![]() Whilst such a simplified regime would be welcomed by market participants and inherently make the Handbook easier to follow, this should be balanced against the costs and disruption to existing business models that may result from a significant change in the UK regulatory perimeter as it applies to asset management. This could set common standards for UK asset managers and reduce duplication which has arisen through implementing various EU-derived rules, including core conduct obligations such as conflicts of interest rules across the different fund regimes (see below). It covers a number of areas in this respect including by introducing the possibility of a common rulebook for asset managers to follow (without consolidating the existing requirements in COLL and FUND). The DP builds on the FCA’s agenda to simplify the existing regulatory framework for asset managers. ![]() We have identified some key themes arising from the DP which firms may find helpful when deciding how to respond: The FCA makes clear that the improvements suggested in the DP are not intended to further complicate the regulatory perimeter, and, in flagging the areas flagged for discussion, the FCA has kept in mind the overarching aim to protect investors from harm, increase consumer choice, and encourage competition in the market. Overall the DP touches on a number of cross-cutting themes for asset managers. ![]() The take-aways: exploring the macro-themes The DP sets out a range of ideas for modernising and tailoring the regime to meet this goal, including clarifying and enhancing the rules that apply to authorised fund managers ( AFMs) and depositaries, improving fund rules, and harnessing technology and innovation to support better outcomes from authorised funds. The aim is to support the development of the industry, while ensuring that UK investors have access to a range of good value products and are treated fairly. In publishing the DP, the FCA hopes to gather views about the existing UK rules to help it decide how its asset management regime should look in the future. Once this work starts, the FCA will need to move the detailed requirements for funds and asset managers currently set out in retained EU law into its own Handbook. As part of those reforms, HM Treasury will begin repealing retained EU law and replacing it with a UK framework. The Financial Services and Markets Bill, currently being considered by Parliament, will implement the outcomes of the review, which includes enabling HM Treasury and the financial services regulators to start implementing the FRF reforms. ![]() The DP follows the government’s conclusion in December 2022 of its Future Regulatory Framework ( FRF) review, which sought to ensure that the UK’s post-Brexit regulatory framework for financial services is tailored to best suit UK markets. On 20 February 2023, the Financial Conduct Authority ( FCA) published a discussion paper, DP23/2 (the DP), seeking views on the current UK regime for regulating funds and asset managers and setting out ideas for improving its regulation of the sector.
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