FCA issues warning to alternative investment bosses

The FCA has written an open letter to CEOs of alternative investments companies to set out a strategy for dealing with alternative assets.  

According to IPE, the FCA’s head of asset management and pensions policy Nike Trost said its portfolio priorities are consistent with the FCA’s 2022 business plan commitments, with integrity of the markets and market abuse, ESG and consumer needs all priority areas.

He added, “Where they apply, firms should ensure their actions and culture support and promote these initiatives. Our business plan also focuses on promoting competition and positive change, with a priority to strengthen the UK’s position in global wholesale markets and attract new capital.

“Alternative firms have a vital role to play in achieving this. For the UK’s status to be retained its markets must remain clean, liquid, and orderly and there must also be a collective understanding that all participants act with integrity. Those who do not will be held to account.”

The FCA has finalised stronger rules to help tackle misleading adverts that encourage investing in high-risk products.

Under the firmed-up rules, companies approving and issuing marketing must have appropriate expertise, with companies who are marketing some kinds of high-risk investments needing to conduct better checks to ensure consumers and their investments are well matched.

Businesses will also need to use clearer and more prominent risk warnings and certain incentives to invest – such a ‘refer a friend bonuses’ are now banned.

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