FCA fines asset managers in first use of its competition powers

On 21 February 2019, the FCA announced its first decision under its competition enforcement powers, finding three asset management firms have breached competition law. This decision is an important assertion of the FCA’s intention to use its competition powers – previous matters which involved the FCA were subsequently taken over by the European Commission under EU competition law. In its announcement, the FCA emphasised its commitment to taking enforcement action to protect competition, issuing a warning to the asset management industry to avoid undermining the proper process for setting the prices of shares in IPOs and placings and the potential impact failure to do so has on the UK’s capital markets.

To read our full briefing on the decision, please click here.

Managing risk: a disputes perspective (2017)

Herbert Smith Freehills recently held its annual disputes client conference exploring some key legal and compliance risks facing major corporates. Following opening remarks by Mark Shillito, head of dispute resolution for the UK and US, there were presentations on cyber security, Brexit, insurance, class actions, decision analysis, privilege and internal investigations.

A summary of the conference from our Litigation team is below – if reading the full version of this post, you can jump down to read more detail on any of the sessions by clicking on the relevant heading.

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UK: FCA Asset Management Market Study – Interim Report

The FCA has published its Asset Management Market Study Interim Report, which can be accessed here, with annexes. The FCA sets down a clear marker as to its direction of travel. Clearly uninhibited by Brexit on the horizon, it is entirely consistent with the thrust of recent European regulatory initiatives, driving hard a consumer focused agenda that champions value for money, transparency and accountability to investors. The report picks up on many of the themes that have recently received material press attention, including:

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UK: Concurrent competition powers for the Financial Conduct Authority and Payment Systems Regulator

On 1 April 2015 the Financial Conduct Authority (FCA) obtained new concurrent competition powers under the Competition Act 1998 (CA98) and the Enterprise Act 2002 (EA02) for financial services in the UK. The Payment Systems Regulator (PSR) has also obtained competition enforcement powers for certain UK retail payment systems. Continue reading

UK: FCA’s competition remit – new Memorandum of Understanding between the CMA and FCA sets out framework for co-operation between both regulators

The Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA) have agreed a new Memorandum of Understanding (MoU) which sets out a framework for co-operation between the two regulators in relation to competition issues, consumer protection, access to payment systems and the sharing of information for the performance of their functions.  The MoU, dated 12 June 2014, replaces an earlier MoU of April 2013 between the CMA’s predecessor, the OFT, and the FCA. Continue reading

UK: BoE and FSA relax the barriers to entry for new bank entrants

The FSA and the Bank of England (BoE) have published the results of their review into barriers to new entrants to the banking sector.  The Review sets out significant changes to regulatory requirements and authorisation processes which, taken together, aim to reduce some of the regulatory barriers to entry into the banking sector and thereby facilitate an increased competitive challenge to existing banks.   The reduction of barriers to entry will be welcome news to new entrants to the banking market, although it is interesting to note (since under the new regime, it is the Financial Conduct Authority (FCA) that will have the direct competition remit) that it is the concessions that the Prudential Regulation Authority (PRA) will make on capital and liquidity that are most likely to facilitate increased competition.

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UK: Financial Conduct Authority (FCA)’s Risk Outlook and Business Plan for 2013 published

The FCA’s Risk Outlook (FCA RO) has been published today, setting out the regulator’s current thinking on conduct in financial markets by analysing the root causes and emergence of conduct risk, and identifying the forward-looking risks that the FCA deems pose the greatest risk to its objectives.  Whilst the document inevitably focuses on consumer detriment arising from the wrong products ending up in the wrong hands, there is welcome recognition that this needs to be balanced against the detriment to society of people not being able to get access to the right products.  The FCA stresses its collective responsibility with industry to co-operate in acting to address these challenges.

The FCA’s Business Plan, also published today, confirms that the FCA’s strategic priorities are driven by the key forward-looking risks in the FCA RO, as well as the FCA’s operational objectives, and the need to address crystallised risks such as LIBOR, PPI and Interest Rate Swaps.  The key priority risks identified in the FCA RO are set out below together with the work planned to address them.  We also summarise the ongoing work the FCA plans to meet its operational objectives, including enforcement and financial crime priorities.   Martin Wheatley commented that “achieving the FCA vision is in all of our interests, not only socially, but also financially”.  The FCA’s budget – which will be wholly separate from that of the PRA – comes in at £445.7m, just over 80% of the FSA’s budget as single regulator for 2012/2013.

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