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Farrer & Co | FCA opens new Asset Management Authorisation Hub

On the 16th of October, the FCA launched their new Asset Management Authorisation Hub (the Hub). This is the first phase of an online portal designed to assist asset managers throughout the authorisation process. The Hub contains information on each stage of the authorisation process as well as assistance with the transition from application to supervision. At present the Hub offers services such as pre-application meetings and the provision of dedicated case workers for those seeking authorisation. The regulator is aiming to expand these services in 2018 by introducing quarterly surgeries, online bookings for pre-application meetings and the publication of further details regarding the FCA's criteria for regulatory approval.

The FCA's objectives for launching the Hub

In establishing the Hub the FCA has four fundamental goals:

  • it aims to clarify the FCA's expectations for firms hoping to enter the market;
  • it hopes to improve the accessibility of information about the authorisation process through the FCA website;
  • it aims to foster more meaningful engagement with new entrants; and
  • it hopes to provide end to end support for firms progressing through the authorisation process.

The development of the Hub reflects the regulator's push for a more transparent approach as set out in its FCA mission, which promises an authorisation process focussed "much more on finding solutions and ways to help". Nevertheless the FCA is keen to emphasise that the objective is not to lower entry standards into the market and that applicant firms will "need to meet the same rigorous standards as current firms before they receive authorisation".

Speaking at the FT Investment Management Europe 2017 conference, Megan Butler, the Executive Director of Supervision for the FCA, highlighted that the asset management market study showed weak price competition in some areas of the industry but that "it is not enough to ask investment managers, on your own, to make improvements in the name of competition." She reiterated the traditional critique that a lot of red tape put off new applicants, and recognised that "prospective entrants...would welcome more support from the FCA". The Hub hopes to encourage competition by offering a more transparent and personalised approach for firms wishing to become authorised.

Conclusion

With around £7 trillion under management in the UK, the asset management industry is clearly a significant part of our economy. It is, therefore, helpful to see the FCA trying to make the application process more business friendly. For example while case workers and pre-application meetings are not new initiatives these had previously not been as clearly signposted to applicants. The Hub together with the 'New Bank Start up Unit' launched by the FCA and PRA last year, suggest that the regulators acknowledge the importance of the financial services industry to the economy and are keen to embrace a more user friendly approach with firms.

If you require further information on anything covered in this briefing please contact Andy Peterkin, Katjana Cleasby, Fiona Lowrie or your usual contact at the firm on 020 3375 7000.

This publication is a general summary. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, October 2017

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