Investment management update - April 2024

• The Transition Finance Market Review (TFMR), a government-initiated independent review, has issued a call for evidence on how to make the UK a global hub for transition finance. Among other things, the review will consider how the Transition Plan Taskforce and other disclosures can support this ambition. The call for evidence closed on 25 April 2024.

Call for Evidence | The Global City

• On 25 March 2024, the FCA published the results of a review of host AIFMs which use secondees from appointed representatives to manage an AIF. The 2023 review identified potential harm from a lack of oversight of seconded staff, insufficient due diligence on financial crime, and inadequate calculation of the number of AIFs and appointed representatives when allocating capital. The FCA recommends firms review its findings and guidance.

Alternative investment fund manager (AIFM) hosting | FCA

• On 22 March 2024, the FCA published the results of its Thematic Review of Retirement Income Advice and a related ‘Dear CEO’ letter to advisers. The FCA highlights several areas for improvement including recommending the firms have a Centralised Retirement Proposal for customers, better assessment of risk in the decumulation phase, better accounting of an individual’s circumstances when determining income withdrawals, and better definitions of what firms will provide in ongoing advisory services. The FCA will follow up with firms and undertake supervisory actions to mitigate harm.

TR24/1: Retirement income advice thematic review | FCA

Dear CEO letter: Thematic Review of Retirement Income Advice | FCA

• On 15 March 2024, the FCA announced a review of regulated firms’ treatment of customers in vulnerable circumstances. The FCA will publish its conclusions before the end of 2024.

Review of firms' treatment of customers in vulnerable circumstances | FCA

• On 7 March 2024, the FCA published an update to the draft UK Listings Rules instrument. The update supersedes the draft instrument provided in Annex 1 of CP23/31 and forms part of the overall consultation process. The consultation closed on 22 March 2024.

CP23/31: Primary Markets Effectiveness Review: Feedback to CP23/10 and detailed proposals for listing rules reforms | FCA

UK Listing Rules Instrument 2024 | FCA

UK Listing Rules (consequential amendments) instrument 2024 | FCA

• On 7 March 2024, HM Treasury issued a consultation on the creation of a new platform to allow private companies to trade their securities on an intermittent basis. The consultation on the Private Intermittent Securities and Capital Exchange System (PISCES) was open until 17 April 2024.

Consultation___Private_Intermittent_Securities_and_Capital_Exchange_System.pdf | GOV

• On 6 March 2024, the Chancellor confirmed at the Spring Budget that the UK will regulate ESG ratings providers. HM Treasury will publish its response to last year’s consultation, and proposed legislation, later in 2024.

Future regulatory regime for Environmental, Social, and Governance (ESG) ratings providers | GOV

• On 1 March 2024, the FCA wrote to asset management and alternatives firms with an update on its supervisory priorities and strategies for the sector. The ‘Dear CEO’ letter outlines value assessments, Consumer Duty, ESG, and liquidity risk management, among other topics, as its priorities. In addition, the FCA says that it will develop reforms to the onshored AIFMD, UCITS and MiFID legislation in 2024. The FCA states that firms’ boards should review and apply the letter to their firm as required.

Portfolio letter: Asset Management & Alternatives Supervisory Strategy - interim update | FCA

• On 26 March 2024, ESMA published a consultation on external reviewers under the Green Bonds Regulation. The consultation includes proposed Level 2 rules on the registration requirements and supervision of external reviewers, with an aim to produce an efficient system that is consistent across the EU. The Green Bonds Regulation will apply from 21 December 2024. The consultation will close on 14 June 2024 and ESMA says that it will submit draft rules to the European Commission before 21 December 2024.

ESMA consults on rules for External Reviewers of EU Green Bonds