FCA probes asset managers' use of 'transition' services

The Financial Conduct Authority (FCA) is probing asset managers' use of "transition management" services over concerns end investors' interests are being disregarded.

Transition management usually involves firms hiring large custodian banks to help it make sweeping changes to a portfolio of securities, such as when two funds are merged into one larger vehicle. The new City regulator, one of the replacement organisations for the Financial Services Authority, has written to asset managers and plans to make site visits to scrutinise firms' use of these services, according to a report in the FT. It has already indicated its interest in transition market participants. In its 2013/14 business plan, the FCA raised concerns over transparency and market con...