The Investment Management Association (IMA) says it is "important" the FSA understands the position of fund managers in product sales if it wants to fully relate to the industry.
It follows the publication earlier today of FSA guidance aimed specifically at managers of Collective Investment Schemes (CIS).
The IMA says many fund managers often have little or no say in the end sale, adding the regulator’s paper is a positive step towards understanding this.
Julie Patterson, director of authorised funds and tax at the IMA, says: “The IMA fully supports the FSA's work on treating customers fairly.
“But it is important for the guidance to reflect the reality for fund managers who, when sales are made through intermediaries, do not have direct control over the sale and will not in many cases know the identity and circumstances of end customers.
“We have worked closely with the regulator on these issues and believe that the new publication represents a significant step forward in developing a common understanding between the FSA and the industry on what is meant by ‘target market' and ‘management information' in the context of authorised funds.”
Today’s FSA guidance provide practical examples as to how CIS managers can meet the requirements to collect Management Information in two specific areas; identifying their target market and reviewing how their products are being distributed.
FSA asset management sector leader, Dan Waters, says: “The CIS industry in the UK is subject to a unique set of regulatory requirements under the COLL sourcebook and also provides products the great majority of which are sold through distribution channels not controlled by the CIS Manager.
“When we published the TCF Guidance last July we said there were likely to be some difficult or complex areas where additional clarification of what we expect of firms would be helpful.
“And it is in that spirit that we have published these illustrations which we hope firms will find useful.”
The FSA has drafted these good practice illustrations in collaboration with the industry using feedback from a 'working group' that met twice during December 2007.
Under the TCF initiative, firms are expected to have appropriate Management Information measures in place by March 2008.
They will be expected to demonstrate to themselves and the FSA they are treating their customers fairly by December this year.
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