Short-form report and accounts to become a thing of the past..?


In an attempt to reduce the regulatory reporting burden on financial firms, the FCA has tabled a proposal to remove the requirement for firms to produce short-form Report and Accounts. For reasons we will reveal later, we believe this to be a good thing.

Currently a bi-annual responsibility for Fund Groups to provide investors with the salient points relating to a fund’s performance and originally designed as an alternative to the long form equivalent, feedback received by the FCA suggests that the short-form reports are still too long in length, much like this sentence. Lengthy production timescales are not only a resource challenge for Fund Groups but the feedback also shows that in some cases, by the time the documents are ready for mass consumption, much of the information is already out of date. Frustration all round.

The FCA’s consultation paper CP15/32 has identified a number of mandated disclosures which “have not been effective in terms of informing customers about a product or service”. The paper is available to view here and the FCA is welcoming comments until 18th December, with new rules to be confirmed in a Policy Statement early in 2016. If you have strong feelings in either direction on this topic then do take the opportunity to share your views while you can.

So what does this mean for Fund Groups and the industry as a whole? The FCA will always demand that investors are given the information they require about how, when and with whom they invest. In the past, this information has sometimes come at the expense of Fund Groups; time, effort, money, regulations, regulations and more until it’s hard to know if you’ve been compliant or not. This proposal, coupled with discussion paper DP15/5, both of which encourage a move to smarter and more innovative methods of communication, demonstrates a shift from the somewhat draconian measures once imposed by the FCA to a slightly more liberal approach. This recognition of modern technologies and the new ways in which investors consume information could bring about a significant change in the way that organisations can meet their regulatory obligations and we believe this to be genuinely heartening. There is likely to be much consultation and potentially some voices of opposition before real change starts to trickle through but in basic terms, this feels like progress.

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