The board of the Financial Conduct Authority (FCA) has accepted proposals to ditch the term 'value for money' from the final rules relating to the Asset Management Market Study (AMMS).
The minutes from the board meeting on 21 and 22 March show the proposed package of remedies resulting from the AMMS were discussed, namely plans to tackle weak price competition. These remedies had generally been welcomed in the consultation, but concerns were expressed about some of the terminology, particularly the use of the term ‘value for money'.
As a result, the board accepted the same outcomes could be achieved without the use of the term ‘value for money', which will be removed from the final rules to make it clearer that consideration should be given to whether the charges are justified in the context of the service and value provided.
In its final policies resulting from the AMMS, published on 5 April, the FCA extended the implementation period for fund managers to explain their products' value from 12 to 18 months, with the new rules taking effect on 30 September 2019.
The board also agreed to:
• make final rules requiring fund managers to assess annually whether the charges taken from a fund are justified in the context of the overall value provided by the fund - an assessment of value
• make final rules requiring independent directors make up at least 25% of an AFM's board with a minimum of two independent directors
• make rules to prevent fund managers retaining risk-free box profits
• publish revised guidance to make it easier for fund managers to convert investors to cheaper share classes where this is in their interests
Outside of the AMMS, the board called for further clarity on how the FCA's priorities were being managed in relation to Brexit and suggested the FCA could work more closely with the Payment Systems Regulator (PSR) "where joint work was to be undertaken". Board members were invited to submit any further comments by the end of 26 March.
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