In 2024 wealth and asset managers can expect regulators to continue to focus on the themes identified in KPMG’s 2023 Evolving Asset Management Regulation report.
In the context of sustainable finance, UK fund managers will be focused immediately on implementing the FCA’s Sustainability Disclosure Requirements (SDR — see next steps for firms here). Asset managers can also expect the FCA to review their initial TCFD-aligned disclosures and to publish observations. For EU firms, the direction of the Commission’s direction on the review of the SFDR is also likely to become clearer (see a recap of its consultation here).
On investor protection, UK wealth and asset managers will continue to embed the Consumer Duty (see below), and fund managers specifically will need to act on the findings of the FCA’s latest assessment of value review if they have not already done so.
UK firms can expect the FCA to consult on a disclosure regime to replace PRIIPs. Meanwhile, EU firms have been attempting to influence the European Commission’s proposed Retail Investment Strategy. Negotiations on this will continue throughout 2024. For a recap of the Commission’s original proposal and a comparison with UK requirements, see our summary here.
International regulatory efforts to reduce potential systemic risk in funds will move to the embedding phase. Meanwhile, the FCA will continue to focus on front office controls and will be expecting improvements to fund liquidity management following its 2023 supervisory review (see next steps for fund managers here). As work on mainstream assets concludes, 2024 will see increased regulatory attention on private assets — our 2023 article signposted actions for firms.
More broadly, firms on both sides of the Channel will be continuing to enhance their financial resilience, prepare for new operational resilience requirements, and seek to influence and comply with new digital finance regulations (see below). In addition to the Consumer Duty, UK wealth managers will be expected to focus on efforts to combat financial crime (see more here).
