The FCA has proposed a package of reforms that would tailor requirements proportionately for asset managers, cut costs for firms and give better data to supervise the sector more effectively.

A large share of the £128m-a-year savings are expected to come from simpler Fund Reporting for Asset Management Entities (FRAME) requirements. These would be tailored to the specific circumstances of UK industry, delivering better data to make regulation more efficient.

The package would also modernise and simplify Alternative Investment Fund Managers Directive (AIFMD)-related rules dating from 2013.

The updated rules would be fit for today’s UK market: more flexible, tailored and proportionate, while maintaining clear standards, especially for firms serving retail clients.

A consultation by the regulator is also seeking to simplify remuneration rules for the relevant firms, which are ones solely regulated by the FCA, by replacing overlapping remuneration codes with a clearer, more proportionate framework, while maintaining appropriate standards and safeguards.

Simon Walls, executive director, markets, at the FCA, said:

‘By tailoring the regime for UK asset managers, we can collect better data while also saving industry 10s of millions of pounds a year.

‘With a sharp focus on proportionality, we can particularly boost freedom for smaller firms to find new ways to achieve the same high standards.

‘Together, the proposals are a practical example of the FCA’s strategy in action: becoming a smarter regulator, which is more efficient and effective, using proportionate data collection to better identify risk.’

The FCA is consulting on the proposals and is inviting feedback before making final decisions.

Source: FCA