Sixty second summary
Final CMA Order – when an exemption is no longer an exemption
17 Jun 2019 - Estimated reading time: 1 minute
- On 10 June the final order was issued by the CMA in relation to their investigation into the investment consultancy and fiduciary management industry
- The wording in the final order has been amended such that the LGPS is now included in the list of schemes the order applies to, both in the definition of Trustees and a removal of the previous exemption (unlike other public service schemes)
- The new requirements include the need to set objectives for your investment consultant but may have wider reaching implications depending on interpretation of what advice is now regulated and what is deemed a fiduciary relationship
- Schemes have 6 months to comply with the new requirements
A recent Order1 published by the Competition and Markets Authority has unexpectedly established new requirements affecting LGPS Funds. From December 2019, Funds will need to establish objectives for their investment consultants that are linked to their longer-term investment objectives. We have set out some initial considerations in this Summary to assist Committees.
At the end of 2018, the Competition and Markets Authority (“CMA”) published its report following a review of the investment consulting and fiduciary management markets. Earlier this year, the CMA set out a draft Order, setting out requirements for the appointment and governance of fiduciary managers, and for pension scheme trustees to set objectives for their investment consultants. Although the draft Order did not impact directly on the LGPS, the final Order, which was released on 10 June, does now extend to the LGPS.