Chapter 12

Regulatory Environment

12.1 INTRODUCTION

12.1.1 US, UK and EU regulatory environment

This chapter provides an introduction to the overlapping regulatory regimes that are relevant to investment managers, placement agents and other advisers to asset managers. I include an overview of the following:

  • UK regulatory environment (FCA, PRA and FSMA)
  • US regulatory environment (SEC, Dodd–Frank Act and FATCA)
  • EU regulatory environment (AIFMD).

12.1.2 Other regulatory environments

The contents of this chapter are restricted to summaries of the US, UK and EU regulatory environments. Summaries of further regulatory environments in relation to other popular fund locations are contained within Chapters 7 and 8.

12.2 UK REGULATORY ENVIRONMENT

Prior to 1 April 2013, the Financial Services Authority (FSA) was responsible for the regulation of the financial services industry in the UK. However, the FSA has now become two separate regulatory authorities known as the FCA and the Prudential Regulatory Authority (PRA). The PRA and the FCA work together forming a ‘twin peaks’ regulatory structure in the UK.

The PRA is now part of the Bank of England and is responsible for the prudential regulation and supervision of banks, building societies and various other institutions presently totalling 1700 financial firms.1

The FCA is a quasi-governmental body which is responsible for the regulation of the financial services industry in the UK.2 The FCA is now responsible for conducting the regulation ...

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