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PS 18/8 introduces prescribed responsibility for fund managers, alongside the wider extension of SM&CR


  • November 2015 – The FCA publish their terms of reference for asset management market study, to better understand how asset managers compete to deliver value to retail and institutional investors.
  • Interim report published November 2016, outlining proposals to drive competitive pressure, increase investor protection, with focus on those investors less able to find better value together with proposals to improve the effectiveness of intermediaries.
  • June 2017 – FCA publish their final report.
  • April 2018 – Remedies follow by way of Consultation policy, these policy changes are finalised and outlined below. 

Impact & Timeline

04.02.19 – Policy Statement, PS19/4 – Response and Rules issued in respect of CP18/9 -improving the quality, comparability and robustness of the information available to investors. 

  • The Proposals contained in CP18/9 have now been adopted as new rules with some minor text amendments published on 4th February 2019.

The new rules provide for:-

  • New non-Handbook guidance to remind authorised fund managers (AFMs) how they should describe fund objectives and investment policies to make them more useful to investors
  • Requires AFMs to explain why their funds use particular benchmarks or, if they do not use a benchmark, how investors should assess the performance of a fund
  • Requires AFMs that use benchmarks to reference them consistently across the fund’s documents
  • Requires AFMs that present a fund’s past performance to do so against each benchmark used as a constraint on portfolio construction or as a performance target
  • Amends rules to require that where a performance fee is specified in the prospectus, it must be calculated on the basis of the scheme’s performance after the deduction of all other fees


New rules apply on 7th May 2019 for New Funds and 7th August 2019 for existing Funds.

PS18/8 – Seeks to better protect investors from the results of weak competition.

  • These rules are now final.
  • Sets out policy and guidance to improve fund governance for authorised funds and outcomes for investors by moving them to better share classes and ensuring fairer allocation of dealing profits.
  • The key changes implemented by the FCA are summarised as follows:-
    • requires fund managers to assess annually whether the charges taken from a fund are justified in the context of the overall value provided by the fund (an ‘assessment of value’), effective 30.09.19;
    • requires that independent directors make up at least 25% of an Authorised Fund Manager’s board (with a minimum of 2 independent directors), effective 30.09.18;
    • introduces a new prescribed responsibility, PR for fund managers which will take effect alongside the wider extension of the Senior Managers and Certification Regime (SM&CR). Typically, this PR will sit with the chair of the board of an AFM who must take reasonable steps to ensure that the firm complies with its obligation to carry out the assessment of value, the duty to recruit independent directors, and the duty to act in the best interests of fund investors), effective 09.12.19.
    • prevents fund managers retaining risk-free box profits, effective 01.04.19
    • revised guidance to allow for fund managers to convert investors to cheaper share classes where this is in their interests, with immediate effect

CP18/9 – Now finalied rules per Policy Statement 19/4

  • The FCA has sought to address their concerns that fund objectives are not as clear for investors as they should be.
  • The fund benchmarks may not always be presented as clearly or appropriately as they should be.
  • Provides guidance on how fund objectives should be presented, the use of benchmarks must be clearly explained and referenced consistently in consumer documents.
  • Consultation now closed, final policy changes to be published.


  • The Timelines for each component of change are noted in each section above.