FCA

Open-Ended Property Funds – Our Views

ShareSoc has now submitted our response to the consultation by the FRC on "Illiquid Assets and Open-Ended Investment Funds". This follows on from the problems experienced last year where property funds had to close to redemptions but it can affect other types of funds also such as private equity ones. In summary after listening to a number of our members on this topic, we have chosen to say that although we would not be opposed to the banning of such funds entirely, ...

Secret Cautions by the FCA

The Financial Times reported this morning that it had obtained information from the FCA on the number of private warnings it had issued over the last 5 years using a Freedom of Information Act request. The answer given was that there had been 39 of them. ShareSoc has complained about this practice in the past, particularly with regards to AIM companies where the LSE has a similar approach. Indeed we complained about the use of private warnings in our submission to the ...

Clamp Down on CFDs – ShareSoc’s Comments

The Financial Conduct Authority (FCA) is proposing to clamp down on CFDs (contracts for difference) and similar financial products such as binary bets. CFDs are complex financial products that...

Asset Management Market Study

I commented previously on the FCA's Asset Management Market Study, which suggested there was weak competition in this market. Needless to say, most asset managers do not seem to agree. ShareSoc has now submitted a response to the questions raised in that document which you can read here: Asset-Management-Market-Study-Response-2017-02-21. In summary, we agree with the general conclusions and support regulatory intervention where necessary. We also note that although the study does not address the issue directly of financial education, it is our view ...

FCA Reviews Open Ended Funds with Illiquid Assets

The Financial Conduct Authority (FCA) is reviewing open ended funds that invest in such illiquid assets as property and infrastructure. It also potentially affects investments in private equity, unlisted securities and special purpose vehicles. If you recall, only a few months ago a number of property funds had to close to redemptions, i.e. investors could not get their money back, simply because of a minor panic over the impact of the Brexit Referendum vote. Although such funds do keep a cash ...

Obtaining Information on Frauds

One of the things that investors find frustrating is the failure of the regulatory authorities (FCA, SFO, the Police, LSE) to obtain information on the progress or results of investigations into the affairs of companies. For example, if a company and its shareholders are the clear victims of a fraud, often involving false accounting such as in Globo not so long ago and at BT only recently, then obtaining information about the matter is exceedingly difficult. If the company goes into Administration, ...

FCA’s Mission Statement – A Suggestion

The Financial Conduct Authority (FCA) has been consulting on its "Future Mission" and ShareSoc has submitted a detailed response. It can be read here: https://www.sharesoc.org/FCA-Mission-ShareSoc-Response.pdf and there is also a press release which we issued this morning which summarises it: https://www.sharesoc.org/pr86-fca-mission.html It's a pretty devastating critique of the activities of the FCA and the muddled thoughts about its mission statement. It has occurred to me that actually writing a mission statement for the FCA should not be that difficult, so here's my ...

FCA Consultation on Changes to FSCS Scheme Compensation

The Financial Services Compensation Scheme (FSCS) pays out if you have lost money as a result of an authorised financial services firm going bust or otherwise being unable to pay compensation for various failings - for example a bank or stockbroker. The scheme is funded by a levy on services firms. The Financial Conduct Authority (FCA) is currently undertaking a public consultation on changes to the scheme. At present there are limits to the protection FSCS provides which vary by financial product. ...

FCA Proposes to Clamp Down on CFDs

The Financial Conduct Authority (FCA) is proposing to clamp down on CFDs (contracts for difference) and similar financial products such as binary bets. CFDs are complex financial products that have historically been used by sophisticated traders. But they have been growing rapidly in usage by small retail "investors" and the FCA reports that 82% of them lose money based on a review of such accounts. CFDs are a way of acquiring an interest in a listed company without paying stamp duty. It ...

RBS Settlement Announced – But Why Has the FCA Done Nothing?

The Royal Bank of Scotland (RBS) have announced a settlement of the litigation over the rights issue in 2008 with three out of the five investor groups who were pursuing the company. They have reserved £800 million to settle all the claims and are continuing to negotiate with the remaining litigants. But private investors may be reluctant to settle because of the high legal costs that will erode any settlement, the low value of the settlement (the claims were originally estimated ...