Assessing the FCA fund governance regime

Funds_under_reviewUK funds are beginning a new era of tougher governance. Independent non-executive directors are arriving en masse on fund boards and their job will be to scrutinise whether investors are getting good value.

“Each fund company is going to define value in their own way,” says Devin McCune, vice president, regulatory and compliance, at Broadridge.

McCune was speaking in a Funds Europe webinar, held in association with Broadridge, and which also features Peter Capper, the Investment Association’s fund and investment risk specialist.

Funds must ask themselves what constitutes value for a fund investor, McCune says.

Performance will inevitably be a factor - but performance against a fund benchmark may not be enough. Funds may find themselves gravitating towards wider peer-group comparisons too.

The process is set to become granular. Even the period of performance that will be assessed is open to question.

During the webinar, Capper reminds funds of the urgency of the issue.

“It’s important to remember that once funds reach their accounting or reference dates, they will only have four months to gather data, hold board meetings and produce their assessment of value reports and sign them off. Four months will go very quickly in this process.”

A fuller report on the ‘Assessment of Value’ webinar is in the October issue of Funds Europe and you can find the webinar in our Webinars Channel.

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