Boutique fund managers dodge a bullet
The Financial Markets Authority is consulting on the licensing regime for Managed Investment Schemes (MIS), introduced under the Financial Markets Conduct Act. The FMA has proposed that in order to be licensed, MIS providers will need to prove themselves in five key areas, including showing directors and key staff are fit and properand have the capability to manage the business.
Fund managers will also have to pass muster in terms of operational infrastructure, financial resources and governance.
And it’s the financial aspect of the licensing that is tipped to generate the most debate in the industry.
Unlike some overseas jurisdictions, the FMA is not proposing to require specific amounts of capital to be set aside by fund managers. However, fund managers will need to have positive net tangible assets and must be able to pay their debts as they become due in the normal course of business.
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