U.K. regulator seeks input on new illiquid option for DC plans
Bloomberg
The U.K. Financial Conduct Authority is seeking industry input on its proposal to launch new fund structures that would allow defined contribution plans and retail investors to invest in illiquid assets.
The financial services watchdog said Friday it is proposing that the new open-end funds, known as long-term asset funds, would invest in venture capital, private equity, private debt, real estate and infrastructure to help businesses with access to long-term capital.
Because liquidity risk stops investors from making significant allocations to illiquids and investors want an option to redeem investments at net asset value, the FCA proposed that LTAF funds have longer redemption periods, high levels of disclosure, and specific liquidity management and governance features to help investors manage the risk, it said.
Asked at a press conference Thursday about the rising value of cryptocurrencies, Bailey said: They have no intrinsic value. That doesn t mean to say people don t put value on them, because they can have extrinsic value. But they have no intrinsic value. I m going to say this very bluntly again, he added. Buy them only if you re prepared to lose all your money.
Bailey s comments echoed a similar warning from the U.K. s Financial Conduct Authority. Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors money, the financial services watchdog said in January.
I. What’s the issue?
The London Interbank Offered Rate (“LIBOR”) is the most widely used interest rate benchmark in the world, referenced in some $373 trillion notional value of financial transactions of all types. But in light of the various price-fixing scandals surrounding LIBOR and the limited activity in the London interbank market, the U.K. Financial Conduct Authority (“FCA”) announced in 2017 that it will no longer sustain the publication of LIBOR as a reference rate by the end of 2021. LIBOR’s administrator now plans to retire 3-, 6-, and 12-month U.S. dollar LIBOR in late June 2023, while leaving in place the end-of-2021 retirement date for 1-week and 2-month U.S. dollar LIBOR and for all LIBOR settings in British pounds, euros, Swiss francs, and yen. U.S. regulators have encouraged banks to transition away from LIBOR “as soon as practicable.”
U.K. managers told to keep eye on employees’ out-of-office lives
Print
Money managers operating in the U.K. are not only having to enhance the scrutiny and assessment of their employees based on behavior inside and outside the office as the result of a new conduct regulation, they re also having to set their own criteria against which to judge staff.
The enhanced regulation is supposed to bring more accountability to those running client money by weeding out bad behavior and ensuring that the U.K. Financial Conduct Authority is kept up to date with the professional and personal conduct of money management executives. But the non-specific nature of what constitutes bad behavior which is open to interpretation by individual money management firms rather than being defined by the regulator could lead to a witch hunt, with employees potentially fired for crazy reasons, one source at a law firm warned, asking not to be identified.
They are determining whether Binance complied with security rules before launching the product.
Crypto exchange Binance is reportedly under the lens of European regulators for its stock token offering that was launched last week.
The Financial Times reported the news on Thursday, saying that European regulators, including the U.K. s Financial Conduct Authority (FCA), are examining whether Binance complied with security rules before launching trading in stock tokens.
The FCA told the FT that it is working with Binance to understand the offering, the regulations that may apply to it, and how it is marketed. The regulator further said that firms and their senior management teams are responsible for determining whether their products and services fall within the remit of the FCA.