A radical shake-up of the UK’s GB£7bn trillion (US$9.06 trillion) investment market has been ordered by Britain’s financial regulator in an attempt to stamp out conflicts of interest and restore savers’ trust in the asset management industry.
The Financial Conduct Authority (FCA) told fund managers on Wednesday to overhaul their charging structures and improve governance standards following a two-year investigation into competition issues in asset management. The sweeping set of measures, which are yet to be finalised, would make the UK one of the toughest regimes in the world for asset managers as London considers its post-Brexit future.
The watchdog pressed ahead with the reforms despite heavy lobbying that followed ideas first floated in a deeply critical interim report last year. Its most controversial reform ideas include forcing investment managers to present investors with an all-encompassing fee and to put two independent directors on fund boards.
The FCA also unexpectedly turned its sights on private equity and hedge funds for a lack of transparency over charges. “While our market study did not include private equity funds we heard comments that this is a particularly opaque part of the asset management sector,” it said.
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