Summer2013
publish information about warning notices. The FCA has a discretion as to whether and what to publish. There is, in this regard, a clear policy distinction between: (i) warning notices; and (ii) decision or final notices (in respect of which the FCA is required to publish such information as it considers appropriate). The Committee suggested that the FCA’s policy should reflect this discretion, and in particular should establish when individuals will be named and when the FCA considers that the section 391(6) conditions will be met. The Committee accepted that a policy generally to publish the nature of the conduct which is the subject of a warning notice is appropriate.
The Committee suggested the application of a public interest test, to establish: whether the FCA has reasonable grounds to be satisfied that naming individuals is necessary to avoid or limit further harm to consumers and whether that outweighs the risk of harm to any person named. This would achieve the purpose of the new power to publish information of this type, which is to enable effective communication of the types of behaviour that the FCA considers unacceptable. On the other hand, the Committee accepted that the application of the section 391(6) tests might be the appropriate bar in establishing whether to name firms, but expressed its concerns with the FCA’s apparent interpretation of those tests and suggested ways in which they might better be calibrated. The Committee also commented on the proposed presentation of any publication of information, which ought clearly to identify that a warning notice is preliminary, subject to representation by the relevant person and by no means constitutes a final decision.
Particular thanks to Karen Anderson (Herbert Smith Freehills LLP) for her work on this submission.
2. SUBMISSION TO THE FCA
IN RESPONSE
TO FSA
CONSULTATION PAPER CP13/9 – ‘IMPLEMENTATION OF THE ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE
The Committee’s response to the FSA’s second consultation paper on implementation of the Alternative Investment Fund Managers Directive (the “AIFMD”), continuing its work in relation to the UK’s transposition of the AIFMD, was extensive. The key points are summarised below.
General comments
The Committee welcomed the FSA’s statement of intent to assess delegation arrangements on a qualitative, rather than quantitative, basis and suggested that this be reflected in the FCA’s perimeter guidance. The Committee suggested that in order to avoid gold plating of the AIFMD, the FCA’s definition of funds under management ought to be limited to funds in AIFs that were also not grandfathered under the transitional provisions.
Additional activities of an AIFM
The Committee took the opportunity to strongly disagree with the EU Commission’s proposals not to allow an AIFM to passport Article 6(4) AIFMD activities, nor to allow an AIFM a limited authorisation to passport MiFID services under the AIFMD. The Committee suggested that an AIFM in a member state
that permits it to carry on limited additional activities ought to be able to choose between either: (i) domestic authorisation to carry on the limited MiFID activities under AIFMD only domestically; or (ii) a broader MiFID authorisation to carry on those activities, subject to compliance with MiFID and a limitation to only those activities permitted under the AIFMD.
Marketing
The Committee noted that the UK implementing regulations ought to track the AIFMD definition of marketing. The Committee also noted that the draft guidance on passive marketing was too narrow.
The Committee also addressed various other issues relating to marketing AIF, including:
• suggesting that the FCA work through ESMA
to ensure
that UK firms will not face barriers preventing preliminary communications with potential investors;
• the issue of delegation in the context of a placing agent directly appointed by an AIF, suggesting that – subject to a case by case analysis – an AIFM could not be said to delegate a marketing function it had not been appointed to carry out.
Scope – draft PERG 16
The Committee noted its concerns with the FSA’s interpretation of the
City Solicitor • Issue 82 • 5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16