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IMS Asset Management Regulatory Update 2009 - Issue 3, August
Welcome to the third issue for 2009 of the regulatory newsletter from IMS Consulting, the largest independent asset management and securities regulatory consultancy in the UK. Our newsletter rounds-up some of the more important recent regulatory changes for asset managers and securities firms, focussing on FSA related developments.
We commence with the recent publication by the US Government regarding its proposal to amend the Investment Advisers Act 1940 and introduce registration requirements for Private Funds, their advisers and a limited ‘foreign private adviser’ exemption from registration.
We have also covered the widely publicised Walker Review which relates to corporate governance arrangements in UK banks. Hanging off the Walker Review, the FSA recently issued a policy statement which extended the FSA’s reach to overseas senior management.
We also take a look at the FSA's recently published results of its thematic review work on firms’ systems and controls relating to UK financial sanctions, in which it noted that there was much room for improvement.
As expected the FSA extended its short selling disclosure regime and with the recent relaxation of the large exposure requirement by the EU expected to take effect by the 31st December, 2010, the FSA disappointedly commented that it would not appear possible to apply for a waiver from the requirement before this time.
Further to our coverage of financial crime and regulatory sanctions, the FSA published a framework to create a consistent and more transparent means for calculating financial penalties which could mean that some fines treble in size.
We hope that you find this newsletter to be relevant and informative. If you have any further questions please contact Scott Wilson, Stephen Burke or Chris Rexworthy. Alternatively telephone 
020 7408 2448 to speak to your usual IMS contact.
Please click here for a PDF of the whole content of this newsletter (printer friendly version).
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US Treasury Proposals for Private Fund and Adviser registration The EC Alternative Investment Fund Management directive (“AIFM”) may drive hedge fund managers out of Europe, may discriminate against the marketing of non-EU based funds and the impetus for the Directive is protectionism. Now the US Government has published its own proposals and these, at first sight, seem at least as unappealing to alternative investment managers. |
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The Walker Review and extending the Significant Influence Function The recently published and widely publicised Walker Review relates to corporate governance arrangements in UK banks. However it appears to have provided the FSA with further impetus with respect to the regulator’s extension of the significant influence function regime, which will affect many wholesale investment firms. |
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Market abuse, financial crime and regulatory sanctions update Following on from our newsletter article ‘Financial Crime’ in our Issue 2, 2009 publication, the FSA continues its campaign to tackle market abuse and improper behaviour, and has published a host of successful cases brought against individuals and firms. The regulator has also proposed a new framework for penalties, including higher fines. |
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Financial Sanctions - what the FSA expects The FSA recently published the results of its thematic review work on firms’ systems and controls relating to UK financial sanctions, in which it noted that there was much room for improvement. |
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Short selling disclosure regime - an update As reported by IMS at the time, the FSA on 30th June 2009 extended the existing short selling disclosure regime. More recently, CESR has proposed a harmonised pan-European short selling disclosure regime. |
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Large exposures - slight return The FSA has recently commented on the removal of large exposure requirements for many investment firms. They intend to make the amendment on 31st December 2010 and it would not appear possible to apply for a waiver from the requirement before this time. |
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FSA GABRIEL reporting update The FSA's revision of its Integrated Regulatory Reporting (“IRR”) or Gabriel rules came into effect on the 6th of July 2009. In addition, the FSA has recently reported on the findings of its thematic review of financial reporting by small firms. |
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FSA proposes new Liquidity requirements The FSA has consulted on how to strengthen liquidity standards (CP08/22) proposing the introduction of new Individual Liquidity Assessment Standards (“ILAS”). The regime and proposals are complex for Full Scope firms but the FSA offers a much simpler approach to Limited Licence and Limited Activity firms focusing on firms compliance with systems and controls requirements. |
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FSA regulatory fees and levies for 2009/10: An IMS guide An article on FSA fee rates and Financial Ombudsman Service levies for 2009/10. The contribution the FSA requires from firms this year has increased by 35.8% from last year. |
