The UK’s FCA publishes a new regulation paper seeking feedback

With significant changes happening in the financial industry, the UK’s FCA (Financial Conduct Authority) recently published a new regulation paper. The paper is called “Updating and improving the UK regime for asset management,” and the regulator now seeks to get the public opinion of the proposals outlined in the document.

The goal is to better understand the investors’ needs in the asset management industry. Those interested in the financial sector can freely review the document and provide feedback and ideas for changes and improvements by May 22nd of this year.

The UK seeks to improve the AM sector even further

Currently, the companies in the UK manage more than 11 trillion GBP in various assets. This makes the country one of the biggest hubs for asset management. Now, by using the Future Regulatory Framework, the assessment of the future of financial services sector in non-EU countries, the regulator has a perfect opportunity to improve aset management regulation.

It can make the systems more modern and customized, and effectively address any and all requirements that the UK customers or markets might have. Apart from that, the financial watchdog also intends to make sure that the modifications done to the local sector remain in harmony with the globally-accepted standards, while still promoting tech innovation and advancements.

The FCA’s Director of Wholesale Buy-Side, Camille Blackburn, commented on the situation by saying that the UK can now improve its regime regarding asset management. She added that the regulator wants to hear the thoughts and opinions from a wide range of voices from all walks of life, and hear their suggestions about how the existing standards could be enhanced. More importantly, the regulator wants to know what should be a priority for consumers, firms, and even the wider, global economy.

The FCA continues with its 3-year growth promotion strategy

The FCA introduced a wide array of different concepts in this latest publication, including ideas on how to facilitate companies in using modern technology to improve user experience and efficiency. Furthermore, it also looked into how its own regulations can be enhanced so that they can help firms perform better at delivering assistance to wholesale and retail investors — whether they are UK-based or international players.

The regulator did not approve any of the proposals as of yet, as it wants to hear the feedback of concerned parties first. However, this new update to the standing asset management rules remains in line with the FCA’s three-year strategy meant to promote growth in the quality of local financial markets.

Interestingly, reports from October 2022 suggest that the UK is still the top global center for asset management, even post-Brexit. The country’s companies manage 11.6 trillion GBP in assets, as mentioned, which makes it the second-largest global hub, bested only by the US itself.

In 2021, the AM industry grew by 5% (600 billion GBP), and right now, 37% of all assets in Europe are under the management of UK companies. The UK also ended up being a rather convenient location for international investors, as 65% of its investment fund managers’ assets are stored there.