The FCA's Asset Management Market Study
The Financial Conduct Authority has published new rules and guidance which aim to improve the quality of information available to consumers about the funds in which they invest. The new rules come into force on 7 August 2019 for UK-registered funds which require fund groups to:
- Describe fund objectives and investment policies in more consumer-friendly language
- Explain to investors why or how funds use particular benchmarks or, if they do not use one, how performance should be assessed
- Reference benchmarks, when used, consistently across the fund’s documents
- Quote past performance, when shown, against each benchmark used as a constraint on portfolio construction or as a performance target
- Calculate a performance fee, when quoted in the prospectus, based on the fund’s performance after the deduction of all other fees.
If any significant changes to a fund are required in order to meet the new rules and guidelines, fund groups will need to give investors 60 days’ notice. At this stage it is not known exactly how many funds will be affected. You will get information sent via post if any funds you hold are significantly impacted and can find updates on the Fund updates part of the site.
Further details on the new rules and guidance can be found on the FCA’s website.