FSA intensifies its regulatory oversight of the Marketing of Unregulated Collective Investment Schemes

The FSA is intensifying its supervision of the marketing of Unregulated Collective Investment Schemes (UCIS). It has announced a thematic review to look at the financial promotion of, and advice giving processes in relation to these schemes. It will shortly be sending out a questionnaire to a sample of firms, and soon afterwards a number of firms can expect a visit from the regulator.

This investigation comes on the back of recent FSA enforcement activity and a Financial Times front page report yesterday. The report sensationally claimed that one in five hedge fund managers misrepresent facts when promoting their funds. Providers of all types of UCIS will not only wish to ensure that their promotions are targeted at those limited groups they can promote to legally, but also that they meet the regulatory standard of being demonstrably fair, clear and not misleading.

The FSA typically uses these investigations to identify the standards of compliance with their rules and market practice. When the work has been completed, the FSA will publish its generic findings and guidance, as well as any further steps it will take to improve investor outcomes. As a result of this work the FSA will identify firms with inadequate procedures or compliance arrangements, or where it is concerned there has been inappropriate inducement or advice on the purchase of a UCIS.  In these circumstances the FSA may take enforcement action against the firm and its senior management.

IMS is the leading provider of independent regulatory advice to providers of UCIS in the UK. We are able to help firms ensure their adherence to exacting FSA marketing standards in a variety of ways. This may range from reviewing the control processes around a firm’s financial promotions, to considering the way that a firm satisfies itself it is only marketing to allowable investors, to detailed reviews of marketing and promotional material.

If you would like to discuss how IMS Consulting is able to help your firm in relation to its Marketing of UCIS, or any other aspect of FSA regulation, please contact, Stephen Burke, Chris Rexworthy, Jon Wilson, or your usual IMS contact.

If you would like to discuss further how IMS Consulting is able to help your firm in relation to its Marketing of UCIS, or any other aspect of FSA regulation, please contact, Stephen Burke, Jon Wilson, Chris Rexworthy, or your usual IMS Consultant.

15 October 2009

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