FCA launches second consultation on transparency of fund objectives and benchmarks; Unveils fund value rules

Will assess use of benchmarks

The Financial Conduct Authority (FCA) has launched a second consultation on the back of its Asset Management Market Study into the transparency of fund objectives, the use of benchmarks and performance fees.

The paper proposes measures to improve the quality, comparability and robustness of information available to investors and seeks to address its concerns that fund objectives "are not as clear or specific as they could and should be". Following the consultation, the regulator plans to publish guidance on how fund managers should make their funds' objectives "more useful" to investors, such as by avoiding jargon, and will stipulate when a fund needs to disclose that its strategy is constrained relative to a benchmark. They should also explain any non-financial objectives they have, for ...