On 5 June 2024, the FCA published a speech by its Chief Executive, Nikhil Rathi, entitled International regulatory developments affecting investment management.

In his speech Mr Rathi begins by highlighting some of the key international initiatives that the FCA is involved with. This includes joint work with the Financial Stability Board on the design and use of stress tests for open ended funds and jointly chairing a working group with the European Central Bank on leverage in non-bank financial institutions.

Mr Rathi then covers ‘global innovators’ and touches on domestic initiatives, such as the Digital Securities Sandbox and the FCA’s project work on fund tokenisation and international work on asset and fund tokenisation like Project Guardian, in partnership with the Monetary Authority of Singapore, Japan’s FSA and the Swiss Regulator FINMA.

Mr Rathi also discusses artificial intelligence in which he sets out a series of questions. This includes that whilst the FCA is a technology neutral regulator, it still has an objective to ensure market integrity. With that in mind, how can the FCA guard that in a stampede to maximise profits, the use of the most advanced AI in trading does not lead to market manipulation?

Near the end of his speech Mr Rathi mentions the regulatory regime for the Long-Term Asset Fund (LTAF). So far, the FCA has authorised 4 LTAFs so far. LTAFs are schemes that give defined contribution (DC) pensions in particular access to less liquid investments, allowing them to diversify their portfolios and help clients reach their retirement goals. As well as supporting investment in infrastructure. The FCA has also broadened access to retail investors as well as self-selected DC pension savers and self-invested personal pensions. According to Mr Rathi feedback from firms confirms that demand is picking up.