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FCA probes impact of asset manager failure

The Financial Conduct Authority has expressed concern that a ‘disorderly failure’ of an investment manager or portfolio could completely disrupt the financial system.

These concerns were raised in its annual Mission and Business Plan for 2017/2018, which includes sector views for the first time.

“Market stability could be affected by the failure or disorderly wind-down of a very large asset manager or several asset management firms as end-investors attempt to redeem their holdings on demand, creating a downward selling spiral,” the document states.