Our latest Funds and asset management regulatory news supplements our General regulatory news with items specific to the funds and asset management industry. Read both to keep abreast of recent regulatory developments.

Contents

• COVID-19: phased ending of FCA temporary relief extending deadlines for publishing fund reports and accounts
• Closet indexing indicators and investor outcomes: ESMA working paper

COVID-19: phased ending of FCA temporary relief extending deadlines for publishing fund reports and accounts

On 9 September 2020, the UK Financial Conduct Authority (FCA) updated its COVID-19-related webpage on extending deadlines for publishing fund reports and accounts, to explain how it will phase out the temporary relief now that businesses have had time to adjust to the new environment.

The FCA intends to end the temporary relief in stages over the coming months as follows:

• for funds with an annual or half-yearly accounting date on or before 31 August 2020: the temporary relief will remain in place. For example, this means for an authorised fund manager (AFM) of a UK UCITS scheme, relevant annual reports would need to be published at the latest by 28 February 2021 instead of 31 December 2020. Relevant half-yearly reports would need to be published at the latest by 30 November 2020 instead of 31 October 2020;
• for funds with an annual or half-yearly accounting date on or before 31 September 2020 (but after 31 August 2020): one month's relief will be permitted where necessary. For example, this means for an AFM of a UK UCITS scheme, relevant annual reports would need to be published at the latest by 28 February 2021 instead of 31 January 2021. Relevant half-yearly reports would need to be published at the latest by 30 December 2020 instead of 30 November 2020; and
• for funds with an annual or half-yearly accounting date after 30 September 2020: the temporary relief will expire and no extra time will be provided. The FCA expects relevant reports to be published in line with the usual timelines detailed on the webpage.

The FCA will continue to monitor the situation over the coming months.

Closet indexing indicators and investor outcomes: ESMA working paper

The European Securities and Markets Authority (ESMA) has published a working paper on closet indexing indicators and investor outcomes. The study finds that investors can expect lower net returns from closet indexers than from a genuinely actively managed fund portfolio. A summary of this study was also included in the Trends, Risks and Vulnerabilities report.

This study does not aim to identify particular closet indexers, but analyses how closet indexing relates to the costs and performance of EU-domiciled equity funds. In so doing, it aims to contribute to the understanding of closet indexing in the EU.

[View source.]