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FCA consults on electronic submission of accounts and accounting requirements for authorised funds

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12 Jun 2014

The Financial Conduct Authority (FCA) has issued Consultation Paper (CP) 14/8 Quarterly consultation No 5 which proposes a number of amendments to their handbook.

The proposed changes include:

  • a proposal that for financial years ending on or after 31 December 2014, FCA regulated entities should be required to submit their accounts electronically to the FCA, rather than in paper form as at present; and
  • proposed amendments to the financial reporting requirements for unit trusts and open-ended investment companies (OEICs).  These proposed amendments include:
    • Updating the glossary to require compliance with the 2014 Investment Management Association Statement of Recommended Practice (IMA SORP) rather than the 2010 SORP. This will apply for accounting periods ending on or after 31 December 2015, with early adoption permissible.
    • Updating the requirements for comparative tables of highest and lowest unit prices and net amount of income distributed or retained. The current rule requires the long annual report and accounts include comparative information for the most recent five calendar years; the proposals change this to the most recent three financial years, and also that this information go in the short reports sent to unit holders. This will apply to reports and accounts published on or after 1 April 2015.
    • Abolishing the existing requirement for unaudited aggregated accounts to be prepared by an umbrella fund. In its place the annual report of an umbrella fund will contain either a table indicating the number and value of units in each sub-fund held by another sub-fund at the balance sheet date, or a statement that there are no such interests. This will also apply to reports and accounts published on or after 1 April 2015. 

The CP also explains the FCA’s proposed next steps on transparency of costs and charges. The IMA SORP consultation included proposals but some responses to that consultation said the proposals did not go far enough. The requirements in the SORP on costs and charges will be introduced, and the FCA will work with stakeholders to consider further enhancements to this reporting. 

Comments on the above proposals are requested by 6 August 2014. 

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