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April Investment Management Update

April Investment Management Update

  • United Kingdom
  • Financial institutions - Asset managers and funds


Download the full version of the April Investment Management Update

What were March’s highlights?

Independent Dormant Assets Commission Recommendations

On 3 March 2017, the Independent Dormant Assets Commission published a report on tackling dormant assets.

The Commission was set up in December 2015 to look at whether the current dormant asset scheme, which includes funds in banks and building societies, could be extended to the full spectrum of potentially dormant financial and non-financial assets. The report contains the Commission's principal findings and recommendations which include the following:

  • The current scheme should be expanded to include a much wider range of UK-domiciled financial products, including additional bank accounts, unclaimed proceeds from life insurance and pensions products, and non-cash assets (such as dormant holdings in investment funds, shares and bonds). Certain assets recommended for inclusion are held through trust structures, so legislative change may be required to facilitate trustees transferring assets to the scheme.
  • The existing definition of dormancy in the Dormant Bank and Building Society Accounts Act 2008, used in the current scheme for bank and building society accounts, cannot be universally applied. Dormancy should be defined by some or all of: customer inactivity over time, lack of proactive action at a trigger date, and loss of contact with customers over an extended time frame despite a reasonable level of attempted reunification activity by a firm.
  • The expanded scheme should retain the core principles of the current scheme (for example, customers should continue to be able to reclaim lost assets at any time).
  • Participation by firms in an expanded scheme should continue to be voluntary.

The government will consider the report and determine the next steps. The Commission expects the government to produce a formal response to the report, and believes it is likely that a legislative framework would not be introduced before 2018.

For more information, please see our recent briefing on The Dormant Assets Report and CASS.

ESMA final draft technical standards under Benchmarks Regulation

On 30 March 2017, ESMA published a final report (ESMA70-145-48) containing the final draft regulatory technical standards (RTS) and implementing technical standards (ITS) required under the Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds ((EU) 2016/1011) (Benchmarks Regulation).

The report sets out policy decisions and the final text of 11 sets of RTS and ITS required under the Benchmarks Regulation. ESMA has submitted the draft technical standards to the European Commission, which has three months to decide whether to endorse them.

FCA publishes first policy statement and fifth consultation paper on MiFID II

On 31 March 2017, the FCA published its first policy statement (PS17/5) on implementation of the MiFID II Directive (2014/65/EU).

PS17/5 sets out the FCA's near final rules in the areas that it consulted on in CP15/43 and CP16/19. It also covers a small number of issues it consulted on in CP16/29 and CP16/43 and gives an update on its proposals for recording telephone conversations, which it addressed in CP16/29. Issues consulted on in the above consultations that are not addressed in PS17/5 will be included in the FCA's second policy statement on MiFID II implementation, which it plans to publish at the end of June 2017. The FCA plans to finalise all of its rules at that time.

In addition, the FCA published its fifth consultation paper (CP17/8) on the implementation of the MiFID II Directive.  CP17/8 covers three areas:

  • Occupational pension scheme (OPS) firms.
  • Decision Procedure and Penalties manual (DEPP) and Enforcement guide (EG).
  • Consequential changes to the Handbook and reporting financial instrument reference data and positions in commodity derivatives.

Comments on the proposals relating to OPS firms should be sent to the FCA by 23 June 2017.  The deadline for comments on its other proposals is 12 May 2017.

For more information, please see our recent briefing on MiFID II updates.

Final legislative reform order on amendments to Limited Partnerships Act 1907 in respect of private investment funds

On 31 March 2017, HM Treasury published the final legislative reform order on proposed amendments to the Limited Partnerships Act 1907 in respect of private investment funds such as venture capital and private equity funds.

The final order was made on 29 March 2017 and is in substantially the same form as the revised draft Legislative Reform (Private Fund Limited Partnerships) Order 2017, published in January 2017.

The order comes into force on 6 April 2017.  For more information, read our briefing on the Changes to limited partnership law – UK Private Fund Limited Partnerships.

For more information contact

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