The Financial Conduct Authority (FCA) has launched an asset management authorisation hub, which seeks to encourage competition in the industry by offering better support and guidance on regulation to new entrants into the market.
The launch is the first phase of the hub, which offers guidance to new market enterants via access to pre-application meetings, dedicated case officers and the new website portal, which can be accessed by clicking here.
Its aims are to aid firms' understanding of how the FCA works, improve the ease of making a complete submission, and transition from an authorisation to a supervision regime.
The hub will also look to clarify regulatory expectations, and foster better engagement between the FCA and the firms it regulates.
Future phases of the regulator's plan, to be rolled out next year, will feature open days and surgeries for firms.
Commenting on the launch, FCA executive director of supervision - investment, wholesale and specialists, Megan Butler said: "The asset management sector is important for the UK economy.
"We want to aid new entrants to the market and the hub will help new firms understand us better as an organisation."
Regulation partner at law firm Ashurst Jake Green welcomed the hub's launch and said it should lead to a "far more efficient practical process".
"This is more similar to how [Luxembourg regulator] the CSSF and Central Bank [of] Ireland address applications," he added.
"While no system is perfect, this must be viewed as a step in the right direction for both industry and the FCA in terms of its expertise and experience."
The future of the hub
Last year, calls for an initiative that would support asset management start-ups were made by financial thinktank New City Initiative (NCI), which has helped the regulator develop the hub.
Outlining the FCA's plans in a September speech, Butler said: "We know it is not enough to ask investment managers - on your own - to make improvements in the name of competition. We need to play our own part."
Butler said the hub will aim to ensure the "best investment managers are not put off of operating in the UK by avoidable barriers to entry".
"We want to foster more positive, personalised engagement between the FCA and market entrants," she said.
"And we want to provide end-to-end support for firms moving through the start-up cycle."
From next year, the FCA intends is to expand this to offer more support, including quarterly surgeries and online booking for pre-application meetings. It will also publish more detail on entry criteria and application details.
However, Butler stressed the hub "is not designed to lower industry standards".
She said: "We have no intention of presiding over a decline in quality. So entrants will need to meet the same rigorous standards as current firms before they receive authorisation."
The FCA approved 204 new firms in 2016, but Butler admits the number could be dampened by the difficulties of having to "navigate regulation".
She referred to a similar project run by the Prudential Regulation Authority (PRA) start-up banks, saying it was "a good indicator" of the asset management sector's "social and economic importance" that it was receiving similar support.
"Public value is integral to our objectives," said Butler. "Hence we want your clients to benefit from the best new ideas and businesses in investment management.
"Our aim is to achieve that goal, at least in part, by providing greater clarity, and by helping asset managers to navigate our processes."
Jamie Carter, chairman of New City Initiative and chief executive of Oldfield Partners welcomed the announcement: "NCI has always championed boutique firms and start-ups, and we are delighted the FCA shares our vision. For the last year, we have been calling on the FCA to launch an asset management start-up hub, and are extremely pleased that, through dialogue with us and others in the industry, they have adopted this idea.
"Phase one commences in October and covers the main proposals we made in our policy paper relating to the provision of advice and improvement of the application process. We are confident the hub will support innovation and competition within the industry, and we look forward to working with the FCA on this concept further."
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