Sir David Kinloch, the chairman of Isis Asset Management, has told the Financial Services Authority to stop interfering in its business practices and leave fund managers to run their companies commercially.
In a statement accompanying the group's six-month results, Sir David questioned the "balance, content and direction" of some of the recent consultation papers issued by the FSA. "I urge policymakers and regulators to focus on good regulation and investor protection and to avoid seeking to become involved in interfering with proven business practices and defining how the commercial environment should work," he said.
His biggest concern is the consultation paper 173, which proposes that investment firms comply with a European directive on capital requirements. This means investment firms would be subject to the same reserving requirements as insurers and banks.
Many fund managers will have to hold substantially higher capital to meet the regulation's requirements. Isis believes this will make the UK even less competitive to operate in and wants the FSA to grant waivers to fund managers.
His second major concern is the FSA's consultation on the unbundling of commission arrangements. Sir David believes the industry is already resolving commission issues without the need for regulation.Reuse content