UNITED KINGDOM: FCA Extends Deadlines for Publishing Fund Reports and Accounts

Monday April 6 2020

The FCA have announced that they are giving firms extra time to produce their annual and half-yearly reports and accounts due to the impact of COVID-19.

Extra 2 months for annual reports

Where the authorised fund managers (AFMs) of UK UCITS schemes and non-UCITS retail schemes (NURS) need extra time to complete their fund’s annual reports, this temporary relief will permit an additional 2 months to publish them. Firms are required to inform the FCA if they place to avail of the filing relief.

Extra month for half-yearly reports

For half-yearly reports, the relief permits one extra month to publish. Firms are also required to inform the FCA if they are using the extension.

This will help fund managers to be transparent with investors, as the extra time will ensure that they can produce reports that are accurate. The FCA expect firms to continue to uphold the best interests of their investors at all times.

Using the additional time

Currently, funds authorised under the UCITS Directive must publish audited annual reports and accounts within 4 months of the annual accounting reference date. This also applies to UK authorised open-ended funds operating as NURS. In addition, AFMs must publish a statement setting out their assessment of value in the fund’s annual report, unless the AFM provides the statement in a separate composite report.

The Covid-19 pandemic presents operational challenges for funds’ reporting processes. Preparing annual and half-yearly reports and accounts requires firms to engage internal and external parties. While most can work remotely, Covid-19 restrictions may significantly slow the process and make it difficult to meet the deadlines.

Nevertheless, the FCA expect firms to publish reports on time, if they can publish within the usual time limits without compromising the quality of the reporting and in line with the current health guidelines.

Temporary relief

Under the temporary relief, the FCA will not begin enforcement action for breaches of the FCA rules set out in the Policy section below if AFMs publish annual reports and assessment of value reports within 6 months of their accounting year-end date.

Funds authorised under the UCITS Directive must publish half-yearly reports and accounts within 2 months of the end of the half-yearly accounting period. This also applies to UK authorised open-ended funds operating as NURS. Under the temporary relief, the FCA will not commence enforcement action for breaches of the FCA rules specified in the Policy section below if AFMs publish financial statements within 3 months of the end of their half-yearly accounting period.

What AFMS need to do

AFMs that wish to use the additional time should:

• promptly inform the fund’s depositary and auditors, and
• email the FCA details of the funds this will apply to and the intended new date of publication: ukcis@fca.org.uk

Policy details

COLL 4.5.14R requires the AFM to make available and publish the long reports prepared in line with COLL 4.5.7R within 4 months after the end of each annual accounting period and within 2 months after the end of each half-yearly accounting period. Under COLL 4.5.7R, the statement on the assessment of value must be made available to unitholders and published annually in the same manner as the annual long report, unless the AFM produces a composite report for the funds which it manages.

This temporary relief is without prejudice to the application of the rules in GEN 1.3 (Emergency) which can provide temporary relief from rules where compliance with the rule is impracticable for the firm. The temporary relief provided by the rules is subject to various conditions which are set out in GEN 1.3.

How long this temporary policy will last

The policy is intended to be temporary while the UK faces the extreme disruption of the Covid-19 pandemic and its aftermath. The FCA will keep its application under review. When the disruption abates, the FCA will announce how they will end the policy in a fair, orderly and transparent way.

Click on the above link for further information.