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FCA probes four top fund firms on possible competition breach

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FCA probes four top fund firms on possible competition breach

The Financial Conduct Authority (FCA) has alleged that four top asset managers, Artemis Investment Management, Hargreave Hale, Newton Investment Management and River & Mercantile Asset Management may have broken competition law.

The regulator has alleged that the fund firms shared information by disclosing the price they intended to pay in relation to one or more of two initial public offerings (IPO) and one placing shortly before share prices were set. 

The main allegations are that in 2014 Artemis and Newton shared information about the price they intended to pay for shares in relation to an IPO.

In 2015, the FCA has said that Newton, Hargreave Hale and River & Mercantile disclosed or accepted information about the price they intended to pay for shares in relation to another IPO and a placing. 

The regulator has said that these are provisional findings and may not necessarily lead to an infringement decision. 

The statement of objections that the FCA has issued against the firms gives them notice that the watchdog believes they have infringed competition law. This gives them the opportunity to respond by making either written or oral representations. 

It added: 'The FCA will carefully consider any representations from the firms before deciding whether the law has been broken. The statement of objections will not be made public, however any final decision taken will be published providing more detail about the case.'

In response, Artemis said: 'We note the FCA's provisional findings. We will continue to cooperate with the FCA as its investigation proceeds.'

A Newton spokesperson said: 'Newton is not in a position to comment on any actions with regard to the FCA’s ongoing investigation, except to note that Newton has been cooperating fully with the FCA and will continue to do so until this matter reaches its conclusion.

'The FCA’s investigation is focused on a very small number of Newton’s UK equity-focused strategies which can invest in small and mid-cap UK equities. Specifically, it relates to activity surrounding two initial public offerings and a placement in 2014 and 2015.

‘There has to date been no loss to any clients/investors as a result of the activity, and we do not anticipate any loss in the future.

‘We take compliance matters seriously and are committed to ensuring that our business is managed with the highest commitment to legal and ethical standards.’

Canaccord Genuity Wealth Management, which acquired Hargreave Hale this year stated that the company disclosed the matter during its due diligence process.

In a statement, it said: ' Hargreave Hale has fully cooperated with the FCA and will be making further representations to the FCA for its review and consideration, with respect to the two transactions in question. We note that the findings are provisional and may not necessarily lead to an infringement decision.'

In a statement to clients, River & Mercantile said: 'We will of course continue to cooperate fully with the FCA in their ongoing investigation and let you know as and when we have any more information which we are able to share with you.

'I would, however, like to reiterate that this matter does not affect any clients of River and Mercantile or the NAV of any fund or segregated mandate.'

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