Changes on the horizon for the Regulatory Umbrella Industry – will your business be affected?
The Appointed Representative regime in the UK remains an area of intense regulatory scrutiny. The UK’s Financial Conduct Authority (FCA) set out its latest policy statement on Appointed Representatives last year. This followed a number of events within the asset management industry, which the FCA defined as causing consumer harm due to a lack of due diligence (1).
As part of its PS22/11 policy statement, the FCA asked that regulated principals enhance their oversight of Appointed Representatives effectively by ensuring the adequacy of systems and controls, as well as the proficiency of their internal resources tasked with continually monitoring their Appointed Representatives.
New requirements for operations
Companies delegating under the current UK Appointed Representative regime may want to revisit their operational arrangements in anticipation of further changes. This could bring in additional reporting and/or oversight obligations which could be difficult to meet without further automation of essential processes.
For the Appointed Representatives themselves, transitional arrangements already in place governing this regime include a requirement that they have the systems and processes to effectively report into the regulated umbrella they are using.
These requirements are already paving the way towards a scenario where we could see further demands from the regulator for verifiable interaction and reporting between principals and Appointed Representatives that go far beyond current manual processes.
In December, the FCA issued a Section 165 request for more information from principal firms on their Appointed Representatives, which could form the basis for additional regulation in this area.
How Truss Edge can help!
Truss Edge can provide technology solutions for both principal firms and their Appointed Representatives, especially suited to the dynamic oversight and reporting required for sophisticated asset management firms.
Proven and attested institutional operations management, regulatory and compliance reporting is enabled by our award-winning proprietary and agile investment software. We deliver to the highest industry standards.
Our pricing models and the modularity of our systems mean this automation can be adapted to the needs of even smaller FCA-regulated principal firms.
Truss Edge is already used to providing regulatory and risk reporting on a daily basis by large fund managers. We can assist with your needs if you are currently revisiting your operational and oversight requirements, either as a regulatory umbrella provider in the UK or as a reporting Appointed Representative.
(1) PS22/11: Improvements to the Appointed Representatives regime (fca.org.uk)