Investment funds compliance – a new hot topic

Historically, compliance for fund managers was all about ensuring that investment limits had not been breached and that any promised benchmarks had been safely hit. Now, with the Standard Life fine and a series of other compliance disasters in this area, such as AIG, Arch Cru and the various structured product nightmares, those who provide funds for both retail and wholesale sectors have a new hot compliance problem to worry about. Does the fund do what it is supposed to do and contain what we say it contains? We asked regulator contributor and editorial board member (not to mention very small ex-investor in the Standard Life Pension Sterling Fund and someone responsible for bringing complaints about the AIG Premier Access Bond), Adam Samuel to look at this new compliance minefield.

Adam Samuel BA LLM FCI Arb Dip PFS Cert CII (MP & ER) MSI, barrister and compliance consultant can be contacted on +44 (0) 20 7 323 9171; email AdamSamuel@aol.com, website www.adamsamuel.co.uk His book, “Complaints and Compensation: a Guide to the Financial Services Market”, is available from www.cityandfinancial.com and www.adamsamuel.com.

The Standard Life Final Notice in January and the year of speculation, complaints and even a law suit seemed to herald the arrival of a new branch of compliance: fund checking to make sure that funds correspond accurately to their description by providers to both distributors and investors. Standard Life’s £2.4 million pound fine and injection of £100 million into the fund should have sent every fund manager to check the contents of its funds and to make sure that they tally with fund sheets sent out to IFAs and customers.