A recent report from the UK’s Competition and Markets Authority (CMA) has revealed updated timing for regulations on trustee oversight of investment consultants and fiduciary managers, law firm Sackers has flagged.
According to the watchdog’s report, the UK’s Department for Work and Pensions (DWP) plans to make regulations “in late 2022”.
The DWP consulted on draft regulations to enact obligations on trustees relating to investment consultants and fiduciary managements in 2019, but about a year ago it said its response to the consultation and the final regulations were delayed and would probably be published in the first half of 2022.
The regulations had originally been proposed to come into force in April 2020.
The regulations planned by the DWP are intended to integrate into pensions law an order produced by the CMA following its investigation into the investment consultants market. The watchdog found competition problems in both the investment consultancy and fiduciary management markets.
Its order, which introduced requirements for schemes to carry out mandatory competitive tenders for new suppliers of fiduciary management services and set objectives for investment consultants, has been in effect since December 2019.
Following its investigation the CMA also recommended HM Treasury broaden the Financial Conduct Authority’s (FCA) regulatory scope to include the activities of investment consultants to ensure greater oversight of the sector in the future.
In the watchdog’s recent report, it said HMT planned to make changes that would allow the FCA to consult on rules for investment consultants and fiduciary managers in 2023, with the aim of bringing investment consultancy into the FCA’s regulatory regime in 2024.
The DWP’s 2019 consultation had referred to HMT consulting “later this year” on changes to the Regulated Activities Order in response to the CMA’s recommendation.