FCA Dear CEO letter to Asset Management firms

“Setting and testing higher standards This year we’ll continue to work for consumers to make sure that governance bodies of our portfolio firms are looking after investors’ interests particularly in periods of market disruption, stressed market conditions and through consolidations occurring in industry.”

This regulatory gap analysis focuses on the recent FCA Dear CEO Letter to Asset Management & Alternatives firms. The FCA acknowledges that not all issues raised will be relevant for all firms, however they "expect" the CEO and Board to discuss its content, consider how it applies, and where necessary, take action. 

Key themes of the letter include a focus on:

• Assessment of Value & Consumer Duty

• Governance & Change Management

• ESG

• Operational Resilience

• Valuation practices for Private Assets

The FCA notes that asset managers faced heightened uncertainty and market shocks in 2023. This has led to challenges in raising and maintaining assets. In response to this the FCA is seeing consolidation and cost cutting. They are ultimately concerned that compliance with ever changing regulatory standards does not suffer in these challenging times.

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