2013, AIFMs are required to give the FCA written notice of any material change to the information previously provided in a NPPR notification. In the case of a planned change, the AIFM is required to submit the notice at least one month before implementing the change, or in the case of an unplanned change, immediately after the change has occurred. The new forms are intended for use in connection with these requirements.
Please note that these NPPR notification requirements are entirely separate from the requirements for FCA authorised full-scope UK AIFMs to notify material changes to the conditions of their authorisation, including for new AIFs under management.
The new forms are available on the FCA’s website at:
The FCA has also published a guidance note to assist firms in completing these forms.
Investment Association Publishes New Statement of Principles for Investment Managers
The Investment Association (IA) published a three-page statement of principles for investment managers on 28 April 2015.
The statement is intended to set out common principles that "underpin the mindset and behaviour of investment managers". The core principle is that investment managers always put clients' interests first and ahead of their own. The remaining nine principles focus on issues such as client money and assets, helping clients achieve value for money, transparency of costs and charges, and disclosure and communication with clients. Principle 9 requires that firms maintain a corporate culture that sustains the principles, with senior management leading by example.
IA members that sign up to the principles should: (1) set out on their websites how they apply the principles and ensure they are properly embedded, (2) explain how they identify and manage key issues and conflicts of interest that could present challenges to their alignment and (3) confirm annually that they have effective processes in place to ensure they act consistently with the principles, and explain how they are addressing any issues that their monitoring of the principles identifies.
The IA will maintain a list of signatories on its website from 31 July 2015,with a link to members' descriptions of their approach from 1 January 2016, and a link to annual reports on the principles from 1 January 2017. The IA intends to review the principles in January 2017.
Read the press release "The Investment Association Publishes Statement of Principles for Investment Managers" (28 April 2015)
