Wednesday April 1 2020

News Source: Fund Regulation

Focus: General - Fund Regulation

Type: General

Country: UK

Firms providing portfolio management services or holding retail client accounts that include leveraged investments are currently required to inform investors where the value of their portfolio or leveraged position falls by 10% or more compared with its value in their last periodic statement, and for each subsequent 10% fall in value (COBS 16.4.3 EU). Firms have raised concerns about the impact on consumers and the operational burden of this in a highly volatile market.

In a Dear CEO letter published yesterday evening, the FCA stated that that they have no intention of taking enforcement action where a firm:

  • has issued at least one notification to a retail clients within a current reporting period indicating their portfolio has decreased in value by at least 10%; and
  • subsequently provides general updates through its website, other public channels (such  as social media) and/or generic, non-personalised client communications. These communications should update clients on market conditions, explain how clients can check their portfolio value and invite clients to contact the firm if they wish; or
  • chooses to cease providing 10% depreciation reports for any professional clients

The FCA will adopt this approach for a period of 6 months (to 1st October 2020).

Click on the above link for further information.