International Funds Focus | Second quarter 2024
Published on 9th Jul 2024
Welcome to the summer edition of our quarterly round-up of UK and international developments for asset managers
Will Labour have the bandwidth to deliver the raft of complex work it has promised?
For the UK, the second quarter of 2024 brought a much-anticipated general election – but one that was unexpectedly early. We give an early take on what a Labour government might bring for the financial sector, including what asset managers can expect.
In the short term, the UK general election has meant that regulators have downed tools on all policy statements. In the medium and long term, it will likely mean much more regulatory activity. Also focusing further ahead and on Europe, we provide our first in-depth analysis of AIFMD II's impact. This is to assist those who use EU host alternative investment fund managers (AIFMs) or hold an EU AIFM authorisation.
Osborne Clarke's investment management, fund formation and regulatory experts are well placed to advise you further on any of the topics covered in this edition. For further information please contact the experts mentioned in the articles or one of our funds partners: Helen Parsonage, Alison Riddle, Tim Simmonds and Simon Thomas.
Labour's asset management policies
Following the election results on 4 July, Labour secured 412 seats in the UK Parliament and have now formed the largest majority government in 25 years. What will Labour's victory mean for financial services, including asset management? Will Labour have the bandwidth to deliver the raft of complex work it has promised?
Regulatory initiatives called to a halt for UK election
In the sensitive political climate up to the UK election, the UK Financial Conduct Authority abstained from any public policy notifications. For example, by not publishing its review of politically exposed persons (despite a deadline set in the Financial Services and Markets Act 2023). However, on the date the snap general election was announced, the UK financial regulator did set out its plans for its future agenda.
Get ready to take the plunge
We analyse one of the key changes due to AIFMD II and delve into liquidity management tools, as the proposals have further implications than might first meet the eye. European AIFMs need to get ready to deep dive into a pool of policies, procedures and disclosures, all the way down to the level of operational readiness for each of their (sub)funds.
UK managers using the services of host AIFMs from Luxembourg or Ireland, for example, will also need to consider the implications of the new liquidity management requirements.
The 'Consumer Duty'
The phasing-in of last year's "Consumer Duty" is coming to an end, as it starts to apply to closed products and services from the 31 July. The FCA has sent a raft of letters to CEO's, including one for asset managers, explaining what firms should do before the deadline.
More colour is provided on how to be green
ESG isn't standing still. This quarter brought us updates from the FCA on its sustainability disclosure and labelling regime website, providing useful information about the new regime, while the European Securities and Markets Authority published its long-anticipated report on fund names. The regime was also expanded to include portfolio managers, with some notable exemptions.
