FCA meets with asset managers over new cost disclosure rules

Board-Room-Meeting-Room-Business-700.pngThe FCA continues to engage with the asset management industry on new European regulations as questions remain over how firms should report costs and charges.

After over a month since Mifid II and Priips came into force, concerns have been raised on how fund fees, in particular transaction costs, should be calculated under the two regulations as lack of standard practice makes like-for-like comparison difficult.

Money Marketing understands asset managers are holding conversations with the FCA on how costs reporting rules are implemented as well other Mifid II requirements.

As Mifid II rules around fee disclosure take effect, research found some fund managers’ costs have been shown to increase at least two times beyond the ongoing charges figure.

In an interview with Bloomberg in September, FCA chief executive Andrew Bailey discussed the impact of the new regulation on firms saying the “all-in fee” measure suggested in its recent asset management market study would not come as a radical shake-up for firms as EU regulation is already mandating similar requirements.

He said the FCA was eager to have “a constructive dialogue” with the industry to come out with solutions on fees reporting.

Elsewhere, Money Marketing reported in January that an FCA panel set up following the regulator’s asset management market study to create a template to improve charge transparency is to start testing a draft version this month.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. “…lack of standard practice makes like-for-like comparison difficult.”

    In other words, you can’t actually make like-for-like comparisons and so the whole exercise is at best meaningless. Most likely the sharp operators will milk that while the FCA twiddle its thumbs. The obsession with costs continues at the expense of value and quality…

    • Agreed, however I have heard compliance people say how can you demonstrate value and quality if the costs are not fully known. These people really do live in another world

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