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January Investment Management Update

January Investment Management Update

  • United Kingdom
  • Financial institutions - Asset managers and funds


Download the full January Investment Management Update

What were December’s highlights?

2016 Global Capital Markets Conference: Perspective from the Buyside

On 1 December 2016, Verena Ross, the Executive Director of  the European Securities and Markets Authority (ESMA), delivered a speech at the ICI Global’s 2016 Global Capital Markets Conference about how ESMA’s work contributes to strengthening Europe’s capital markets. Ms Ross focused on the importance of capital markets in financing the future and how ESMA’s role will contribute towards achieving this objective. Ms Ross discussed the following:

  • the latest developments in ESMA’s key, current work-streams for asset management, including, asset segregation under UCITS (Undertakings for Collective Investment in Transferable Securities) and the AIFMD (Alternative Investment Fund Managers Directive), PRIIPs (Packaged Retail and Insurance-based Investment Products), and financial stability around the non-bank financial services industry;
  • the revised rules for ensuring quality of execution for client orders and the new transparency regime for bonds under MiFID II; and
  • how ESMA’s supervisory convergence work supports the growth of a European capital markets union.

Robo-advice Reports

Several reports on automated advice (also referred to as robo-advice) were published in December:

  • Joint Committee of ESAs: On 16 December 2016, the Joint Committee of European Supervisory Authorities (ESAs) published a report setting out the conclusions of its assessment on automation in financial advice.  The ESAs have decided not to take any regulatory or supervisory action at this point. Instead they will continue to monitor the evolution of the automated advice market given its growth potential, including “hybrid” advice tools.  In addition, they will monitor the possible barriers to the development of automated advice.
  • Financial Services Consumer Panel: On 16 December 2016, the Financial Services Consumer Panel (FSCP) published a research report on assessing online investment and advice services and a related position paper on the consumer experience. Its findings indicate that, despite rules already being in place to protect consumers, there are serious shortcomings in the online investment sector that need to be addressed if consumers are to get good outcomes. The Panel concludes that there is a need for the FCA to clarify the rules across the online investment market, whether or not regulated advice is being provided. It suggests the FCA should consider this when it is developing a framework for ‘streamlined’ advice under the FAMR recommendations.
  • IOSCO: On 21 December 2016, the International Organization of Securities Commissions (IOSCO) published an updated report (FR15/2016) following its July 2014 report on its automated advice tools survey. In light of the rapid evolution of the market, IOSCO conducted a second survey of its members to update its earlier findings on automated advice tools. The report concludes that that the continued development of automated investment advice tools requires ongoing monitoring to help regulators understand its impact on the provision of investment advice to retail clients.

The FCA’s Fourth MiFID II Consultation Paper

On 16 December 2016, the FCA published its fourth consultation paper (CP16/43) on the UK implementation of the MiFID II Directive (2014/65/EU). As a final “clean-up” consultation paper, it is an eclectic mix of technical matters which the FCA were not able to cover in its three previous consultations. 

The FCA expects to publish two policy statements with final rules on the implementation of MiFID II. The first policy statement, which will mainly cover matters consulted on in CP15/43, is expected to be published in March 2017. The second policy statement, which will cover all other issues, is expected to be published in June 2017.

For more information, see our briefing on the FCA’s Fourth MiFID 2 Consultation Paper: Three Points for Asset Managers. In response to the impending MiFID II deadline, Eversheds will be hosting a series of seminars which will provide an insight into the latest developments facing the industry, FCA implementation and an overview of the key issues that we have identified as being of concern to our clients. For more information about this session and to register your place, see our events page. For more information on MiFID II please visit our dedicated webpage.

For more information contact

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