CP12/32: Implementation of the Alternative ... - BVCA admin

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
2.19 The expectation that the FCA will make early and pro-active supervisory interventions
aligns with the principle in AIFMD that national competent authorities apprehend systemic
risks and intervene to manage or mitigate those risks. In addition to this, examples of how
key elements of AIFMD should align with the proposed approach of the FCA include:
November 2012
• an emphasis on the primary role played by firms’ management in understanding the
risks their firm faces and ensuring effective governance and risk management, with
appropriate controls and procedures;
• an emphasis on the importance of both sufficient levels of regulatory reporting and
disclosure to markets and investors;
• strengthened cooperation and coordination between national and European regulators,
through harmonised regulatory approaches and supervisory practices across Europe; and
• new understandings between European and non-EEA regulators for enhanced
cross-border supervisory cooperation.
Two new Handbooks
2.20 We are currently working on the new PRA and FCA rulebooks, which will become effective
when these two new regulators acquire their legal powers (we refer to this as ‘legal
cutover’). The overall approach to amending the FSA Handbook to be ready for legal
cutover is based on only making the changes that are required to implement the Bill and to
support the creation of the new regulatory structure. While the draft AIFMD rules will be
consulted on by us as the FSA, they are likely to be made by the FCA after legal cutover.
2.21 This approach aims to control the degree of necessary change for the regulators to operate
and for firms at legal cutover. A key element of this approach is that when the PRA and
FCA acquire their new powers, provisions in the existing FSA Handbook will be adopted,
or ‘designated’ by the PRA, by the FCA or by both regulators, to form new PRA and FCA
rulebooks. As a result, the majority of the provisions in the existing FSA Handbook will be
carried forward to the new regulators in their respective rulebooks. Readers will be able to
see which provisions have been adopted, or ‘designated’, by each regulator to form new
PRA and FCA rulebooks.
2.22 From legal cutover, the PRA and FCA will amend those provisions in line with their
objectives and functions, consulting and coordinating with each other as appropriate. More
substantive changes to the existing FSA Handbook are required to align the new rulebooks
with the future objectives, functions and regulatory procedures of the PRA and FCA.
Financial Services Authority 17