578 proposed investment fund and sub-fund launches have been withdrawn after going through FCA scrutiny over the past ten years.
According to a Freedom of Information request, an average of 52 proposals a year have being withdrawn since 2006.
The FCA says to authorise a new fund it has to liaise with the authorised fund managers and make sure any revision to the application is in “an acceptable form” otherwise, if rejected, the fund managers would withdraw applications.
The regulator also says withdrawals could happen for a variety of reasons which might not be related to unacceptable proposals.
Gbi2 managing director Graham Bentley says often applications will have areas missing, be too vague or have “complicated objectives”.
He says: “The fund manager may not want to make changes without reflecting on it first, so the manager withdraws the application pending revisions.”
In 2011, when financial markets were in the midst of the Eurozone debt crisis and global events such as the Arab Spring, 91 funds application were rejected.
Bentley says: “The manager puts in an equity fund application but then withdraws it given the market downturn and a flight to bonds.”
Money Marketing has recently reported on how figures on the number of new fund launches compared with closures support claims that there are barriers of entry and a lack of competition in the asset management sector.