Information about FCA's oversight of rules on production of value statements by asset managers 2019-2021 – September 2021

Information regarding the FCA's oversight of rules regarding the production of value statements by asset managers.

From 30 September 2019 up until the date this request is answered, please provide the following information:

1. The date of any meetings between the FCA and any third parties regarding value statements. If the search becomes too wide - for example meetings have involved multiple FCA teams, please refine this request to senior level staff in order to meet the cost provisions of the Act.
2. The names of the individuals present from both the FCA and the third party at these meetings.
3. Details of any formal supervisory or enforcement activities carried out by the FCA regarding compliance with rules around value statements. These can be kept anonymised so as not to breach FSMA exemptions under the FOI Act regarding ongoing regulatory investigations.
4. Any and all aggregate evidence collected by the FCA as to levels of compliance with value statement rules or the efficacy of value statements in achieving their desired policy objectives.
5. Whether the FCA is currently planning any further market updates on value statements, for example good and bad practice guidance, and if so an estimated date for this update(s).
6. The number of firms breaching the requirement to have at least two independent directors on their board.
7. The number of firms breaching the requirement to have independent directors making up at least 25% of their board.

Our decision on your request

Having reviewed your request, we estimate that responding to questions 3 and 4 would exceed the cost limit allowed under FOIA and therefore the exemption under section 12 (cost of compliance exceeds appropriate limit) applies.  For more information on why this exemption applies, please see Annex A below.

Our normal procedure when citing the cost limit is to offer a refinement detailing the information we could consider within cost, without providing further information in answer to any other part(s) of the request.  However, because of the length of time it has taken to respond to you, we wanted to provide the fullest response possible today, as set out below. We will address each point in turn.

1.     The date of any meetings between the FCA and any third parties regarding value statements.  If the search becomes too wide - for example meetings have involved multiple FCA teams, please refine this request to senior level staff in order to meet the cost provisions of the Act.

2.     The names of the individuals present from both the FCA and the third party at these meetings.

With the exception of the meetings held between 18 May 2021 and 7 June 2021 (inclusive), Mr Garry Murdoch represented the FCA at all the meetings.  We are unable to disclose the names of any other attendees as these constitute their personal data.  These are the names of current or former FCA staff below management level, as well as the names of any third-party attendees.  This is because it is the FCA’s policy not to disclose the names of staff below the level of Manager and Technical Specialist, as well as the names of representatives of other organisations.  Therefore, for the reasons set out in Annex A, we consider that section 40 (Personal Information) of FOIA applies.

3.     Details of any formal supervisory or enforcement activities carried out by the FCA regarding compliance with rules around value statements.  These can be kept anonymised so as not to breach FSMA exemptions under the FOI Act regarding ongoing regulatory investigations.

In respect of any ‘formal supervisory’ activities carried out by the FCA, you may be aware that we visited a sample of authorised fund managers (AFMs) between July 2020 and May 2021 to review their assessments of value (AoVs) for the funds they operate.  On 6 July 2021 we published the findings of this review, which can be found on our website here.

The FCA is not currently carrying out any formal enforcement activities regarding compliance with rules around value statements by asset managers.

4.     Any and all aggregate evidence collected by the FCA as to levels of compliance with value statement rules or the efficacy of value statements in achieving their desired policy objectives.

Key findings from the review can be found in the document mentioned above and are available on our website here (see point 5).

5.     Whether the FCA is currently planning any further market updates on value statements, for example good and bad practice guidance, and if so an estimated date for this update(s).

As set out in our published findings referred to above, we intend to review firms again within the next 12 to 18 months and we will assess how well firms have reacted to our feedback.

6.     The number of firms breaching the requirement to have at least two independent directors on their board.

We do not hold a record of this information.

7.     The number of firms breaching the requirement to have independent directors making up at least 25% of their board.

We do not hold a record of this information.

When we refuse a request because it exceeds the cost limit, it is our policy to provide you with advice and assistance on how you can refine or limit your request so that it is more likely to fall within the cost limit.  However, in this instance, due to the volume of information we hold in respect of questions 3 and 4, we are unable to suggest a way in which your request can be refined to come within the cost limit.