FCA Dear CEO letters on asset management and alternatives supervision strategy
Regulatory Updates | 20/01/20
The Financial Conduct Authority (FCA) has published Dear CEO letters on its supervision strategy for asset management firms and alternative investment firms. Both letters set out the FCA’s view of the key causes of harm to consumers, and outline the FCA’s supervisory priorities.
In its letter to asset management firms, the FCA outlines its supervisory priorities as liquidity management, the governance of firms, product governance, LIBOR transition, operational resilience, firms’ implementation of the remedies arising from the Asset Management Market Study, and firms’ readiness for UK withdrawal from the EU.
In its letter to alternative investment firms, the FCA’s supervisory priorities are described as:
• investor exposure to inappropriate products or levels of investment risk
• client money, and custody asset controls
• market abuse controls
• risks to market integrity and disruption (from, for example, deployment of high risk investment strategies)
• systems and controls around anti-money laundering and anti-bribery and corruption
• issues related to the UK’s withdrawal from the EU.