In this consultation, we propose to revoke rules and guidance in the Conduct of Business sourcebook (COBS) that are currently scheduled to come into force at the end of this year.
Why are we consulting on this?
In 2011 the Financial Services Authority (the FSA), our predecessor organisation, published rules and guidance (COBS 14.4) concerning investments in authorised funds and requiring certain nominee companies, defined as ‘intermediate unitholders’, to notify the underlying beneficial owners of units in those funds when the authorised fund manager or the depositary issues certain fund information, or notifications about general meetings of unitholders. The rules were scheduled to come into effect on 31 December 2012. This date was deferred until 31 December 2013 in order to resolve operational aspects of the rules.
In late 2013, we decided to put the implementation of the majority of COBS 14.4 on hold until 31 December 2015.
We are planning two separate pieces of work that are likely to affect the rationale for most of COBS 14.4: a discussion paper on improving firms’ communications with customers and a market study on asset management. Given that we are considering the effectiveness of disclosures required under the rules due to come into force and that we will be conducting a market study in this area, we propose to revoke the rules and guidance in COBS 14.4.1R to 14.4.9R (inclusive).
CP15/20: Investing in authorised funds through nominees [PDF]
Who is this Consultation Paper aimed at?
This consultation will be of interest to fund managers and to firms, such as platform service providers and wealth managers, that operate or arrange nominee accounts for their customers. The proposals will also be of interest to consumers who invest in authorised funds and consumer organisations.
Next steps
We want to know what you think of our proposals and welcome comments using our online response form by 17 July 2015.
We intend to reconsider the substance of these rules and guidance in 2016, in the light of feedback from the discussion paper, our subsequent consultation on removing some specific disclosures, and any issues emerging from the market study.