The U.K. financial services watchdog is seeking input from money managers on its post-Brexit regulatory framework, which will seek to better support institutional and retail investors through innovation and competition.
The U.K. Financial Conduct Authority wants ideas for new rules setting out how money managers can operate in the U.K. The current rules are due to be reviewed under the incoming Financial Services and Markets Bill.
In a consultation that runs until May 22, the FCA is asking the £11 trillion ($13.26 trillion) asset management industry, which aspects of the existing laws should be retained and which could be improved.
Under the new bill and following the U.K.'s exit from the European Union, three large EU regulations are set to be retained in U.K. law: the Undertakings for Collective Investment in Transferable Securities directive, the Alternative Investment Fund Managers directive, and the Markets in Financial Instruments directive.
The FCA wants insights from managers as to which aspects of these directives need further clarification as well as which rules should no longer apply.
The FCA also wants to understand if there are potential costs and unintended consequences of any changes it could make to the money management regulation. The regulator said it wants to avoid creating unnecessary complexity for firms operating their businesses internationally.
The FCA is also asking if managers could benefit from regulation of tokenized instruments.
"The UK has an opportunity to update and improve the U.K. regime for asset management," Camille Blackburn, director of wholesale buyside, said in a news release Monday.
"We want to hear from a wide range of voices about how we can enhance the existing standards and what we should prioritize to bring the most benefits to consumers, firms and the wider global economy," she added.
Regarding the consultation, Leonard Ng, partner at law firm Sidley Austin in London, said in an emailed comment: "With the U.K. no longer in the EU, it makes perfect sense to try and create an overarching asset management regulatory framework that will not only make the rules easier for asset managers to follow, but also improve investor protection by applying consistent standards across manager types."
Chris Cummings, CEO of the Investment Association, which represents the money management sector in the U.K., welcomed the consultation.
"As the FCA acknowledges, this is already a highly regulated sector, and our members are working hard to manage and implement a busy regulatory agenda. The need for any further regulation must therefore be balanced against ensuring the U.K. remains a global competitive jurisdiction and an attractive place to do business," he said in an emailed comment.
