FCA calls on firms to act following review of costs and charges disclosure in the investment sector

On 28 February 2019, the FCA published its key findings of supervisory work to assess the effectiveness of disclosure by asset managers and intermediaries to their retail customers. The FCA’s work was prompted by new disclosure requirements on costs and charges introduced by MiFID II and PRIIPs, which came into effect in January 2018. Review of disclosure of costs by asset managers The FCA’s review identified that most asset managers calculate transaction costs in accordance with the relevant rules. However, there were problems with the way some asset managers calculate transaction costs and how prominently and clearly they disclose them. Other findings in the review as regards transaction costs: incorrectly applying the PRIIPs requirements: some firms are incorrectly using the arrival price methodology when calculating transaction costs for primary issues; using the anti-dilution levy incorrectly: this tool should only be used to reduce dilution. However, the FCA…

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