And to round off a heavy FRO 2010 the FSA recommend the Asset Management Sector Digest 2010.

There are nine key messages in the publication, four of which are deemed ‘priority risks’ being:

  • Controls over client money and assets;
  • The valuation of assets in funds;
  • Platforms; and (of course)
  • The Alternative Investment Fund Managers Directive

The Regulatory Roundup of 8 February covered the subject of client money & assets with a warning that the FSA are likely to conduct further visits. Since that time two or three of our client firms have been approached by the FSA who have requested, and with fairly short notice, various documentation prior to a thematic visit. If you are a Complyport client firm where it is felt that such a visit may occur then please do get in touch with your normal Complyport contact who will be pleased to discuss with you the type of information that you are likely to be asked for.

The FSA comments on the valuation of assets in funds applies equally to regulated and unregulated funds, and in respect of the latter recognises the responsibility may lie with a fund administrator. The example on page 9 of pricing discrepancies in respect of certain corporate bonds makes interesting reading. A brave asset manager of an offshore fund may feel insulated from this if the administrator has been appointed by the fund rather than the firm … but then again may not.

The comments on the AIFMD will not come as a surprise. There is a summary on page 11 of the estimated costs of the original AIFMD across Europe on Hedge funds; Private equity; Venture capital; Real estate; and Investment Trusts. Below is also a link to the full impact document.