On 20 January 2020 the FCA published a Dear CEO Letter to Authorised Fund Managers (AFMs). The letter is directed at AFMs that predominantly directly manage mainstream investments, or advise on mainstream investments, excluding wealth managers and financial advisers. The letter outlined the FCA’s supervision priorities for those firms, and the FCA will expect firms to take appropriate action. Asset Management Firms (AMFs) may also be asked to take part in work related to these priorities.
The supervision priorities outlined in the letter are:
- Liquidity management –
- Firm’s governance –
- FCA expects AFMs to refresh their approach to governance and take necessary steps to improve in line with the Senior Manager & Certification Regime (SMCR). The FCA will be conducting reviews during the first 6 months of 2020 to evaluate the effectiveness of governance in the sector, with a particular focus on firms’ efforts to implement the SMCR.
- AFMs should also ensure that the boards of their regulated entities engaged in robust discussions and challenge important business decisions, without undue reliance on group structures. The FCA expects AFMs to recognise and take steps to…
