Financial Services

Funds Legal Update | 8 May 2019

Published on 7th May 2019

Welcome to our Funds Legal Update.


It continues to be a busy period for the FCA. We take a look at its approach to the future of conduct regulation and feedback on its duty of care discussion paper, as well as two new mission documents on enforcement and supervision.

We highlight the new EU Investment Firm Prudential Regime set to come into effect in Q4 2020 or Q1 2021.

Finally, we take a look at the proposed EU Regulation on disclosures relating to sustainable investments and sustainability risks.

Conduct regulation and the future

On 23 April 2019, a speech by Andrew Bailey, the FCA Chief Executive, was published on the subject of the FCA's approach to conduct regulation and the future. The key message by Mr Bailey was as follows:

  • There should be a debate about the future of regulation but this needs to be in a public interest framework;
  • The FCA will undertake further work to examine the role of its principles; and
  • The FCA will consider the most efficient and proportionate options for achieving the substance of a duty of care.

Duty of Care: feedback statement

On 23 April 2019, the FCA published feedback received in response to its July 2018 Discussion Paper, 'A duty of care and potential alternative approaches'. One of the key issues is the application of the Principles for Business. The FCA plans to undertake further work and will publish its next steps in the autumn. You can find the FCA press release here, and the FS19/2 feedback statement here.

FCA mission continues

On 24 April 2019, two FCA Mission documents were published along with new webpages:

The revised FCA supervisory principles set out under chapter 2 came into effect on 24 April 2019. These changes have been made following the March 2018 consultation found here.

New EU Investment Firm Prudential Regime

On 16 April 2019, the European Parliament voted on a new legislative package for the prudential framework for EU investment firms and on the 18 April 2019, endorsed the proposal agreed with the Commission in February 2019. The new framework will comprise the Investment Firm Regulation and the Investment Firm Division and can be expected to come into force towards the end of 2020 or the beginning of 2021. The new legislation aims to bring about more proportionate rules and better supervision for all investment firms. Read the press release on the final vote of the proposal here.

Disclosures regarding sustainability

On 23 April 2019, the proposed EU Regulation on disclosures relating to sustainable investments and sustainability risks was published following its adoption by the European Parliament at first reading on 18 April 2019.

If you would like to discuss any of these developments, please get in touch with one of the experts listed below.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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