UK regulator increases support for new starters

As part of its crusade to increase competition in the UK's asset management sector, the Financial Conduct Authority will establish a hub to assist new entrants to the industry.

Speaking at an investment conference in Europe, FCA executive director of supervision - investment, wholesale and specialists Megan Butler said a lot of red tape protects incumbents from competition by deterring new entrants and so start-ups would benefit from greater regulatory support.

The hub will help start-ups move between the pre-authorisation and authorisation stages, easing them into regular supervision.

Butler said the FCA will do this via a user friendly system based on four principal objectives of clarifying expectations; making information more accessible through a new, dedicated website portal; fostering positive, personalist engagement between the FCA and new businesses; and providing end-to-end support throughout the start-up cycle.

Speaking of the number of new firms approved by the FCA each year, Butler said many find it difficult to navigate regulation, with the FCA contact centre receiving up to 1200 calls a month for support.

"I should say that this is not necessarily a big surprise because it is extremely difficult to describe complexity simply. But we do see it is an imperative that the best investment managers aren't put off of operating in the UK by avoidable barriers to entry," she said.

Phase one of the hub, to be launched in October, will involve offering new firms pre-application meetings, dedicated case officers and access to the new website portal. In the New Year the FCA plans to roll out expanded services, including more detail on entry criteria.

Butler affirmed that the establishment of the hub is no way intended to lower entry standards to the market.

"We have no intention of presiding over a decline in quality. So entrants will need to meet the same rigorous standards as current firms before they receive authorisation...public value is integral to our objectives," she said.

The FCA already operates a similar initiative for new banks with the UK's Prudential Regulation Authority, and Butler hinted at the potential for such services to be expanded into other segments of the financial services market.

Earlier this month the FCA had its concerns around anti-competitive practices among investment consultants referred to the Competitions and Markets Authority for further investigation.

Read more: FCAFinancial Conduct Authorityasset managementMegan ButlerCompetitions and Markets AuthorityPrudential Regulation AuthorityUK PRA
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