The FCA has created a 'hub' to aid the launch of new asset management firms after acknowledging prospective entrants to the industry may need more help from the regulator.
The watchdog will launch its asset management authorisation hub next month, aimed at assisting fledgling fund providers as they seek to gain the necessary regulatory approvals.
Megan Butler, the watchdog's executive director of supervision for investment, wholesale and specialist, said the FCA would seek to give firms better guidance on regulations and processes, as well as making information easier to access via a dedicated online portal for investment managers.
The regulator will also seek to foster "more positive, personalised engagement" between itself and new market entrants.
The first phase of the hub will go live in October, with the regulator offering firms pre-application meetings and dedicated case officers.
The announcement follows the publication of the FCA's asset management market study final report, which put forward a variety of measures aimed at boosting "weak" competition in fund management. The launch of the hub could further boost competitiveness in the industry, said Ms Butler.
"We know it is not enough to ask investment managers, on your own, to make improvements in the name of competition," she said, speaking at the FT's Investment Management Europe 2017 conference. "We need to play our own part. A traditional critique of regulation is that a lot of red tape tends to protect incumbents from competition by putting off new entrants to the market.
"On this point, we know prospective entrants to the asset management industry would welcome more support from the FCA."
The FCA plans to expand its activities on this front in future with quarterly surgeries and online booking for pre-application meetings, as well as the publication of more detail on the regulator's entry criteria.
Ms Butler stressed this would not mean a watering down of standards.
"The authorisation hub is not designed to lower entry standards to the market," she said. "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."
The viability of new fund firms has long been a source of concern for the industry. Last year Investment Adviser reported that the number of boutique asset managers had nearly halved in just two years, in part because of legal and regulatory costs.
Delegation
Ms Butler also turned her attention to recent concerns around the prospect of UK-based fund managers no longer being able to run money for Dublin or Luxembourg-domiciled portfolios post-Brexit.
"We are particularly conscious of the need to find sensible outcomes on delegation [of portfolio responsibilities overseas]," she said.
"We see no real justification for unnecessarily complicating rules around delegation and outsourcing. Both are integral elements of efficient market business models. Both work well now. And there is no reason to suggest both won’t work well in the future.
"On top of this, there is an important question as to whether a change to delegation provision could, potentially, have an adverse impact on European and global markets. We think regulators are well placed to solve these challenges. We will work extremely hard for pragmatic, productive and positive cooperation between UK and European regulators – not forgetting the global context."
Around £900bn is managed in the UK on behalf of fund ranges in Dublin and Luxembourg, according to the Investment Association. The trade body recently said that retaining this 'delegation arrangement' would be "key to maintaining the UK's position in a post-Brexit world".
