CP18/9: Second consultation on remedies following the asset management market study

This consultation paper proposes rules and guidance to improve the quality, comparability and robustness of information available to investors.

Read the summary of CP18/9 (PDF)

Read the full consultation (PDF)

The proposals seek to address our concern that fund objectives are not as clear or specific as they could and should be, and that the benchmarks a fund my have are not always presented consistently and appropriately.

We propose to publish guidance on how we expect fund managers to make their funds’ objectives more useful to investors. This sets out what we expect when funds disclose their objectives, and reiterates that descriptions of objectives in key information documents should avoid jargon. The guidance also explains when we expect a fund to disclose that its portfolio construction is in practice constrained relative to a benchmark.

We are also consulting on proposals so that, if a fund has benchmarks, their use must be explained and referenced consistently in consumer facing documents. This includes a proposal to ensure that benchmarks are shown consistently against fund past performance.

The proposals related to objectives have been informed by a working group, which included a wide range of stakeholders, including asset management firms and investor groups. We are grateful for the time and expert input of this group, which has helped to shape our proposals. 

The consideration of benchmarks and their uses in this CP is distinct from the new EU Benchmarks Regulation (BMR).

Who this applies to

These proposals apply to UK authorised fund managers in respect of their management of authorised funds.

They may also be of interest to others in the investment management industry, including delegated portfolio managers, depositaries of authorised funds, and retail and professional investors, including advisers.

Next steps

This consultation has now closed. We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.