The Financial Conduct Authority (FCA) is listening to views on how it should approach regulatory changes in the UK asset management industry.
Results from the consultation will help asset management regulation become a “more modern and tailored regime,” said the regulator.
The Future Regulatory Framework Review (FRFR) hopes to provide rules and structures for the sector now that EU laws are set to be repealed in the UK.
“We want to hear from a wide range of voices about how we can enhance the existing standards and what we should prioritise to bring the most benefits to consumers, firms and the wider global economy,” said Camille Blackburn, director at the FCA.
The government is not only attempting to ensure the UK remains attractive for international investment firms but also that it embraces the use of new financial technology services.
This includes the use of crypto technologies, artificial intelligence and machine learning.
In some cases, regulation may also be hindering innovation and costing firms excessive amounts.
On the other hand, in its current form the regulation allows some firms to operate at a sub-par standard, the FCA identified.
The authority’s review will continue over the next three months and coincides with its consumer duty project which is due in April.
“Today's release from the FCA is one of those rare birds in the industry of a genuine consultation,” said Kevin Doran, managing director of AJ Bell investments.
Doran believes that building a world for UK asset managers post-Brexit should be the first aspect of the discussions.
The “fragmented process of buying and selling funds in an era where transacting in ETFs is infinitely easier,” should also be a key part of the FCA’s review in Doran’s opinion.
He concluded: “As an industry, we should never forget whose money it is we’re looking after. Hopefully, we can take this opportunity to reduce costs, improve transparency and allow people to feel good about investing.”