Is FSA right to make fund managers ACDs?

REGULATION

Last week Investment Week revealed the FSA is clamping down on Authorised Corporate Directors (ACD) and appears keen for fund managers themselves to fulfil the role they currently outsource.

IFDS, one of the most well-known ACDs, has already decided it is no longer worth operating in this space in the UK, and will close its ACD arm to new business after meetings with the FSA. Other groups have also had meetings with the regulator, which is attempting to prevent another Arch cru scandal by changing the way funds are monitored. Under the current system, ACDs legally own funds, and effectively ‘employ’ fund managers to run the money invested. They also hold quarterly meetings with fund groups to monitor investment decisions. It all sounds very comfortable, but in reality th...