FCA Supervision Update
FCA Supervision Update
A recent speech by an FCA Director provided some insight into the future focus of the regulator in terms of supervision for the regulated funds industry. The FCA has now established “a new centre of excellence for investment funds which will oversee the cradle-to-grave lifecycle of UK investment funds.” The new Fund Authorisation and Supervision Team is responsible for regulated funds from the authorisation stage through to the fund’s termination or closure. The regulator’s aim is to identify where risk may exist and take early action to minimise investor loss.
The FCA re-emphasises the need for Managers and ACD’s to constantly check compliance with investment mandates and provide appropriate disclosure to investors. This reinforces the need for proper oversight by fund management companies even where they are administering funds using an outsourced model. Concentrating on UK authorised funds and in particular retail focused funds, the new team will use data tools and supervisory review to identify potential risk. The team is particularly interested in fund valuations – historically a risk area in itself and requiring strong oversight.
It is clear that the FCA will be stepping up its monitoring of management companies’ governance and oversight. Effective oversight is only made possible by the use of “skilled persons”, employed by management companies to monitor the accuracy of fund valuations or transfer agency record keeping for example. “Skilled persons” will tend to have a number of years’ experience up to senior level within fund administration and/or regulation. This type of specialist experience may be found in someone from either a fund management or third party administration background.
If you would like more information on employing a “skilled person” in an oversight role, please call Steve Johnson on 01277 263578 or email steve@acfinancial.co.uk.